Market Statistics • November 27, 2012

Strong October for Westchester Real Estate Market Continues Improved 2012

by J. Philip Faranda

The Hudson Gateway MLS statistics for single family home closings for the month of October indicate that the market is markedly better this year than last year, and is the most robust it has been since 2007. Both median price and the volume of closed transactions are up considerably and the number of pending sales is also up as well.

For the month of October, 2012, 348 homes closed at a median price of $561,500.
For the same month in 2011, 268 homes closed at a median price of $515,000.

That is a 10% increase in median price and a whopping 23% increase in transactions. It puts the yearly total well ahead of last years pace as well:

For the first 10 months of 2011, 3312 homes closed at a median price of $620,000.
For the first 10 months of 2012, 3777 homes closed at a median price of $600,000.

Transactions closed for the year overall are 14% ahead of 2011 and the median price is steady, albeit down slightly.

Another good sign is the number of transactions under contract and pending sale. There are 926 homes under contract at a median price of $521,950. Last year at this time there were only 674 homes under contract at a median price of $499,000. That is a 37% increase in homes under contract, and it is perhaps the best indicator of where we are headed than any other metric I know.

Median price is not the perfect barometer for true home values, but it does speak to the trend of price category that buyers are acting on. For example, the $521,950 median price of homes under contract does not mean that values have plummeted from the $600,000 median of the year to date; it does mean that more buyers are buying lower cost homes this time of year.

Perhaps the most significant takeaway from the results is that we are past the low point and entering a period of some stability and-brace yourself-some certainty. I do not expect prices to rise; I foresee flat values for the time being, but the number of sales is growing at a healthy pace. It is hard to argue with the talk of recovery in housing at long last. We were due for some
good news, so we should enjoy it while it lasts.

Recovery might be premature. My label: PREcovery. Write it down.

Ready to dig in? If so, here are some homes still for sale.

[idx-listings community=”Area 3″ minprice=”595000″ maxprice=”620000″ propertytypes=”2467″ orderby=”DateAdded” orderdir=”DESC” count=”20″]

Commentary • Selling • November 23, 2012

On Open House Thefts: What Can a Real Estate Agent Do?

by J. Philip Faranda

Last week I read in Agent Genius about a homeowner that was suing their real estate broker after the theft of $162,000 worth of jewelry from their home during an open house. The homeowners claim that they are entitled to damages because the crime basically occurred on the agent’s watch, and that the agent was negligent in not preventing the property from being stolen. This hits close to home for me, because a few years ago I hosted an open house where a theft occurred.

No one should ever have to endure this sort of loss, especially jewelry, which can have meaning that transcends appraised value. That said, I have a question for those debating what role the agent could or should have played in foiling the crime:

What should the agent do once they catch the crime in progress?

We are there to sell the home, so being in “prevent crime” mode strikes me as being rather antithetical to making a deal happen. You can’t exactly sell someone while at the same time being suspicious. Have you ever walked into a retail store and been “watched” by a suspicious shop keeper? It doesn’t exactly make you want to stay very long and buy something. That, coupled with the fact that the odds of a theft occurring in a properly prepared house being remote, mean that all we can do is catch thieves in the act.

Then what?

Tackle them?
Citizen’s arrest?
Subdue them somehow?
Chase them off?

In my own situation, it was two people who stole from a number of open houses in the area, and they were traced to another state. My client’s belongings were never recovered, and I don’t think the two were ever prosecuted. They signed in with fake names and numbers, and worked fast. One asked me some questions while the other cleaned out jewelry in under 2 minutes that was not under lock and key. I don’t know what would have happened if I somehow caught them in the act of committing the crime, and frankly I don’t want to know. People who stumble onto active crime scenes seldom tell happy tales.

Having already been attacked once in a house years ago as a new agent, I have to say as a husband and father of 4 children whom I REALLY want to see grow up, it is not my responsibility to take one in the gut for someone’s unsecured jewelry. It just isn’t. We take enough risk being alone with strangers in our efforts to sell your home.

I am no lawyer and have no interest in discussing the legal nuances or theory. I just value the pragmatic and my well-being. I find it ironic that if the agent slipped down the seller’s stairs that the seller would be liable, yet the agent is somehow supposed to possibly risk their life with a criminal for …things.

If you are selling your home, lock up your jewelry. Install a nanny cam if you want. But don’t add “crime prevention” to your agent’s job. We can’t prevent crime, we certainly cannot stop it, and we shouldn’t be responsible for valuables that should have been locked away. Lock away your valuables. Everything-and everyone- is safer that way.

Commentary • November 20, 2012

What I Learned From a Week Without Power

by J. Philip Faranda

Note: It has been a solid month since I last wrote a blog entry. We endured 8 days with no power after hurricane Sandy, then another week with no phone or Internet. The disconnection and subsequent mad rush to catch up on lost work forced me to put many of my writing efforts on hold. I hope that this will be the start of more frequent offerings.

If you are one of the lucky ones who quickly regained or never lost their power during Hurricane Sandy, good for you. We endured 8 consecutive days with no electricity, easily making it the longest blackout of my lifetime. As tempting as it was to complain, the knowledge of more catastrophic loss in nearby communities, not just of property but of lives, made me bite my tongue. Our family made the best of it, and as much as it was a teachable week for our 4 children, I have gotten some new insights as well.

For one thing, I now know more about candles than I ever knew as a boy scout. Take it from me, the long skinny ones give the best light. The fat candles may last longer, but once the flame sinks into the middle, forget it.

Gas fueled utilities are flat out superior. Crazy as it sounds, we never lost use of the kitchen stove or even hot water because our stove and hot water heater did not have electric pilot lights. I found out the hot water thing quite by accident; most people never run their water long enough to know it, or mistakenly assume that hot water is just some fortunate leftover that will run out and must be rationed. Not true. A gas fired mechanical hot water heater will allow you to have hot showers a week into a blackout. Drying off is chillier, but few things are as miserable as a cold shower.

That said, the simpler life dumbed me down terribly. Focusing so much energy on compensating for lack of creature comforts and enduring more knocked me down a notch or two on Maslowe’s Hierarchy. I found myself less on the ball, less decisive, and almost behind in regular conversation. It is just tough to be on my mental A-game when so many distractions, incoveniences, and unfamiliar efforts weigh me down.

I am not too dull to notice how adversity seems to bring out extremes in behavior. I observed both the best and worst in people when I saw neighbors helping each other and strangers get into shouting matches on gas station lines. Society is a fragile ecosystem. Take away a few components and some of us are primitive and barbaric. And a few of us ought not patronize self serve gas stations either (it isn’t rocket science!!).

Perhaps most of all, I’ll never take some basics for granted. Running water is a blessing. A hot cup of anything means more when you boil it in a kettle. A recharged mobile phone and a half tank of gas can make you feel invincible. And if you want to talk style, the new suburban status symbol isn’t a sports car in the garage- it is a generator.

Selling • October 23, 2012

Why Price Points Matter

by J. Philip Faranda

It is no secret that anyone selling their home in Westchester County, or Iowa for that matter, wants to get as much money as they possibly can for their property. There are a variety of things a seller can do to maximize their price, such as staging the home, having the broker do a good video, professional photography, keeping the place tidy, and making sure all showing requests are accommodated. Pricing strategy is among the components of a strong plan, and part of that strategy is understanding price points as they relate to consumers.

The most frequent myth in my experience is the belief that, all things being equal, asking for more money will attract a higher offer. That is seldom the case. The current market, while no longer in a crash, is still incredibly price sensitive, and the typical buyer proceeds with great caution.They often do not even look at a property that is over their price point.

If a property is priced higher than comparable properties, the buyers will not make a higher offer. They will, as a matter of fact, engage in a war of attrition with the seller, watching on the Internet and waiting for the price to come down before they even take a look. Over priced homes tend to remain on the market longer, become “stale,” and, once the seller become hip to the need for a reduction, often “chase the market” where a reduction still has the property behind the value curve of the competing homes.

Here is a typical scenario:

A home owner, seeing comparable sales to their own property of $475,000, $465,000 and $480,000, is advised that the best price for their home would be $499,900. Instead, they elect to price the home at $509,000 to “building more negotiation room.” However, instead of selling in the first 60 days, they have a dearth of showings and experience frustration.

When they finally do lower their price to $499,000, they have missed their mark and get a low offer of $450,000, which does not result in a contract. Eventually, the house does sell, but after several more months on the market than expected and for $20,000 lower than originally thought.

How does this happen?

One of the big reasons is missing the mark on price point. A home priced at $509,000 may not even be seen by buyers who are looking no higher than $500,000. Part of the reason is the drop down menus on real estate sites where price increments are typically $25,000; the other part is psychological. Even if a consumer can type in their own numbers, they still use round numbers like $x00,000, $x25,000 and $x50,000. That is strike 1. Then in any market, there is a finite number of buyers for that locale. If the competing homes sell to that finite number of buyers, then the only way to compensate and attract a newer buyer to the area is via a price reduction. That is strike 2. Starting at $499,000 in the above scenario would get more eyeballs on the house, more showings, and more opportunities to attract an offer.

Starting out with 2 strikes is inadvisable. It is not an exact science because no one can predict the future or what will happen in the economy, but understanding how best to price the home can avoid these headaches and get the seller packing sooner, and for more money.

Commentary • October 16, 2012

On Closing Indian Point: What Options for Energy are There?

by J. Philip Faranda

All things being equal, I think most people would prefer to not have nuclear fission occur in their own back yard. I have often stated that if Indian Point were to cease operations, the property values in Verplanck would skyrocket. The debate about the renewal of Indian Point’s license rages while I believe that most people are unsure of what options they really have.

Most people, I would assert, are neither for nor against Indian Point operating, but they are all for having energy. So, as a person who would prefer to not have a nuclear reactor a few miles north of me, I have to ask: If Indian Point were closed, where would we get the energy to replace that which the facility produces?

I have asked this question before to folks who are vocally against the plant. The typical answer was a meandering double talk about “the grid,” the need for conservation, and graphic descriptions of radiation poisoning. That does not answer the question. I know how gruesome auto accidents can be, but I drive my car daily. It is the risk of existing in society. The same goes for energy. What are the alternatives?

Indian Point supplies about one third of the electricity to Westchester and New York City. Millions of people turn on their lights, cook their food, and watch the Yankees choke on their TVs thanks to the energy the power plant gives them. You can’t just conserve and not miss the energy the facility produces. You have to get another source of energy somewhere, somehow, at a commensurate cost. How?

Convert the plant to coal and bring a little Columbia County, PA to Westchester?
Put a wind farm on the Hudson or Long Island Sound?
Giant Habitrails with jaguars instead of hamsters?

What I’d like to hear from the advocates of closing the plant are pragmatic alternatives. I am sure they exist, but I simply don’t hear them above the vitriol.

Years ago, I lived in Rochester, NY, which, if you don’t know, is located right on the Erie Canal. Some towns outside of Rochester have their own municipal utility companies, such as Fairport, NY, which has harnessed the clean power of water and given residents electricity at absurdly low prices- I am talking about heating (yes, heating) and powering a 3000 square foot home for less than $150 a month.

Could we do that here? We don’t have an Erie canal but Croton has a river and a pretty powerful gorge, and Ossining is loaded with brooks and has an aqueduct. Westchester has the Saw Mill River. We have the Bronx River. We have the Hutchinson River. Could we solve our energy problems and flooding problems down county in one move with a bold reinvestment in infrastructure? Would it be folly to explore the power of water here? Would the folly be greater than that of exploding atoms? Why can’t Ossining and Croton, for example, determine their own fate and do what Fairport did?

Here is what I think we can all agree on but seldom discuss: Let’s put a little less energy on decrying whether the problem is a problem or not, and put a little more thought and energy on viable, sustainable alternatives. The vast majority of people, so long as they get light, recharge their iPhones, and can scream at Nick Swisher on TV, would be just fine with a new solution.

Community News • October 11, 2012

On the Proposed Reinvention of Playland

by J. Philip Faranda

Rye Playland has been a Westchester institution since 1927. We take our children there every year, and few places have a softer place in my heart. Unfortunately, 85-year old amusement parks (even when great pains have been taken to keep current, as they do in Rye) don’t attract the crowds they once did, and the model the park operated on has been losing money for quite some time to the tune of over $3 million annually. Since the park is county owned (the only one in the USA of its kind), that poses a unique problem.

Yesterday, County Executive Rob Astorino stated that an announcement would be made on the fate of the Park, and hearing that made me bite my lip just a bit, mostly out of fear that the venerable old place would go the route of Bronx Freedomland, Coney Island or the old Palisades, which ended up being lost in whole or in part to developers.

That would stink. My kids would lose it, and another piece of my childhood would go out to the ash heap.

To my relief, Astorino has announced a very forward looking initiative to “reinvent Playland” with the signing of a $34 million letter of intent with the nonprofit Sustainable Playland, Inc to substantially improve the facility and take the model out of it being solely a county-run money suck.

Among the proposed improvements (from the media release):

New water park
Outdoor ball fields
Renovated ice rink and new outdoor rink
New Restaurants
New entertainment facilities, including a great lawn overlooking the adjacent Long Island Sound
New Management and fee models

More details can be found in the link above.

The easy thing to do would have been to sell to the highest bidder and let people schlep out to New Jersey or Pennsylvania if they wanted to go to an amusement park. The gutsy thing to do, in my mind, is what Mr Astorino is proposing: keep the park, invest in the future, create some jobs, and look forward with some ambition.

This is not a slam dunk; there is red tape, politics, certainly opposition from rivals, and 100 other obstacles. Without a viable option that keeps the park for future generations ( and my own children!), I don’t see why anyone would oppose, but they will. As for me, I support the initiative and hope they can get started soon so we can ensure that Playland is around for another 85 years.

And of course, I’ll just lose my youth the good old fashioned way, with crows feet and achy bones.

Market • October 9, 2012

September 2012 Westchester Real Estate Market Report

by J. Philip Faranda

The results are in for the month of September for single family home sales in the county and they are mixed. According to the Hudson Gateway MLS data, September 2012 was slightly weaker than the same time period in 2011, but overall 2012 is still well ahead of last year’s pace. Median price is down slightly, but we are almost 400 transactions ahead of the first three quarters of 2011.

For the month of September, 2012, Westchester had 363 closed sales at a median sale price of $545,000.
For the month of September, 2011, Westchester had 383 closed sales at a median sale price of $600,000.

Volume was down slightly, and median price was way down, but the transaction total for the year to date, 3428, remains far ahead of the 3044 that closed last year in the first three quarters. Median price for the year is down slightly, from $630,000 to $600,000, but that just means that the lower priced sector is moving at a more rapid rate.

There are currently 917 homes under contract or pending sale at this time, so the number of closings is not showing any signs of weakening. The last quarter does look to be strong in transaction totals. That said, the median asking price of the pending deals, just $524,000, means that less expensive starter homes are the bulk of the volume. What that means looking forward is that the median price for the first quarter of 2013 may shoot up as sellers of starters move up to more pricey digs. We’ll see if I am right and that happens.

I do not believe that values truly are down because of anecdotal experience in my own practice- buyers are far more eager to make deals in this environment than in years past. When buyers are more flexible, there is less downward pressure on prices. The more demanding buyers of 2009-10 created steep price drops. That is not happening now. There are just more starter homes selling than higher end properties.

I believe that overall, we are in the infancy of a modest recovery. That does not mean that happy days are back again, but it does mean that the decline is most likely behind us.

Industry News • September 29, 2012

On Preparing for NYSAR Fall Meetings

by J. Philip Faranda

The New York State Association of Realtors will hold their annual fall conference from Sunday, September 30 to Wednesday, October 3. I am a state director on the MLS and technology committees, so I will be in attendance. Association meetings cover a broad range of matters, and consumers should know that their interests are first and foremost. Crucial issues like equal housing, ethics, legislative matters like the mortgage interest deduction, and dozens of other subjects are addressed in depth in our sessions.

There was a time when I viewed participation at the association the way I viewed the high school yearbook committee- the cool kids patting each other on the back, perhaps subtly angling their own agendas, and mostly meaning well but not contributing meaningfully to the public or rank and file. I could not have been more wrong. I have recently been nominated for my 4th term as MLS Vice President. It has been eye-opening. The volunteers who fill these positions do incredibly important work to determine policies that set the tone for a better industry for both our trade organization and, more importantly, the public.

The biggest challenge is the fact that we don’t have a crystal ball to understand the ramifications of policy- for example, the recent controversies on listing syndication all came about because, years ago, NAR membership decided that our value as broker was greater than that of gatekeeper of data, and enormous transparency was promoted so consumers could view listings easily and ubiquitously. It was overall better for consumers, but there are growing pains like data accuracy and ownership of content. Zillow, perhaps the biggest and best known listing syndicator out there took notice of my thoughts on the issue and chose me to be on their Agent Advisory Board, and we had our first meeting in Seattle last week. I will write about that in the near future. Suffice to say, there is partnership and mutual interest in the industry across the lines, and in my view that is sourced by policy we create at these meetings.

Technology is tricky, however. Who knows how the growing information highway will best serve us? I think of Future Shock– change these days is so rapid most people can’t keep up. Think of parent with a 13 year old on Facebook. My parents were worried about me on the phone and 6 TV channels in the 70’s. Today, I have 1000 TV channels, the whole Internet, cell texting in the not too distant future, and who knows what else. The metaphor is the same for real estate in an industry where the flow of information is overwhelming and no online algorithm or vector can accurately warn the consumer of rugs that smell like cat pee and a thousand other issues.

Anytime hundreds and thousands of people gather together and collectively seek answers to the question of how to do our job better you can expect good things. It isn’t easy, I am not a fan of being 4 hours from home and business, but it is needed.

Commentary • Community News • September 23, 2012

Let’s Just Close Sing Sing Prison Already

by J. Philip Faranda

The Powers That Be must have had a different attitude about prime waterfront land in centuries past, at least in Westchester County. Just in our northern River Towns alone, we have had a nuclear power plant, a landfill, a maximum security prison, and an automobile factory on the banks of the Hudson. Those aren’t very prescient examples of land use or planning.

To Croton’s credit, the landfill is history, as is the GM plant in Tarrytown. I won’t touch Indian Point right now.

But what I will say is that I am not going to take “no” for an answer when it comes to making Sing Sing go away. A year or two ago, the local news published a few stories on the possible closure of the Big House, but the politicians killed the idea for a variety of specious reasons, such as the hardship of the inmates’ families for visitation. The local jobs idea hasn’t been compelling for decades- most of the correction officers live upstate, and another facility would actually be an easier commute for them.

The charm of the whole “up the river” thing dried up for me years ago. Someone from California might think it is cute after renting Breakfast at Tiffany’s, but locally, pragmatism trumps history. The prison is an eyesore. It repels people from wanting to live in our community. It does not help property values in the neighborhood, unless you know someone who wants to live next to a 20 foot wall with convicted murderers and sex offenders on the other side. It certainly doesn’t help the tax base, as the property does not generate the same tax revenue as private development would. It doesn’t enhance Ossining’s stature among Westchester municipalities. There is no upside.

The historical angle is a non-starter for me as well. If someone wants to make part of the older cell blocks a museum and put up plaques about how everyone’s dinner light would flicker during an execution they can do so. But the 130 acres the facility currently occupies could be put to far better use than housing 1700 felons in the heart of a vibrant village.

Build condos.
Build a mall and movie theater.
Build a new school for Ossining’s bulging, over capacity student body.
Build all of the above.

We’d put more people to work, raise tax revenue, and ease the tax burden on other properties if we get rid of the place. Oh, and we’ll also rid ourselves of one maximum security prison. That’s not bad either.

Community News • September 20, 2012

Honoring George Groves

by J. Philip Faranda

I wrote last year on the sad passing of fellow broker George Groves, who was a well respected figure for decades in Westchester real estate. Yesterday, George was honored with the dedication of park benches in his memory at the Eastchester Public Library. Several dozen people attended, including a number of public officials and industry colleagues, both in brokerage and from the Hudson Gateway Association. I was humbled to be among those who said a few words.

George’s legacy will that of an absolutely honorable man. Every one of the people there was there because he was a man of integrity. I had a conversation with one of his long time agents, and we agreed that it is easier to do the right thing, especially in light of some of the garbage we witness sometimes, knowing that there are guys like George out there to emulate.

People sometimes assume that licensees at competing companies have disdain for each other, or that we are adversaries outside the lines of a transaction. Nothing could be further from the truth. We are colleagues, we have respect for each other in most cases, and people like George were emblematic of that ethic. Almost a year later, it still feels like a loss, and I say that as a guy who really was not particularly close to George on any personal level. No matter the connection, and in my case it was a favor he did me years ago, you just knew that you were dealing with a good man.

The takeaway is to pick up the mantle and be the best person you can be.

Concluding the ceremony, George’s grandchildren released a number of balloons into the sky. I was honored just to be there.

Strong October for Westchester Real Estate Market Continues Improved 2012

On Open House Thefts: What Can a Real Estate Agent Do?

What I Learned From a Week Without Power

Why Price Points Matter

On Closing Indian Point: What Options for Energy are There?

On the Proposed Reinvention of Playland

September 2012 Westchester Real Estate Market Report

On Preparing for NYSAR Fall Meetings

Let’s Just Close Sing Sing Prison Already

Honoring George Groves

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