Below is an excerpt for a post I did awhile ago called “What Cause’s Real Estate to Appreciate” Click on the title to see full post.

Interest Rates:
A one percent change in the mortgage financing rate can change the value of real estate by as much as 10%

A $300,000 mortgage financed at 5% for 30 years costs 1610.46 (Principle and interest)

So a monthly mortgage payment of 1610.46 at 6% for 30 years gives you a mortgage of $268,611.22 or 10% less.

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“For many reasons, the rebound will be disproportionately small compared to the decline,” Moody’s said this week in its
latest outlook on the residential market. “It will take more than a decade to completely recover from the 40% peak-to trough decline in national home prices.”

The housing market is in the third year of the current downturn, one of the worst corrections in U.S. history as a result of the economic recession and the mortgage industry nearly grinding to a halt during the credit crunch.

Moody’s predicted home prices “will remain at a persistently lower level than we anticipated prior to the crisis, and it
will take a full decade from the 2010 bottom just for the [Case-Shiller] national index to climb back to its 2006 peak.”

Full story can be found here: http://www.marketwatch.com/story/home-prices-wont-regain-peak-this-decade-moodys-2009-09-18

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Harvard University puts together a great publication each year called “The State Of The Nation’s Housing 2009”. I created this chart from the 2009 publication showing the highs, lows and recovery period between them during past cycles. As you can see it takes 9 to 10 years for a property to be worth the same as it was from the previous peak. The current cycle had a much longer appreciation cycle then it had in past cycles so it is only common sense that it will take longer to recover. If any homeowners are thinking that they will just wait until the market prices increase they may have to wait quite a bitter longer. The interesting thing is, even if they do wait till the prices appreciate technically the property is not worth more, the value increased because the dollar is worth less! If you need to sell, sell now and take advantage of the low interest rates.

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The total un-sold home inventory has hit 18 month lows in Suffolk and Queens counties, Nassau county had a small increase but has basically been flat lining for the past 4 months. All three counties are showing signs that the Long Island real estate market is improving, I hope to see the trend continue.

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Suffolk County has not only seen less homes coming on the market over the past 4 months but June also showed an increase in the amount of homes going into contract. In a year over year  comparison the total amount of homes going to contract is less then the same time last year but not enough to be of any concern. Overall all the charts are showing the market is recovering.

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Seems that there is little change in the amount of short sales in all three counties

Bank Inventory continues to decline; however, there is much talk of many more foreclosures to hit the market in the next 6 to 9 months.

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MI’S June 2009 analysis of economic, housing, and mortgage market conditions.

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Click Here: 1st Quarter 2009

PMI’s quarterly Economic and Real Estate Trends (ERET) report includes commentary on the national economy and regional housing price trends. A popular feature of every issue is the U.S. Market Risk Index, a tabular presentation of 381 of the most populated Metropolitan Statistical Areas (MSAs). The index is based on a statistical model utilizing economic data, real estate variables and market expertise. The model provides several measures to gauge relative residential lending risk.

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PMI’S May 2009 analysis of economic, housing, and mortgage market conditions

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Saw this great visual that Newsday creates, it is a great overview of the econonomic health of Long Island.

Here is the link to the PDF

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