January 24, 2013
Tight credit slows housing recovery
by Joseph Orovic
The borough’s real estate market continued its stuttering approach to a recovery in the fourth quarter of 2012, as tight credit continued to fuel rising prices and shrinking inventory, according to a quarterly report by Prudential Douglas Elliman. But the post-Sandy reality of South Queens is another matter.
The average sales price rose 9.4 percent from the same quarter a year before, to $432,503. (Figures are measured against year-on quarters due to the real estate market’s seasonal nature). The median sales price also rose 13.7 percent to $390,000. But the number of sales fell 4.4 percent, continuing the market’s low turnover rate.
“Sellers can’t be buyers,” said Miller Samuel’s Jonathan Miller, who wrote the report. “They can’t trade up or qualify for a mortgage. They don’t have the option, so they just sit.”
Tight credit combined with low equity is a national problem, Miller said, one that is not being helped by low mortgage rates.
But the problems of the borough’s broader market are small fries in comparison to the situation in South Queens, where Hurricane Sandy’s aftermath is still on display. While prices increased slightly in the area, the number of sales in the area dropped 18.6 percent from the same quarter in 2011. The problem is more pronounced in Rockaway, where sales plummeted 60.8 percent.
The holiday and winter months are already rather slow for the market, according to Howard Beach real estate agent Jerry Fink. Hurricane Sandy has only made it worse.
“It’s like they put ether on the place,” he said, adding the superstorm halted what appeared to be a slight turnaround in the market. “I actually saw a price war. I felt the market was really starting to turn our way.”
Now, the market in South Queens faces uncertainty as homeowners recover and repair, then decide what to do with their houses. What used to be 90-100 listings for Fink has dropped to 62.
But Fink is not putting all the blame on Sandy’s sizeable shoulders.
“It’s really hard to make that judgement. This is the slowest time of the year. Are you going to blame this on the storm or the time of year?”
Miller suggests the true effects of the storm won’t be felt or measurable for some time, despite the drop in sales numbers.
“It’s hard to describe it as cause and effect,” he said. “I don’t attribute all of this to Sandy. Sales overall dropped in many places.”
Indeed, the figures across the borough are a mixed bag. While sales increased in the central part of Queens by 13.4 percent, they remained in relative stasis in the west and northeast, while dropping in the northwest area. Ditto prices.
Miller calls it a “pre-covery,” a cleansing period following the late-2008 collapse, after the mortgage bubble burst and banks put a noose around lending funds despite low rates.
“There’s still a big legacy issue about decisions that were made and we’re still grappling with the leftover issues such as foreclosures,” he said.
The borough saw a 163.9 percent increase in foreclosures in 2012 from the year before, according to RealtyTrac, totaling 4,853. Miller attributed the figure to the state’s tediously slow foreclosure process, which churns at one of the slowest rates in the country.
“It’s not that they’re re-emerging, they’re hibernating,” he said.
Fink, however, faces a wholly different task. As the doldrums of winter pass, he’s not sure what to expect come the usually busy spring season. But he has a test.
Two homes have been listed post-Sandy. One, on 99th Street, was heavily damaged during the storm. The other had minimal damage and was redone. The outcome of both houses may predict how spring goes. But Fink is optimistic regardless.
“Nobody seems like they want to run,” he said. “And they seem to have a good attitude about it. That gives me a good attitude about it.”
Original Article // qchron.com
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