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It seems to me like there are many, many separate & distinct real estate markets even within Long Island. I don't know how anyone can judge the state of LI's real estate market as a whole! It seems like prices in certain areas have dropped a lot while they haven't come down much in other areas. What have been your observations? What areas have been most/least affected?
Honestly, I think the people who were affected were the ones who either couldn't afford the home when they bought it and it finally caught up with them or the ones who refi-d or used their equity to the hilt and now it's coming back to bite them in the behind since home values are going back to what they were instead of the inflated "fantasy" prices that created all that "fantasy equity" they took out.
It's a combination of things. Houses in these areas had some of the highest percentage increases in value during the boom. For example, pre-2002 you could buy a home in Mastic for $75-$100K. By 2005 they were up to mid 300's. So, they are falling the hardest now that the market is correcting. Also, these are areas where many people squeezed into homes using low/no downpayment mortgages that they could not really afford. Therefor, they are getting hit really hard by foreclosures now. In more affluent areas, I remember sellers in 2005 still wanting to see good down payments, so those people are a little more cushioned against the market decline.
It's a combination of things. Houses in these areas had some of the highest percentage increases in value during the boom. For example, pre-2002 you could buy a home in Mastic for $75-$100K. By 2005 they were up to mid 300's. So, they are falling the hardest now that the market is correcting. Also, these are areas where many people squeezed into homes using low/no downpayment mortgages that they could not really afford. Therefor, they are getting hit really hard by foreclosures now. In more affluent areas, I remember sellers in 2005 still wanting to see good down payments, so those people are a little more cushioned against the market decline.
Thanks for the explanation...that makes sense! Also, how do you think the quality of the school systems play into falling house prices? From my observations, house prices in the better school districts haven't been affected much.
Thanks for the explanation...that makes sense! Also, how do you think the quality of the school systems play into falling house prices? From my observations, house prices in the better school districts haven't been affected much.
I think that school districts do play a role in the valuation of homes, but not as much as some people believe. In general, the schools on Long Island are good, and, except for those which have well publicized problems (such as Wyandanch, Roosevelt, Hempstead, etc) the impact is a factor, but not the predominant one.
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