August 22, 2007
Desiderio's Take On The East End's Market Impact
Your turn next! This week Realty Takes belongs to Judi Desiderio, President of Town & Country Real Estate, who both asked the questions and then gave her take on the current market impact on the East End.
Q. Are we about to see the true end of an insulated East End real estate market?
A. It won't be the first time we see 'players' we believed were insulated from market swings.
Q. Did buyers get mortgages they shouldn't have?
A. Absolutely! People were sold mortgages they shouldn't have bought when they could have taken a fixed rate for a bit more.
Q. What about those home equity lines of credit – to those who were banking on the real estate market's continuing ascent?
A. Any time buyers 'speculate' on anything, but especially real estate, with short term, big gains in mind they risk getting caught with their hand in the cookie jar.
Q. Other than trying to prop up lending with some money, what else will the government do?
A. Lower interest rates, work with owner-occupied homes at the brink of foreclosure, restructure loans, continue to prop up the economy.
Q. How do the international market conditions effect us?
A. A psychological aspect of this downturn being global, capital from other countries shuts off like a valve.
Q. How will this impact the CPF (Community Preservation Fund) of the East End towns who borrowed against future funds 'expected'?
A. This is a hot potato. To begin with, when real estate values have multiplied a number of times, why didn't the entry level of exemption? They are choosing to hurt their own infrastructure. It is hard enough for young people to buy their first home here or older people to remain here, but this makes it even harder. Every first time homebuyer, senior citizen should be exempt. How fair is it to tax only new buyers when all residents enjoy the open space? The towns should never have borrowed against money not received. Our market is like any other luxury item. It's one of the first things to go when times get hard.
Q. Will it hit only the low end with buyers who stretched to buy?
A. Nope! The hedge fund buying population and those directly connected to the street historically pull back fast and furiously. Again not a must have. The truly rich – those buying $35 to $50 million third homes – are not affected, those buyers are less than one percent of our market. The 'high end,' $4 to $9 million, might opt to rent for a couple hundred thousand or buy at $2 to $3 million and trade up when the economic climate recovers.
Q. Will the $5 million, $10 million or higher priced homes suffer because their buyers are too tightly connected to the street?
A. Yes. See above.
(Hey c'mon corporates out there, you've got to respond to this!)
Q. How will the owner operators of boutiques such as Town & Country fair?
A. I'm the only one in town doing the happy dance down main street! Ebb and flow. It's as natural as inhale and exhale!
Hmmm? Waiting to hear from you.
(Wait a minute! This just in, from the mortgage first responders, found on CNN.Money, saying it's a time to buy! "It's an absolute positive," said Loni Graiver, president of the Maine-based Cumberland County Mortgage. "The one catch is: You've got to be a buyer with good credit, a low debt-to-income ratio, a healthy down payment, verifiable income, and looking to finance less than $417,000.")
Yeah right! OK back to Judi.
East End real estate. A really strange business!
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