Why home price gains are lagging here

Same dynamics apply to NJ. From Newsday:

Why Long Island home prices are rising slower than the U.S. average

U.S. home prices are up about 10 percent right now from the same time last year, multiple national reports have shown, yet local reports have indicated that Long Island’s appreciation is just half of that — or even less.

The closely watched Case-Shiller Home Price Index most recently reported a 9.3 percent nationwide increase, while a similar measure from market analytic firm CoreLogic, released May 14, found a 10.5 percent increase.

Meanwhile, a local report from Douglas Elliman, which excludes the East End, found median home prices down 2.6 percent annually and a report from the Multiple Listing Services of Long Island, which includes Queens, showed a 4.5 percent uptick. CoreLogic’s Nassau-Suffolk home price index measured a 3.2 percent increase in prices.

So no matter how you slice it, Long Island is underperforming relative to the rest of the country. And that’s especially surprising considering the historically low supply of homes on the local market. What’s to blame?

It’s mostly New York’s foreclosure process, industry experts explained. The state employs a judicial process that, on average, takes 1,089 days from the time a lender files a complaint to the time the property is officially foreclosed, according to a recent report from RealtyTrac. That’s tops in the United States, where the overall average is 414 days.

As a result, there’s a humongous inventory of distressed homes looming in the shadows awaiting clearance to be offered for sale. Nassau and Suffolk counties have more than 24 months supply worth of distressed homes that haven’t completed the foreclosure process and entered the sales market, according to the CoreLogic report.

Consider there’s only one other market among the nation’s 25 largest that even has more than 15 months worth of supply — the Edison-New Brunswick, N.J. region has a 16-month supply of distressed homes.

So while other localities have made significant progress clearing supplies of distressed homes — especially since the massive federal mortgage settlement in February 2012 — Long Island hasn’t. Nationally, between 20 and 30 percent of all homes sold in March 2013 were in some stage of distress in many of the largest markets compared to between 30 and 40 percent a year ago. The elevated, but decreasing share of distressed sales indicates that foreclosures are clearing through the market.

“That’s how you make a housing market recover,” Jonathan Miller, president of appraisal firm Miller Samuel, said in an interview. “You move the distressed properties from weak hands to strong hands. Until that happens you can’t truly recover.

This entry was posted in Economics, Foreclosures, Housing Recovery. Bookmark the permalink.

36 Responses to Why home price gains are lagging here

  1. Comrade Nom Deplume, Bostonian says:

    First?

  2. grim says:

    Hi Grim…if you have a moment, can you post up that list of things home inspectors should check on? Thanks in advance.

    Spend some time on the NACHI site, and look at the following:

    http://www.nachi.org/sop.htm
    http://www.ashi.org/inspectors/standards/standards.asp

  3. Anon E. Moose says:

    Καλημέρα, τον κόσμο! Ούζο;

  4. Fast Eddie says:

    “That’s how you make a housing market recover,” Jonathan Miller, president of appraisal firm Miller Samuel, said in an interview. “You move the distressed properties from weak hands to strong hands. Until that happens you can’t truly recover.

    Tick… tick… tick… tick…

  5. Prepare for the end of days.

  6. chicagofinance says:

    RE: this IRS nonsense…..when the NYT is willing to point the finger at DC, then look out…….

  7. chicagofinance says:

    By KYLE SMITH
    Buried in the 17th paragraph of one of those mewling New York Times pieces on the woes of Obama — can we start calling him Woe-bama yet? — appeared these two words: “going Bulworth.”

    Obama himself, the Times explained, has been “longingly” telling his inner circle that what he’d really like to do is what Sen. Jay Bulworth, played by Warren Beatty in his 1998 movie “Bulworth,” did: to go public as an unabashed, angry and admitted socialist.

    It’s as if Ronald Reagan had been caught saying he wanted to “Go Strangelove.”

    In confessing his dreams of “going Bulworth,” Obama confirmed that what he thinks and what he says out loud are two different things. He let slip the mask of a center-left moderate — a “pragmatist” who only cares about “what works.” The press and even right-of-center columnists like Ross Douthat and David Brooks have always insisted that this completely unconvincing masquerade is genuine.

    “Bulworth” is set during the campaign season of 1996, when progressives’ frustration with Bill Clinton was reaching a boil (just before the Lewinsky scandal turned them into his defenders again). The title character is a cautious, Clintonian Democratic senator who breaks down in despair at his own moderate campaign, in which he questions race preferences, welfare and bloated government.

    Recognizing that he is a sellout makes him despondent to the point of suicide (I trust this is not the part of Bulworth with which Obama identifies). So, he first takes out a life insurance policy, then hires a hit man to assassinate him.

    With nothing left to lose, Bulworth speaks his mind and becomes a sensation and unexpected contender for the presidency by giving far-left campaign speeches in rap form. In the movie’s centerpiece moment, Bulworth does a rap about health care and cries, “Socialism!” to a stunned crowd. (The lyrics run, “Yeah, yeah / You can call it single-payer or Canadian way / Only socialized medicine will ever save the day! Come on now, lemme hear that dirty word: Socialism!”)

    This is President Obama’s id, the little man he wishes he could let out to party.

    But at least Bulworth is more upfront about the catch-all term for his program. President Obama and many others (including the Merriam-Webster Collegiate Dictionary) seem to confuse socialism with communism — common ownership of the economy.

    But most people understand socialism as shorthand for a European-style economy that allows private property but is government-directed for the (alleged) common good.

    A country whose economy is more public than private is socialist — such as France, where 57% of GDP is government spending. Few would deny that Obama’s goal is to put a beret on the US economy. Saying so, though, would require Bulworthian frankness.

    Yet the flip side of Obama’s fantasy is what’s getting him into trouble: His administration may not be able to say what it fervently believes, but it can muzzle others who want to speak their minds.

    The Benghazi e-mails show that his administration sought to shut up the CIA and conceal the damaging truth that it always knew al Qaeda terrorists (not demonstrators) attacked us last Sept. 11 in Libya. The AP scandal shows his Justice Department clamping down on what reporters say. The IRS scandal reveals his tax minions trying to silence the Tea Party.

    This is an administration that wishes only one man ever got a chance to speak up, loud and proud, in unapologetically socialist terms — while everybody else gets a strip of duct tape slapped over their mouths.

  8. Jerzy Diogenes says:

    To 7 Chi Finance:

    You make a good argument. President Obama should say and then do what he says. This are reasons why:

    – There is a great section of the country that WILL NEVER ACCEPT HIM – because he’s black. Let’s say it out, loud and clear.

    – Those that voted and believe in him feel bretrayed – because he has acted as a neo-con in progessive clothes, which lead to a situation of if there are side effects to his policies then it’s the Progressive ideology faults, and if succeed then it’s because of neo-con ideology.

    – The big issues are a few, but all stem from action by Boomer Presidents thinking that they knew better. This issue are:
    > Media Concentration & Deregulation – we now have 4 – 6 conglomerates running the media vs 50+ regional companies in the early 80’s. The media has become very like in 70’s Mexico under the PRI. It’s no wonder that crackpot like Ayn Rand are now glorified through the PR/Media machine as her ideology serves this oligarchy corporate driven view. Ayn Rand was considered a crackpot in her time, because of her contemporaries had experience WW2 – caused by people that had many of her selfish, “we are special superman”, “screw the weak” – mindset
    > Massive financial deregulation. We all know that here. Suffice to say – let’s see Bernanke or Greenspan manipulate the financial markets like they presently do, if the banks had to pay the minimum 5.25% that they were required on saving account.
    > Massive limitation of freedoms, militarization and idolization of police/authority figures (cops/soldiers are NOT HEROES – they do a job which they get compensated for – if they do a HEROIC ACT – is another matter ). Along with systemic degradation at all levels against anyone that stands up for their rights. This is a big point as both the Stanford Jail Guard and the Milgram Deferrence to Authority studies show how easy it’s for those in power to as Lord Acton said – Power Corrupt and absolute power corrupts absolutely, and how difficult it’s for any one to slow down or stop the authoritarian snow ball effect.

    Finally, his Healthcare overhaul is corrupted to the tilt with a health insurance complex. Just look around you, and you’ll see that non-profit hospitals that were or are close to bankruptcy are being bought up by for-profit investment group because they smell the money. .

    He has nothing to lose. I say do it.

  9. grim says:

    Obama isn’t black… Isn’t the PC term for this mixed race or biracial?

  10. Anon E. Moose says:

    Scrapple,

    How bout Bale?

  11. joyce says:

    9
    Freedy,

    After the student loan bailout, of course!

  12. Fast Eddie says:

    So nice of the Knicks to get it to game 7. (sarcasm off)

    I’d rather be dead, laying in the middle of the 31st Street approach to the Lincoln Tunnel than alive in Indiana.

  13. Anon E. Moose says:

    Joyce [12];

    Same tune, different verse.

    Indeed, when the World Bank canceled $650 million of Uganda’s debt in 1999, the first item President Yoweri Museveni purchased was a new presidential jet!
    http://www.utexas.edu/conferences/africa/ads/943.html

  14. grim says:

    class of 2013 most in debt ever.

    But will they be the most educated ever?

    Look, we’ve been harping on kids to go to college, not just important, but mandatory.

    So now, the kids go, and we bitch they took loans to get there?

    So which is it, debt free dropouts or college educated with student loans?

    I’ll take my chances with the latter case.

  15. chicagofinance says:

    I hate this part so much, because there is a huge swath of people who reflexively reject any criticism of him purely on that basis. In fact, the left-leaners that react in this way I call racists, because in imposing a double standard of protection, they actually are undermining his standing on an objective basis.

    Jerzy Diogenes says:
    May 19, 2013 at 11:57 am
    There is a great section of the country that WILL NEVER ACCEPT HIM – because he’s black. Let’s say it out, loud and clear.

  16. chicagofinance says:

    Let me add that many are completely unconscious of it……which in a way is worse….it is imbedded racism…..

    chicagofinance says:
    May 19, 2013 at 2:17 pm
    I hate this part so much, because there is a huge swath of people who reflexively reject any criticism of him purely on that basis. In fact, the left-leaners that react in this way I call racists, because in imposing a double standard of protection, they actually are undermining his standing on an objective basis.

    Jerzy Diogenes says:
    May 19, 2013 at 11:57 am
    There is a great section of the country that WILL NEVER ACCEPT HIM – because he’s black. Let’s say it out, loud and clear.

  17. Jerzy Diogenes says:

    Boy – Chi, I thought you would like debate, and not become defensive.

    You remind me of the PBS show with Harvard Professor Gates about blacks in Cuba.
    In it, Gates talks about how there is under Castro’s regime, real institutionalised racism but discussion of it is forbidden because Castro’s revolution took care of racism, so acknowledging this racism tatamount to be anti-Castro and and anti-revolutionary.

    You are using the same logic to get your “because there is a black president, there is no racism argument”.

    Finally – Here is a good one regarding the IRS & the Angry Boomer Tea Baggers that want their 50’s childhood country back.

    How One Overworked IRS Worker Ignited The Tea-Party Targeting Scandal
    Philip Bump, The Atlantic Wire

    The IRS’ office of Exempt Organizations sounds like a terrible place to work. Piling on to the critical report from a Treasury Inspector General, at least four sweeping media assessments this weekend show a department that is overwhelmed, underfunded, and poorly managed.

    The New York Times, the Los Angeles Times, the Washington Post, and ProPublica all researched the evolution of the small group of Cincinnati-based employees that unethically (and perhaps illegally) isolated the tax-exempt applications of Tea Party groups for additional scrutiny. What they found doesn’t appear to be the image of big government run amuck, as charged by Senator Mike Lee earlier this week; instead, it’s an organization trying to do politically tricky work while it struggled to cut costs — and failing.

    The scandal unfolded in four parts.
    Part 1: Tax-exempt work is moved to Cincinnati to save money.

    The ProPublica story provides the best explanation for why the group was located in Cincinnati at all.

    The city had a history of being able to hire people at low federal grades, which in 1995 paid between $19,704 and $38,814 a year — almost the same as those federal grades paid in New York City or Chicago. (Adjusted for inflation, that’s between $30,064 and $59,222 now.) …

    So in 1995, the Exempt Organizations division started to centralize. Instead of field offices evaluating applications for nonprofits in each region, those applications would all be sent to one mailing address, a post-office box in Covington, Ky. Then a central office in Cincinnati would review all the applications.

    Nor did the IRS splurge on a fancy office for the team. The Post describes a fourth-floor office with an “open, L-shaped layout of small, plain cubicles. (Office norms discourage the decoration of cubicle walls.)” The Times also reports that the group was the least popular assignment in an unpleasant place.

    Inside the agency, the unit was considered particularly unglamorous. “Nobody wants to be a determination agent,” said Jack Reilly, a former lawyer in the Washington office that oversaw exempt organizations. “It’s a job that just about everybody would be anxious to get out of it.”

    Part 2: Tax-exempt applications increase, while resources to deal with applications keep shrinking.

    By 2010, when the group began flagging applications that included the words “Tea Party,” the group was only a tiny part of the massive IRS tasked with a big job. The Post:

    Nationwide, about 900 of the IRS’s nearly 100,000 employees deal with tax-exempt organizations. Cincinnati’s determinations unit handled about 61,000 applications last year. In recent years, office culture in Cincinnati has been defined by constant reorganization to offset a voluminous workload: Regulations in the Pension Protection Act of 2006 triggered a wave of reapplications, and between 2009 and 2012, the annual number of 501(c)(4) aspirants nearly doubled, to 3,357. Many had a political tinge that complicated the determinations process.

    The Times points out that the change in tax code that threatened the existence of hundred of thousands of groups, spurred “tens of thousands” to reapply. This is a key point: these employees handled every applicant for tax exempt status, and applicants for 501(c)(3) status, which results in the ability to accept tax-exempt donations, comprised a larger, more sensitive pool.

    At the same time that the office was being flooded, both a key training tool — a series of explanatory articles called Continuing Professional Education — and a spot-check of performance had already ended, in an effort to be more “efficient.” ProPublica:

    In 2003, the saturation reviews and post reviews ended, and the public list of criteria that would get an application referred to headquarters disappeared, Owens said. Instead, agents in Cincinnati could ask to have cases reviewed, if they wanted. But they didn’t very often. … By the end of 2004, the Continuing Professional Education articles stopped.

    The Treasury Inspector General’s reported detailed one consequence of the lack of training for staff. For a period of about a year, all processing of questionable applications stopped while the group waited for a determination of what levels of political advocacy were permitted for (c)(4) applicants. That’s the sort of training that the CPE articles were meant to provide.

    In the end, the easiest thing to do was approve them all. ProPublica notes that, of 24,196 501(c)(4) applications between 1998 and 2009, 77 were denied. Until someone decided to start paying closer attention.
    Part 3: An employee starts streamlining applications.

    The Times notes that the process began in 2010 with a single person.

    For months, the Tea Party cases sat on the desk of a lone specialist, who used “political sounding” criteria — words like “patriots,” “we the people” — as a way to search efficiently through the flood of applications for groups that might not qualify for exemptions, according to the I.R.S. inspector general. “Triage,” the agency’s acting chief described it.

    The Los Angeles Times agrees, blaming “one specialist.”

    The crux of the investigation by Congress and the administration will be why that employee started to flag those applications — and why, as the inspector general notes, it soon became an office-wide practice. Was it an attempt to streamline the workflow? Or was it politically motivated behavior meant to target Tea Party groups? So far, it appears to be the former; the Los Angeles Times points out that “[n]o evidence yet suggests that the IRS agents in Cincinnati had a political agenda.” The Times spoke with a former IRS supervisor, who said that “[t]he specialists, hunched over laptops on the office’s fourth floor, rarely discussed politics.”
    Part 4: Management in Washington is slow to catch and correct the mistake.

    It wan’t until July 2011 that Lois Lerner, the group’s Washington-based director, learned of the problem. As The Times and the inspector general’s report indicate, management revised the criteria triggering closer inspection of applications. But:

    … a midlevel official in Washington temporarily overseeing the Cincinnati office told a supervisor there that the guidance was “too lawyerly.” The guidelines were revised several times, as new specialists and lawyers joined the effort.

    By January 2012, employees in Cincinnati, apparently without consulting senior officials, chose new keywords, including “educating on the Constitution” and “social economic reform/movement.” That month, the specialists in Cincinnati and elsewhere began sending out increasingly exhaustive, sometimes intrusive questionnaires.

    By the time Lerner curtails the practice, it’s too late. The questionnaires are for many groups the first time they’ve heard about their applications in months. It triggers blowback from conservative organizations which ultimately and indirectly prompts the inspector general’s report. For months, upper-level managers obscure the problem — including in testimony before Congress — until Lerner spoke at a conference two weeks ago, shortly before the inspector general’s report was released.

  18. DL says:

    Love it when folks argue about U.S. politics. It’s like listening to a debate about which Kardashian is most repugnant.

    The class of 2013 may be the most educated and the most in debt, but it ain’t the most smart.

  19. Jerzy Diogenes 2 says:

    The Kardashian’s vanity might be repugnant but they are bootylicious.

    Back to politics for a moment in this soon to be forgotten thread.

    But who would have thought that W. Bush weakened the IRS?

  20. chicagofinance says:

    Jer-Z…..I appreciated your article…I either wrote a response that misrepresented my opinion, or you misunderstood what I wrote…..I think virtually everyone in the U.S. is racist about this President, and it disappoints me tremendously. First, because it is unfair, and second, because an objective review would conclude that he is a clown and I hate that this fact gets obscured.

  21. chicagofinance says:

    Jer-Z…..it comes down to which rag do you believe more…..the LA Times or the NYT, because, as I noted yesterday, the NYT’s suggests that the Cinn Office was following orders and is now getting thrown under the bus.

    The crux of the investigation by Congress and the administration will be why that employee started to flag those applications — and why, as the inspector general notes, it soon became an office-wide practice. Was it an attempt to streamline the workflow? Or was it politically motivated behavior meant to target Tea Party groups? So far, it appears to be the former; the Los Angeles Times points out that “[n]o evidence yet suggests that the IRS agents in Cincinnati had a political agenda.” The Times spoke with a former IRS supervisor, who said that “[t]he specialists, hunched over laptops on the office’s fourth floor, rarely discussed politics.”

  22. Anon E. Moose says:

    Jerz [8];

    That’s your lead argument — “RACISM!” Quote from whatever newspapers you want — you’ve just branded yourself as an apologist hack.

    The media trotted this out the to drag Obama over the finish line in ’12 despite the objective measurements that would have tanked any candidate.

    Boy – Chi, I thought you would like debate, and not become defensive.

    The response was far more thoughtful than you or your dear leader deserves, but by all means continue to lead with your worst arguments.

    Was it an attempt to streamline the workflow? Or was it politically motivated behavior meant to target Tea Party groups?

    Why do you assume it can’t be both? Leftist political apparatchiks can be lazy, too.

    Finally, [21]:

    an objective review would conclude that he is a clown and I hate that this fact gets obscured.

    Amen.

  23. Anon E. Moose says:

    Getting back to real estate — thin gruel of retribution for one appraisal firm:

    The state Department of State upheld a December decision to revoke the licenses of the co-founders of Mitchell, Maxwell & Jackson, a Midtown-based appraisal firm that was one of the biggest in New York City during the real estate boom…

    “Considering the extent of the fraud in this case and appellants’ direct involvement in the commission of fraudulent acts, the penalty of revocation cannot be said to shock one’s sense of fairness,” Shapiro wrote in his decision.

    http://therealdeal.com/blog/2013/05/13/state-upholds-revocation-of-mmj-founders-licenses/

  24. Comrade Nom Deplume, Bostonian says:

    [22] chifi,

    Wht I want to know is how the LAT and NYT were able to divine information tht TIGTA hasn’t learned and that no employee at IRS is authorized to disclose to the media.

    It is truly miraculous.

  25. Comrade Nom Deplume, Bostonian says:

    [21]. Chifi,

    I give him more credit than that. I think he is in over his head and hubris is preventing him from realizing that and utilizing the resources available to him. Not exactly unprecedented as Carter was, in many respects, similar.

  26. Comrade Nom Deplume, Bostonian says:

    And I gotta say, there is an impossible task–being Diogenes in Jersey.

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