During a wide ranging interview with WNBC news anchor Chuck Scarborough, Charles Wimer, chairman of the New York State Title Economic and Research Committee, stated that the New York real estate market has bottomed out and bargain hunters will start looking for deals in both residential and commercial sectors. While noting that real estate prices remain substantially down Wimer told Scarborough that commercial activity exceeds residential sales.
"Commercial is much more robust the last four or five months than last year when it was completely dead," said Wimer. "There is no question commercial is much more active than residential real estate."
Insight for house hunters
Scarborough questioned Wimer whether it's a good time to buy a house and the level of pessimism among sellers who are not seeing the prices they want for their properties.
"It's a terrible time to sell and a tremendous time to buy," said Wimer. "Sellers believe they can hold out for their price by waiting for the market to turn around."
Scarborough queried Wimer on recent real estate industry surveys.
"A (report) suggested a fair amount of pessimism, more so in New York City, I think, if I read the survey correctly, than, say, on Long Island or other places, or Albany. There is pessimism about the current market for sellers but optimism about the future. Is that right?"
Wimer agreed, "This cycle is going to take a while to work its way through but at some point there will be inventory and the sellers, at some point, will settle for a lesser price. The banks have to start lending a little more, and they're being prudent now. All these things have tied up the market."
The title industry leader told Scarborough that he disagrees with bears in the market who believe a deflationary environment will be sustained. "I think if you can find a house to buy now, it's going to hold its value over the long haul and appreciate substantially. In my opinion, in five or ten years from now this will be a non-event."
Rechecking the standards
The WNBC journalist also asked Wimer whether the standards should be raised back to a standard that demanded 20 percent down and proof of income before you can get a mortgage.
"I would say the standards have to be raised," Wimer said. "I'm not sure whether they should be raised to 20 percent down. I think that we've gone from being not strict enough to being overly strict. I think they should be raised. The 20 percent is probably a good rule of thumb but there are times that maybe 15 percent would do it, depending on other factors, such as a person's other assets."
Wimer reminded that the title industry sits on the front lines of the real estate industry, utilizing its expertise to provide assurance that the title on real estate being offered for sale can be legally conveyed and thereby provide confidence in the transaction.
The New York State Title Economic and Research Committee is part of New York Taxpayers for Economic Justice, a coalition of New Yorkers who believes that a strong and robust economy is predicated on a vibrant free market that generates jobs, new economic growth and protects our state's quality of life.
For more information, visit www.nytaxpayersforeconomicjustice.org.