We have not seen the end of the foreclosure/short sale tidal wave. More than likely, I think it will last at least another two years to get a lot of the bad loans from the system. I doubt that the drop will be as much as Deutsche Bank predicts and that article was written in June - since then we've seen an increase in sales. Alot also depends on the economy in general and what the Fed and Obama Administration do over the next several months. An extension and expansion of the first time home buyer credit could go a long way to spur the housing market but we'll have to see. If you're trying to time the market, much will depend on your long term goals in buying. Good luck.

Ralph Windschuh
Century 21 Princeton Properties
631-467-0009
rwindschuh@c21princetonproperties.com

I can't say that I agree with this analysis. I know that there will be a next wave of foreclosures, but even with the first wave, prices were only down 5-10% in my area. I know other areas were more hard hit. Manhattan apartments, for example, were down around 40%. But I'm talking about luxury properties. I think if you are a buyer, you can't count on prices going any lower for decent properties. In Queens, prices have actually started to inch up. Distressed properties may be another matter. It's an interesting discussion though and no one knows for sure what will happen in the next few months. I'm hoping that the current tax credits will be extended and/or expanded for next year. That will help the market.

Hi Leo

Not having seen all the data from Deutsche Bank I will give you my impression based on the TIME article you linked to. I would have to say that they are probably correct. Although as estimates are generally adjusted when the actual statistics come out this to will probably be an overly pessimistic guestimate by the bank.
As a NYS Certified Residential Appraiser and licensed agent I watch for these market estimates all the time and they vary to a degree based on the source. But just using the TIME article we can establish some sort of a time line.
The article indicates that the New York market peaked in the 2nd quarter of 2007 which is correct. So the 40 percent decline starts as of that time. The article also indicated that as of the 1st quarter of this year the market had already declined 19 percent(let's use that as an average since decline stats vary from neighborhood to neighborhood). The decline has continued into the 2nd and 3rd quarters but at a diminishing rate since that time period includes the traditional seasonal buying period. So taking that into account the market has already declined by more than half Deutsche Banks prediction. So accordingly the continued decline has another 10-15 percent to go, perhaps.
Please don't be taken in by average numbers. The media is usually late to the party and predictions vary based on how statistics are analyzed. And, with a complex market such as the NY metro area you could make a mistake and miss an opportunity. Buying a home also has many variables to be considered to determine your motivation.
The housing bubble started to inflate on the west coast until it covered the entire country. It has started to deflate somewhat on the west coast and will eventually reach here. What has aggravated and complicated the housing cycle is the toxic mortgage and financial crisis that followed a year later and will continue for several more years.
The current situation also presents opportunities for those capable of availing themselves of them. Currently we have a relatively high inventory of homes on the market. Add to that current and anticipated foreclosures, rising unemployment and a return to more conservative mortgage lending practices and what do you get? You get a very much prolonged recovery in the housing market. The same thing happened in the 1990 bubble that burst. Once prices bottomed they remained flat for approximately 5 years. This time it could take longer. But with government intervention to save our financial system it could work out somewhat differently.
So where does that leave you? If your time frame for living in your new home is short term, under 5 years, then you need to wait. There is no precision in estimating a bottom or recovery in housing or the stock market. If however you expect to stay 5 to 10 years or longer then I would say get out there and find your best deal, negotiate an even better deal and have a barbeque before it gets to cold! Great Neck is a great area. When the market does turn, appreciation should recover quickly there as buyers scramble to avoid missing the bottom.
As an appraiser and an agent I specialize in Nassau and Queens Counties and have done so for over 25 years. If you would like to contact me to discuss some recent stats and trends feel free to do so.

Good Luck!

Allen Bauman
Century21 Yve Realty
Hewlett, NY
NYS Licensed R.E. Agent
NYS Certified Residential Appraiser
516-791-3846
allen.bauman@gmail.com

P.S.: If there are any investors out there reading this response, what are you waiting for? It's a great time to look for multi-family income properties! Let's talk.