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Michael Ardolino

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By Samantha Rutt

A significant shift is coming to Long Island’s real estate market, with the National Association of Realtors agreeing to a settlement that could alter how buyers and sellers pay their agents.

In mid-March, the NAR reached a settlement agreement with home sellers who argued that NAR policies unfairly inflated commission rates. While the details are still being finalized, the agreement is set to impact the real estate market, both for buyers and sellers.

For years, the NAR faced lawsuits alleging their rules for Multiple Listing Services — the system where homes are advertised — restricted competition and kept commission rates artificially high, allegedly violating U.S. antitrust laws and regulations. 

The settlement, valued at $418 million over four years pending court approval, doesn’t admit wrongdoing by the NAR but allows sellers more freedom in how they offer compensation to buyers agents. Previously, commissions were often set through a system of predetermined splits between listing and buyers agents.

“There’s been a lot of misinformation about the settlement with the National Association of Realtors,” Darryl Davis, a real-estate coach based in Rocky Point said. “There has been no removal of any percent of a commission. To summarize, real estate companies have not been impacted at all because commission amounts, or the percentage, was not part of the lawsuit or the settlement.”

Local realtors are still analyzing the full scope of the settlement. However, early indications suggest a shift toward a more negotiable commission structure.

“Part of the settlement was that there would no longer be an offer of compensation on the multiple listing agreement for the agent that brings the buyer to the property,” John Fitzgerald of Realty Connect USA said. “So now for that agent to get paid, they’re going to have to have a contract with the buyer for compensation and that is changing our industry.”

What this means for buyers and sellers

“It really affects the seller,” said East Setauket-based Michael Ardolino, also of Realty Connect USA. The settlement “affects the sellers and the buyers more than anybody.”

For home buyers, this could translate to potential savings. Traditionally, buyers agents received a set commission, often around 3% of the sale price. Now, sellers may offer a lower commission to incentivize buyers agents to show the property.

However, some industry experts warn this might not be a guaranteed benefit for buyers, especially for those applying for loans from the Federal Housing Administration or Veteran Affairs. 

“The problem is, if the buyer is going to pay the compensation to the agent, you’re not incorporating it into the property — as far as getting it from the proceeds of the sale — [and that] then is going to have an effect on FHA buyers and VA buyers and that’s extreme,” Fitzgerald said. 

“If it’s a first-time homebuyer and they have an FHA, you buy a house with 3.5% down and you can mortgage up to 6% of your closing costs. Now you have to add a brokerage fee on top of that — that might put that buyer out of the market. Same thing for the VA. That might be a little bit difficult for primarily first-time buyers,” Fitzgerald explained. 

For sellers, the impact is a bit more complex. Increased negotiation over commissions could add time to the selling process. On the other hand, some sellers may be able to attract more interest by offering a lower commission to the buyer’s agent.

The road ahead

The Long Island real estate market is known for its competitiveness and this settlement is likely to add another layer to the negotiation process. Ultimately, how this settlement plays out for the Island’s buyers and sellers remains to be seen. However, one thing is certain: The way real estate commissions are negotiated on Long Island is about to change.

The NAR settlement is expected to take effect in mid-July. 

By Michael Ardolino

Michael Ardolino

Another year is coming to an end, and a new one is about to begin. It’s time to look back at the real estate trends of 2023 and what experts are predicting for 2024.

2023 in review

The real estate market in 2023 displayed some interesting dynamics, with fluctuations in mortgage rates and a continued appreciation of home values. Buyers are looking, and there aren’t enough homes on the market. 

As I mentioned in last month’s column, people are still moving to the suburbs, and there is solid evidence of that trend here on the North Shore of Suffolk County. What we’re seeing is more demand for homes than there are currently up for sale. It may not be the same as the previous couple of years; however, the demand is still there.

— From October to December, we experienced a 3% decrease of homes on the market in Suffolk County.

— Nearly 60% of homes in the county sold above the asking price.

— Suffolk County homes sold for over 3% higher than a year ago.

— Rates climbed to nearly 8% this year but dipped toward 7.5% recently for a 30-year mortgage.

 Looking forward to 2024

Predictions indicate a positive trajectory for home prices, a decrease in mortgage rates and potential interest rate cuts by the Federal Reserve in 2024. The Feds cutting interest rates, possibly multiple times in the coming year, would end 20 months of rate hikes.

In an article posted to the HousingWire website, Lawrence Yun, National Association of Realtors’ chief economist, said data shows inflation is easing, which could lead the Federal Reserve to cut rates.

“I think that the Federal Reserve will cut interest rates four times in 2024,” Yun said. “Inflation will be much calmer, [and] the abnormal spread between mortgage rates and the 10-year treasury [yield] will begin to normalize or narrow.” 

Some real estate experts have gone as far as predicting that home prices will continue to rise over the next five years. It’s difficult to predict that far out as real estate is inherently uncertain as it’s influenced by local economic and global factors. 

The one thing we know is that homes are appreciating right now and mortgage rates are currently decreasing. We don’t have a crystal ball to know what will happen over the next few years. We do know what’s going on now.

Advice to sell before more houses are listed in the spring aligns with the current market conditions and trends.

Spring ahead

If you’re thinking of selling, don’t make the mistake of waiting until the weather gets warmer. Now is the time to sit with a real estate professional and to prepare your home. Go through your house and donate the furnishings and items you don’t need and finally make those small repairs on your to-do list.

Takeaway

Potential sellers should stay informed about the latest market developments and consider consulting with real estate professionals for personalized advice.

So … let’s talk.

Michael Ardolino is the Founder/Owner Broker of Realty Connect USA

METRO photo

By Michael Ardolino

Michael Ardolino

One trend remains from the “unicorn years” — people continue to move away from dense areas and are attracted to Suffolk County’s North Shore. The allure of suburban living continues to grow as potential buyers reinvent their lives with less traffic and fewer crowds than in the city.

Inventory low, appreciation high

Buyers attracted to our towns and villages need houses to buy, and yours could be one of them.

Suffolk County experienced a slight increase of .6% in the number of homes on the market from September to October. While the norm during colder months is a decrease in inventory, after a few years of a sellers market, the recent increase isn’t enough to satisfy demand. 

Last month, Suffolk County homes sold for 3.6% more than they did last year at the same time. In October, nearly 60% of homes sold for over the asking price, providing a golden opportunity for potential sellers to sell now.

Listing before 2023 ends or early in the new year while competition is still low can result in higher demand for your home and, possibly, a more lucrative offer.

Potential sellers who have paid a good percentage of their mortgage — especially if they are downsizing or retiring to a less expensive area — can pay off a new home or most of it, avoiding high mortgage rates. Rates can be refinanced in the future, and if they continue to increase, with a fixed mortgage rate, you’re locked in. 

Before you list

Selling a home requires careful consideration and planning. Here are some key steps:

◆ Meet with a real estate professional and get all the facts to make an educated and confident decision about selling.

◆ Before you choose a broker, ask how many homes an agent has sold in the past year.

◆ Visit your dream town to see if it meets your expectations and how the market is doing there.

◆ Just flirting with the idea of selling? Start making repairs on your home.

◆ Remodeling? Consider who today’s average buyer is and what they would look for in a home. 

 Takeaway 

Make an informed decision. Selling or buying a home is a financial investment and a lifestyle choice. Sit down with a trusted real estate professional to make the best of today’s market and the wisest decision for you and your family.

So … let’s talk.

Michael Ardolino is the Founder/Owner Broker of Realty Connect USA

Image from Michael Ardolino

By Michael Ardolino

Michael Ardolino

‘Unicorn’ Years

There’s no room for fairy tales in real estate. Many headlines have occurred because many articles compare today’s real estate market with the last few years, which experts have dubbed the “unicorn” years where home prices reached unsustainable record highs.

A few years ago, a frenzy in the market began. We saw record high sale prices and incredible opportunities for both buyers and sellers. Sellers sold above top dollar and buyers had the lowest mortgage rate at their fingertips. The market seemed too good to be true but it all really happened. As we return to a more normal market you may ask yourself “Did I miss out on selling my home for a great price? The answer is “No! You haven’t missed out on selling your home for top dollar!” Inventory is still so low that there is not much competition for sellers.

Inventory has been low for a long time, and plenty of potential buyers remain on the market. The lack of inventory has maintained a market that favors sellers and buyers.

Homeowners thinking of selling would be wise to get their houses on the market. With a lack of inventory and a great amount of buyers, there is still competition for homes on the market.

“When supply is so low, your house is going to be in the spotlight. That’s why sellers are seeing their homes sell a little faster and get more offers right now. If you’ve thought about selling, now’s the time to make a move.” – Keeping Current Matters

Takeaway

Overall inventory is very low. Sellers are still selling for top dollar and buyers are still lining up to buy homes on Long Island. If you’re thinking of selling in the near future,  Autumn is the ideal time to take care of minor maintenance around your home. You’ll want to have your furnace inspected, change the air filters, inspect chimneys, trim trees and clean the gutters. For sellers, the time is right.  So … let’s talk.

Michael Ardolino is the Founder/Owner Broker of Realty Connect USA

Graph from Michael Ardolino

By Michael Ardolino

Michael Ardolino

Many real estate experts will tell you when selling a house, no matter what the market is like, the seller can get a great return on their investment if they understand market trends. This particular piece of advice is always worth repeating.

Right now 

Many buyers were starting to acclimate to raising mortgage rates, which doubled within months in 2022. Lately, things have been improving. As of April 6, Freddie Mac reported an average 30-year fixed-rate mortgage of 6.28%, which was down from 6.32% the week before, making it the fourth seven-day period in a row where rates decreased.

A dip in mortgage rates leads to more buyers returning to the market.  

For countless potential homeowners, the obstacle will not be the mortgage rates; it will be the low inventory.

“Mortgage rates continue to trend down entering the traditional spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist, in a press release. “Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers.”

Low inventory combined with higher rates than last year means prices are remaining steady across Long Island.

In a recent article on the Keeping Current Matters website, Lawrence Yun, chief economist at the National Association of Realtors, projected home prices will remain steady. “We simply don’t have enough inventory,” Yun said. “Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30% price decline is highly, highly unlikely.”

In other words, most real estate experts are not predicting another housing crash.

Be a savvy seller

While home prices remain steady, buyers are not offering more than the asking price for houses that need work. How do you get your house to sell quickly? Make any necessary repairs. As I have mentioned in past columns, this doesn’t mean elaborate renovations. It means you must fix that leaky faucet, running toilet or damaged flooring.

Sellers also need to be flexible with showings. Keep your home clean and organized so that when an agent calls to say a buyer wants to look at your home, it can be viewed at a moment’s notice.

Most important of all, now more than ever, you want to work with a real estate agent who prices your home realistically. Look at what similar homes sold for in the past couple of weeks, not the last few years.

Take away

Sellers who are practical regarding pricing — looking at today’s prices and not yesterday’s — and choose to work with a real estate professional can garner a great return on their investment. 

So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA

Image from Michael Ardolino

By Michael Ardolino

Michael Ardolino

Real estate professionals are seeing more foot traffic at open houses, and here’s why.

Spring is in the air

The early part of the year can be slow for the housing market. As the weather warms up and the days are longer, more people search for their next home. Spring is a perfect time for potential buyers with children to look for a house before a new school year begins.

The trend means real estate agents are seeing more predictable seasonal patterns than in the last few years.

Inventory remains low  

One of the main reasons open houses have been busy is that the Suffolk County housing market is still experiencing a supply shortage. Low inventory is key in how the real estate market is favoring homeowners.

Buyers may not find what they are searching for when they attend open houses. Your home could be the exact one someone dreams of and would love to move into in the upcoming months — if the price is right.

As I have mentioned in past columns, to do well in today’s market, sellers need to ensure that their homes are priced correctly. An expert real estate professional studies national and local trends and is able to translate that information to help you make a decision based on trustworthy information. One that will have your house on the market at a price that is attractive in today’s market.

For homeowners who aren’t ready to sell just yet, now is the time to start prepping your home and sitting with an agent. Financial experts believe 2023 will be a positive turning point in the housing market, despite national news headlines threatening a crash.

Those experts include Nadia Evangelou, senior economist and director of research at the National Association of Realtors, who told the website Markets Insider, “We don’t expect any housing crash.” Backing that forecast is NAR’s pending home sales index sales showing slightly higher sales in the last two months.

Buyers are out there

While mortgage rates have been going up, savvy buyers know that they can renegotiate a better rate at a later time. Mortgage applications have increased by 7.4% as of March 3 from the week before, according to the Mortgage Bankers Association. 

Here’s another thing knowledgeable buyers know — the rates can be even higher. When looking at historical data on Freddie Mac’s website, people will find that every decade, starting with the 1970s, has experienced highs and lows regarding mortgage rates.

The increase has been due to the Federal Reserve’s taking an aggressive stance to curb inflation. While mortgage rates have deterred some potential buyers, it hasn’t hindered others.

“Higher mortgage rates will be a hurdle but ultimately will not keep  [buyers] from getting back into the market after sitting on the sidelines for months,” said Lisa Sturtevant, Chief Economist at Bright MLS.

Takeaway

In the long run, sellers and buyers can do well as long as they know to gather all the information they need. Whether it’s a buyer looking for the best mortgage rates and knowing they can renegotiate a better one in a few years, or a seller pricing their home at a competitive price, real estate professionals can provide valuable information to help make crucial decisions. 

So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA

By Michael Ardolino

Michael Ardolino

There is optimism and opportunity in the current real estate market.

What’s trending

Mortgage rates hovered in the 6% range over the last two months after peaking at 7.08% last fall, according to FreddieMac’s Primary Mortgage Market Survey. As of Thursday, Feb. 9, FreddieMac reports a 6.12% rate. We’re now seeing more buyers infiltrate the market again who pulled out during the recent rate hikes. Renewed opportunity for a larger buyer pool means you may see more action for your house, and possibly more offers that will come in. As for buyers, it’s still very early, and you can get into the home you’re looking for before other buyers continue joining the market again.

“Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market,” said Lawrence Yun, National Association of Realtors chief economist.

Lisa Sturtevant, Bright MLS chief economist, also stated, “Mortgage rates fell throughout January, prompting more buyers to view properties and make offers. Inflation has begun to ease, boosting consumer confidence. Many agents and brokers are expecting a robust [housing] market, and the overall mood in the market feels much more optimistic.”

Why now?

Unemployment at 3.4%, easing inflation, and low rates improve affordability significantly. This gives your buyers more room to bid higher on your house, and as a buyer yourself, you can submit a much stronger offer than you would when rates are higher.

It’s important to understand that 6%, and even 7%, rates are still low when compared to how high they’ve gone several times in the past, and you’re still getting a great rate. Although rates dropped throughout January, there are mixed predictions about what the rest of the year will bring. Local home prices are stabilizing, while inventory remains low and is inching toward a more balanced market (see graph). Knowing the theory of supply versus demand, wise sellers can jump to put their house on the market before inventory continues to increase.

Timing, how you price your house, and guidance from a real estate professional who does research and stays up to date on the market is essential to your bottom line and how quickly your house will sell.

Takeaway

Take advantage of your built-up equity and the current market: historically low rates, easing inflation, low unemployment and low housing inventory. An experienced real estate agent who does their due diligence of research and homework, as well as stays up to date on current market trends, will make a significant impact on the success of selling your home. 

So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA

Photo by David Ackerman

By Leah S. Dunaief

Leah Dunaief

Maybe it sounds like I’m tooting our horn too much, but I have to say how proud I am of the columnists who write for our papers and website. They are clearly bright and offer the reader information and knowledge that aren’t usually found even in a big metro daily or a glossy magazine. They are, collectively and individually, one of the main reasons our hometown newspapers have managed to survive while so many of our colleagues, 25% of them in the nation, have had to shut their doors.

Readers want to learn from our regular columnists, who, by the way, are local residents. That’s not surprising, though, because the population we serve is exceptional, accomplished in their own right, and can be expected to harbor such talent. Let me explain.

The columnists are found in the second section of the newspaper, called Arts & Lifestyles. In the interest of full disclosure and without false modesty, I point out and salute my youngest son, Dr. David Dunaief. He is a physician totally committed to helping his patients, and the high regard is returned by them in equal measure, as testimonials about him confirm. In addition, he writes every week about current medical problems and brings readers up to date with the latest research and thinking regarding common ailments. I know him to be a voracious reader of medical journals and he footnotes his sources of expertise at the end of every “Medical Compass” column. 

Dr. Matthew Kearns is a longtime popular veterinarian who writes “Ask the Vet,” keeping our beloved pets healthy. Michael E. Russell is a successful, retired financial professional who cannot cut the cord with Wall Street, and  shares his thoughts on the economy and suggesting current buys on the stock market. He will also throw in something irreverent, or even askance, to keep you tuned in. 

Also writing knowledgeably on the contemporary scene about finance and the economy is Michael Christodoulou, who is also an active financial advisor. Ever try to read your auto insurance policies? If I had trouble falling asleep, they would knock me out by the second paragraph. Enter A. Craig Purcell, a partner in a long-established local law firm, who is attempting to explain auto insurance coverage, a merciful endeavor, with his column. His words do not put me to sleep. Shannon Malone will alternate the writing for us. Michael Ardolino, a well-known realtor, somehow manages to make both ends of a real estate transaction, for buyers and sellers, sound promising at this time. 

Our lead movie and book reviewer is the highly talented Jeffrey Sanzel. In addition to being a terrific actor, he is a gifted writer and almost always feels the same way about what he is reviewing as I do. No wonder I think he is brilliant.  Father Frank has been writing for the papers for many years and always with great integrity and compassion. 

John Turner, famous naturalist and noted author and lecturer, keeps us apprised of challenges to nature. This is a niche for all residents near the shorelines of Long Island. He also writes “Living Lightly,” about being a responsible earth dweller. Bob Lipinski is the wine connoisseur who travels the world and keeps us aware of best wines and cheeses.

Lisa Scott and Nancy Marr of the Suffolk County League of Women Voters, keep us informed about upcoming elections, new laws and important propositions. Elder law attorney Nancy Burner tells us about Medicare, estate planning, wills gifting, trustees, trusts and other critical issues as we age.

The last columnist I will mention is Daniel Dunaief, who, like bookends for my salute, is also my son. Among several other articles, he writes “The Power of Three,” explaining some of the research that is performed at Stony Brook University, Brookhaven National Labs and Cold Spring Harbor Laboratory. He makes a deep dive into the science in such a way that layman readers can understand what is happening in the labs. He has been paid the ultimate compliment by the scientists for a journalist: they pick up the phone and willingly talk to him, unafraid that he will get the story wrong or misquote them. In fact, he has been told a rewarding number of times by the researchers that his questions for the articles have helped them further direct their work.

When my sons began writing for TBR News Media, a few readers accused me of nepotism. I haven’t heard that charge now in years.

P.S. Of course, we can’t forget Beverly C. Tyler and Kenneth Brady, stellar historians both.

By Michael Ardolino

Michael Ardolino

So far, there is much less inventory on the market for the first quarter of the new year than originally predicted. What this means for sellers is less competition than previously anticipated and a higher chance of selling your home for top dollar. Inventory is not easily predicted accurately, so sellers should continuously watch inventory levels and make decisions based on current facts and statistics. 

As for buyers, it’s also savvy to focus on mortgage rates. The year 2022 showed a clear positive correlation — meaning variables or values that travel in the same direction — between inventory and mortgage rates. When mortgage rates changed, so did inventory. Rates are nearly double what they were this time last year, and it’s clear that has affected inventory. (See graph above). The great news is these rates are still very low (especially compared to rates in the 7% range last October), competition is softer among buyers versus January 2022, and there are still options to buy. 

According to Mike Simonsen at Altos Research, “the data doesn’t say ‘wait for an influx of homes.” He goes on to explain there is more inventory than this time last year, so buyers now have more options. There is no concrete evidence that supports the idea that a sudden wave of inventory is hitting the market. With fluctuating mortgage rates, taking advantage of the current market is strongly recommended.

Job market affects housing market 

According to The New York Times’ December Job Report, several fields, such as medical, retail, construction, etc., generated job growth. “Employers added 223,000 jobs in December, the Labor Department reported.” Unemployment stands at 3.5%, proving stability and a healthy workforce.

Lydia DePillis at The New York Times states, “layoffs and initial claims for unemployment insurance have remained extremely low, while the gap between the number of available workers and listed jobs is far larger than its historical average,” meaning less available, or unemployed workers in a time of high employee demand. Jobs added to the market and current decrease in unemployment will lead to more potential homebuyers, especially with many looking to buy instead of rent. 

I’ve mentioned in previous articles the “shining star” of real estate is equity. Property ownership is one of the greatest hedges against inflation and can be tapped into in cases of emergencies. Since data of our local real estate market does not show price depreciation in the near future, purchasing a home now will build your equity and will provide a sizable return on investment (ROI) when you resell. 

Takeaway 

Right now is still an excellent opportunity to put your home on the market, and things are looking up for buyers as well. Sellers should take advantage of the current low inventory levels, and both sellers and buyers should take advantage of historically low mortgage rates and a strong job market. Equity in real estate is an excellent financial hedge, and locally appreciating homes will increase your ROI in a future resale. So … let’s talk. 

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA

Image from Michael Ardolino

By Michael Ardolino

Michael Ardolino

The market is shifting; sellers and buyers will still see home price appreciation and gains in their equity.

How does the shift affect home prices?

Demand remains higher than supply, so home prices are appreciating, and sellers will still get a good amount of offers even if it takes a bit longer. In Suffolk County, houses appreciated nearly 10% and higher since last year and more than 50% got over the asking price. Sellers are still making a significant profit.

The steep incline of market values and buyer rush is now pacing itself and most experts predict the appreciation will continue. David Ramsey, a personal finance personality, says, “The root issue of what drives house prices almost always is supply and demand…” and we couldn’t agree more. When priced correctly, houses are still selling at record-high prices and low days on the market.

Certainty of equity

One certainty in a time of uncertainty, mixed news, and mixed predictions, is the value of equity in real estate. According to CoreLogic’s 2022 Q2 Home Equity Report, “the total average equity per borrower has now reached almost $300,000, the highest in the data series.” 

The year-over-year equity percentage for U.S. homeowners with a mortgage has increased 27.8%; this is a $60.2K average equity gain.

Selma Hepp, interim lead of the Office of the Chief Economist, CoreLogic, stated “For many households, home equity is the only source of wealth creation. As a result, recent record gains in equity and record declines in loan-to-value ratios will provide many owners with a financial buffer in case economic conditions worsen. In addition, record equity continues to provide fuel for housing demand, particularly if households are relocating to more affordable areas.”

Equity builds long-term wealth gain for homeowners, and should you want access to additional funds, you can always rely on the equity you’ve grown. In times of financial uncertainty, follow the certain.

The shining star

Sellers, as your home value has appreciated considerably, tap into the profit from your equity and take advantage of the current market conditions. Timing is everything and ask your local real estate professional to help you research the area you’re looking to move. Your real estate agent can also help you connect with a professional in that location with expertise in their market conditions.

Homebuyers are future sellers, and they can feel confident to invest in a home now and build their own equity knowing price appreciation is forecasted. When a homebuyer becomes a seller, they’ve already paid off some of their mortgage and can take advantage of the real estate market at the time and come out with a significant profit themselves.

Takeaway 

So, the shining star of the market is demand still predominates supply. Home price appreciation is still forecasted, and equity gains are at record-highs. A market shift can be easily navigable with the help of a real estate professional.  So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.