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May 31, 2006

Not buying? Why Not?

With Sullivan County sales down about 15 to 20% over last year, there's no doubt that the real estate market has slowed. (It hasn't died, by any means --- a 20% drop in sales brings us back to 2004 levels, which was considered a very healthy year here.)

People are looking, to be sure - my weekly gas bill can attest to that! But I'm picking up a hesitency right now to actually buy. Realtors are rife with opinions and speculation that all seem to lead to the "too highs" --- interest rates, house prices and gas prices. Which may be true. But I'd like to ask you the question: If you've been thinking about buying a home (primary or second), what's keeping you from doing it now? Please think about it and try to be specific. Are prices too high, or you just don't see the value? Among you and your friends has real estate "cooled" from being a hot investment? Do you think prices will go down, or are you more generally hoarding your acorns to see what happens with the economy?

I don't know what your answer is, but I'd love to hear it. Please add your comments! Thanks.

May 30, 2006

Higher Gas Prices Good for 2nd Home Market?

I confess, I have a contrarian streak, and this may be one of my more extreme instances of contrarian limb sitting. But I think that higher gas prices may actually help the second home market in the Catskills. Of course, you may not agree, when the gas pump clicks past $70 to fill your big SUV tank. But have you checked the cost of airline tickets lately?

Sure, we've become addicted to cheap oil, but we've also grown accustomed to even cheaper airline tickets. During the recent bloodbath era of airline competition (which led to the bankruptcies of 4 major network airlines as well as a number of smaller carriers), most of us New Yorkers expected ticket prices to Florida to be under $200 round-trip, and would sometimes hold off on buying tickets until the price got closer to $100! Today, the reality is that prices are closer to $400 for many trips, and during the peak summer season a family of four might be looking at $1,500 or more for airfare alone for that trip to Orlando. The days when we joked that the cab to the airport cost more than the flight are over. Next winter, its going to cost those South Beach sun bunnies a lot more to do the weekend commute between the Big Apple and the Big Orange.

Compare that to the increased costs to drive from NYC to the Catskills. Even in the biggest gas hog, the gas costs for a round-trip have risen from $40 to maybe $60; with 4 people in the vehicle, that's an extra $5 each. The "snack pak" on a flight to Florida costs more than $5! A year ago, that family of four could have flown to Florida for $1,000; now its upwards of $1,500 --- or $125 a person more --- and its likely to continue rising.

The common belief is that the jumbo jet era killed Catskills tourism, or at least the big and glitzy Catskills resorts. When you could jet off for cheap to the El San Juan or Fontainbleu, why drive up to the Concord or Grossingers? Weaned on ever cheaper airfares, we've ventured further and further afield on ever shorter trips. How can you not go for a 3 night getaway in Cancun for $399? But when it costs $799 or $899, you're talking serious money. Not to mention the hassle. The GW Bridge may be maddening on a Friday evening, but its nothing like getting 3 kids, a stroller, 2 laptops and your steel shanked shoes through security at JFK, only to find out your flight is delayed for 3 hours because your inbound plane hasn't left Wichita yet.

And that brings us back to the Catskills, and the appeal of the time-honored drive-away vacation. Even if gas prices hit $5 or more, its still relatively cheaper to drive here than fly there. There's no incremental cost to loading in another kid or house guest. And if gas prices continue to climb, those gas hungry Suburbans and Expeditions will eventually give way to fuel sipping Subarus and Toyotas.

Gas prices may have gone up a lot, but airfares have gone up even more. As New Yorkers start to realize that it isn't cheap any more to flit off to Ft. Lauderdale for the weekend - especially if you're bringing the family - there may be renewed interest in the relatively affordable and accessible drive-away getaway. And the best value, in terms of both affordablity and accesibility is - you guessed it - the Catskills. Who knows, maybe we'll even see Joan Rivers come back and play a room!

Yes, I'm finally starting a Sullivan real estate blog

Memorial Day weekend here was absolutely beautiful, and as holiday weekends tend to be slow real estate-wise, I was able to hit a number of parties, barbeques and benefits. (No, I'm not running for political office and did not kiss any babies.) People are always talking to me about my website, especially the 'Current Market Conditions' section, and there's often a lively discussion. In between the monthly 'Market Conditions' updates, a lot can happen. New listings, particularly interesting sales, shifts I pick up from buyers and sellers that I talk to, and the monthly releases of national and regional housing data. There's also news, like the status of Swinging Bridge reservoir or the proposed power line project (and the fight against it). For those of you who now me, I probably have opinions about it all. And visitors to this site have a lot of opinions, as well.

Over the weekend, a couple of people encouraged me to start a blog. And when I mentioned it to some others, they thought it was a great idea. So here it is, bare bones right now, but give me a week or so to get some topics going. And if there's a topic you'd like me to start, please drop me an email.

There are a couple of ground rules, though. Because I'm a licensed real estate broker, there can be no discussion of commission rates (brokers cannot engage in discussions of commission rates, as it is a violation of Federal anti-trust laws.) Also, please refrain from making comments about any other specific real estate broker or agent; comments about me, pro or con, are fair game, but comments about other real estate professionals can put me in an uncomfortable situation.