Sullivan County Real Estate

Selling a House in a Down Market

There's a good article today on Yahoo, Selling a House in a Down Market: 5 Tips. Some of the tips, like pricing your house realistically for the current market, are common sense and have been listed in many articles recently. But the author of article really emphasized the importance of marketing your house as a "turnkey", not a "turkey." I couldn't agree more.

I'm really amazed at how, in this very competitive market for sellers, so many houses aren't prepped for sale at all. A fresh coat of paint, decluttering the interior, making minor repairs, trimming the hedges and mowing the lawn can do wonders to increase the appeal of a house. And I really agree with the article's author that sellers should consider getting a pre-sale home inspection, so they can either take care of repair items, or have estimates available to potential buyers about the cost of repairs.

Sellers, you can have the best real estate agent in the county plugging your house, but the tried and true comment when showing a less-than-great house, "This could be soooo cute if you just...", well, just isn't working. Buyers aren't looking for fixers right now, unless they're priced dirt cheap, and roof leaks or wood rot are the kiss of death.

Agents taking out buyers will give a house the benefit of doubt for the first or even second showing. But we want to show attractive houses that are ready to sell, and if we get negative reactions a couple of times, a house moves way down the list of places to show. And once a house has picked up a negative reputation, its hard to break it even with substantial price reductions. So sellers should get ahead of, rather than behind, the eightball and make their houses a delight to show.

But sellers also shouldn't assume that primping will compensate for an overpriced house. Some pots of mums on the front porch and a freshly painted front door will not get a buyer to pay $400,000 for a house that's really worth $300,000.

National Existing Home Sales Data Released For August

Whoever thought that the monthly existing home sales data compiled by NAR (the National Association of Realtors) would be headline news? It might not have been the lead item on tonight's national network news shows,  but it wasn't close behind, and well before the DOW and NASDAQ numbers.

The decline in sales prices wasn't unexpected, but nationally, the 1.7% drop in the year over year median sales price was the first reported in over a decade. Over the past month or two, individual regions have reported year over year slides, but this is the first in the national data. Regionally, the northeast reported a larger 3.9% decline in the median sales price over August, 2005. Total sales of single family homes dropped 12.6% year over year, with an 11.6% drop in the northeast.

Gosh, given the buildup by Katie Couric, Brian Williams and Charles Gibson, you'd think the sky had fallen and we all need to scurry off to our real estate investment fallout shelters. Frankly, given the (welcome) pullout of speculators from the market, I think the overall performance of the real estate markets is surprisingly good. And here in Sullivan County, if you've read some of my previous posts, we're not seeing the price declines that some of the areas around the northeast are experiencing.

So, when do you think I can pick up the one bedroom in Manhattan below 96th Street that I want for $250,000?

Market Picking Up, Pall Seems Over

The real estate market seems to be picking back up, after a summer seasons that sputtered along in fits and starts. Many sellers had been holding to unrealistic price expectations based on price appreciation rates of the past few years. And many buyers had been, well, just holding, fearing a sharp downturn. Throw in high gas prices and rising mortage rates, and it added up to a real estate market in need of a double dose of ExLax.

There's been a definite change in the last month, with a sharp rise in deals in the mid market range (from $250K to $400K). When I've been calling listing agents to make arrangements to show properties, I've been hearing over and over that there's a deal on this property or that property. Of the 5 most recent deals I've worked on putting together, there have been other bidders on 3 of them. The multiple bidding hasn't been as aggressive as last year, but the fact that there have been other bidders on some of these properties has come as a surprise, given all the media coverage of real estate doom and gloom.

Where I'm seeing the action is in the mid-market. Earlier in the summer, most buyers I saw were looking in the mid to budget range, around $200,000 to $250,000, with very little interest above $300,000. Recently I've seen interest return to the mid market between $300K and $400K, and that's been where all of my most recent deals have been.

I think there are 2 factors. One is that sellers have read the writing on the wall, and reset their price expectations to much more realistic levels. I've seen a lot of new listings come on the market at very realistic prices, and some of those have sold very quickly. Other sellers have made significant price reductions and found a buyer. In a parallel move, a lot of buyers have raised their price expectations somewhat --- and together, buys and sellers are finding a new market range.

Don't jump to the conclusion, though, that the market is moving again because prices have collapsed and bargain hungry buyers are swooping in to snap up fire sale bargains.  It appears that the median sales price will be holding right around $190,000 when September sales are closed out in about a week, and in looking at forward sales in contract, we'll probably be trading around that level for the next few months.

While the mid market seems to be finding a new equilibrium, the upper end of our market (which starts at about $500,000) continues to feel very soft. I'me just not seeing a lot of buyers looking for trophy property right now. Contributing to the slowness in that market segment has been the reluctance of upper end sellers to adjust to the changing market.

On the inventory side, the inventory increases we've seen since the winter have started to reverse. So far in September, inventory has pulled back slightly from 1,260 houses to 1,243 houses on the market. Asking prices also continue to retreat, down to an average of about $292,000 (from a peak of $303,000 earlier in the year.)

Sullivan County MLS Search Set Up On My Website

If you've shopped for property in other areas (with the exception of Manhattan, that doesn't have a Multiple Listing Service), you've probably gone to a Realtor's site and found a button that says "Search the MLS" — giving you the ability not to search just that broker's listings, but all listings available through the Multiple Listing Service.

One of the big frustrations for many buyers here has been the lack of that capability. Buyers who just want to surf through listings online have had to go from site to site, seeing a few listings here, a few there. Or there was the fallback to Realtor.com, a nationwide MLS aggregator operated by the National Association of Realtors. If you've used Realtor.com, though, you may have found the experience less than satisfying. Most listings, for example, only have one photo, and its not possible to do some things like search by lake community (an important feature for many buyers looking in Sullivan County.)

The Sullivan County MLS has been working to make the MLS data available for individual brokers and agents to display on their websites. The technical term for the capability is "Internet Data Exchange" or IDX. IDX, though, just makes the raw data available --- and let me tell you, its pretty raw, you might call it 'listings tartare.' Its up to individual members to contract with a third party vendor to provide a user-friendly search and display mechanism, or to hire programmers to create it.

For the time being, I've contracted with IDXPro to put the MLS data on my site. (Click here to go to the new search page.) The IDXPro system is pretty good — there are a lot of great capabilities, like the ability to search by subdivision or lake community, age of house, house style or acreage. So now, you can search for all farmhouses on 10+ acres priced between $300,000 and $500,000, for example. You can save your searches, email listings to a friend and even set up an automatic search to notify you of new listings that meet your criteria.

IDXPro, though, is still kind of generic for the type of searches I think buyers want to do here. For example, lakefront, riverfront, streamfront and properties with ponds all roll up in to one search selection "Waterfront." And there's no way to search for houses with lake rights that aren't "Waterfront". Property taxes also aren't included in the search results, and property taxes are an important factor for many buyers. While you can search by village or township, I think it would also be helpful to be able to search by region of the county, sort of like the way I've divided up the county on my County Areas page.

I can't find an off the shelf system that will do all of that, so I guess I'm going to have to roll my own. It will probably take a few months. One thing I'd like to hear from you is what you'd like an MLS/IDX online real estate search system to do. There are a few things I can't do, though. Showing property addresses is a no-no — the Sullivan MLS has decided that properties addresses can't be displayed. So is showing "Days on Market". But a lot of other stuff --- things you want to search by or things you want to know about a property --- is very possible. Please play around with the new Sullivan County MLS Search and then leave some comments about what improvements you'd like to see.

Sullivan Outperforming Orange

Today's Times Herald Record, the local daily based in Orange County, featured a startling headline, "Local Housing Prices Fall 5%". The Orange County Association of Realtors reported that the median single family home sales price was $323,000 in August, down 5% from August, 2005 and down 2% from the previous month. Price pullbacks in that range are being reported in a number of markets nationwide.

But not here in Sullivan County. While I'm always hesitant to look at single month data for this county due to the small sample size (my monthly Market Trends Report is based on 3 month trend data), I couldn't resist looking at how our August compared to Orange County, the rapidly suburbanizing Gioliath to our south. In August of this year, the average median sales price in Sullivan was $195,000, up 2.6% from the previous month and 11.4% from August, 2005. While the August data may be somewhat skewed by sample size, overall the trend here, much to my surprise, has been generally positive.

Do I have a thought on the reason "Why?" Of course. Does a zebra have stripes?
Orange County is a primary home market, and generally a value-focused one. The comuting circle from NYC has been pushing well into Orange because cost-conscious buyers looking for some elbow room could get a lot more for their money than in Westchester, Dutchess or the close-in Jersey suburbs. Affordability is a prime factor in the price conscious segments of any real estate market. With rising interest rates, a buyer who could have afforded a $400,000 2 story colonial may now only be able to afford a $350,000 house.

The strength in the Sullivan County market, in contrast, seems to be heavily in the second home segment. While traffic is certainly down from last year, there is a steady stream of second home buyers here, which may be a function of the almost nonstop positive coverage of Sullivan County this summer in the NY media. The relatively strong performance of the second home market here may seem counter-intuitive, given that a vacation home is a 'luxury' purchase — and if there's concern about the economy, luxury purchases tend to be the first to go. We're definitely seeing that softness in the upper end of the second home market, but the modest range is relatively robust. Buyers are certainly more conscious of value, and there's been a noiticeable shift from the upper to the mid market, but that's more an issue of caution than affordablity, per se.

The Escapes Section Loves Us - Today, Barryville

This has sure been the 'Year of Publicity' for Sullivan County. It seems every few weeks the Friday Escapes section of the NY Times has another article on some place or some thing in Sullivan. Today's Escapes section turns the spotlight on Barryville, featuring Mark Veeder and his partner, Michael Schroeder in an article, Rural Primer: First Fix Up the House and then the Nearby Town. This latest paean to the New Sullivan comes on the heels of articles on Callicoon, Narrowsburg, Livingston Manor, Roscoe and Sullivan's place among the "New Wave" of gay getaways. And of course, all the press surrounding the opening of Bethel Woods.

I believe that all of this very positive coverage has been instrumental in the relatively good performance of the second home real estate market here. Sure, sales are off from the peaks of last year (see my Current Market Conditions report). But they certainly haven't collapsed and sales prices have been holding pretty well.

Big Price Reduction Day

Chalk it up to the end of summer and the chill in the air hinting that winter is just around the corner. (Ok, not just around the corner, but at least in the next block!) I've been glued to the MLS feed all day, watching price reductions come through. There were 23 price reductions today, and that adds up to a total of 74 since Sept. 1st. A lot of the price cuts have been pretty dramatic — 10% or more.

The biggest action is at the upper end. A pretty fabulous renovated farmhouse on 10 acres with a pond in Tyler Hill, PA, dropped from $529,000 to $459,000 (original asking price was $579,900). Click Here to View Listing. (UPDATE on this Sept. 6 --- the $459K price only lasted a few hours. The price was increased this morning to $499,000, which is much more ho-hum.) A 'vacation chalet' style house on 39 acres with a pond and inground pool near Livingston Manor was just reduced from $524,000 to $469,000 (Original listing price $599,000). I'm pretty excited about these 2 particular moves, because both moved decisively under $500K. They're joining a third property, a lovely farmhouse on 26 acres near North Branch (Click Here to View Listing) recently reduced to $459,000, in firming up a market for great properties with some acreage, water and/or views in the mid $400's. These aren't Rockefeller estate-quality properties, but they can amply satisfy most country desires without a lot of compromise. A year ago, buyers who wanted this quality of setting had to push into the $500's.

While 3 properties do not make a market, these 3 are significant because they are setting a bar. Many other properties currently priced in the $500's or even low $600's are going to have to compete with them. These 3 are the lean, buffed players, and some of the other properties on the market are going to have to go on a diet if they want to make the team.

September Current Market Conditions Report Posted

Sullivan County real estate sales data for August, 2006 is in. I just posted by monthly "Current Market Conditions" report that slices and dices the data and mixes it in with my usual hefty dose of opinion. After you read it, please come back here and post your comments. I'm actually flummoxed this month by the data, and would appreciate any insights that readers of this blog can offer.  Thanks.

Does Sullivan County Really Need "Tiffany" Branding?

The first season of Bethel Woods is now over, and it was a great success. The big buzz was the opening night with the NY Philharmonic. As I wrote about before, the audience was almost collectively willing them to "Please Come Back" and make us your summer home. Somehow, if the NY Philharmonic gives Sullivan County its blessing, all of the rest of the long-awaited rejuvenation of the Catskills will magically fall into place. But the Philharmonic wasn't the biggest draw of the summer. That honor went to Crosby, Stills, Nash and Young, bringing 17,000 people to the fields of Bethel at a per head price up to $126!

Paralleling Bethel Woods success this summer have been the announcements of plans by Louis Capelli about the redevelopment of the Concord Hotel in Kiamesha Lake. The big buzz around Capelli's Concord vision isn't the 3,000 units of housing, but his desire to bring in Ritz Carlton as the nameplate on the centerpiece hotel.

Now I think having a Ritz Carlton in Sullivan County, just like having the NY Philharmonic make it summer home here, would be great. It would give Sullivan County two platinum brand names that would inevitably attract other investment and development. Developers of upscale shopping malls compete furiously to attract a few big brand names like Nordstrom and Tiffany, because once they're "in" the rest of the upscale retail pack falls in line. Ritz Carlton, the Philharmonic, Nordstrom and Tiffany are like an upscale "Good Housekeeping Seal of Approval."

Other potential hotel developers have also floated the Ritz Carlton and Four Seasons names. Andy Krieger's Livingston Manor spa hotel plan and the now defunct Campbell Inn project in Roscoe are two recent examples.

But does Sullivan County absolutely need these platinum nameplates to succeed? Ritz Carltons are overall great hotels, but tend to be a little stuffy and formal. Personally, they're not my favorites. There are a lot of hotel brands — like "W", Ian Schrager's hotels, and Kimpton's boutique hotels, like the Hotel Monaco — that are hipper and a lot more fun. And most of the celebrity magnet hotels in South Beach aren't affiliated with any national brand.

I'm not sure that having an outpost of Ian Schrager's trendy "Morgans Hotel Group", like the Mondrian or the Delano, is right for Sullivan County, either. One thing that I think makes Sullivan County special is our lack of snottiness and attitude, something that many trendy design hotels dish out in oversize portions. Having model-caliber staff dressed all in black with "Madonna" headsets isn't the right fit.

Here in Sullivan County, we need to think about a fresh recipe for success. Not the staid and stuffy faux formality of a Ritz Carlton, or the off-putting attitude of the Delano or Mondrian — both of which appeal to narrow markets that either have lots of money or can fit into a size 4. We need some hotels here that are nicely designed, even edgy, but are also welcoming and reasonably affordable. Hotels that are nice, but not so formal and unapproachable that full-timers here would feel uncomfortable celebrating a birthday or anniversary at the restaurant, or dropping in for a night of dancing in the nightclub.

If we keep waiting for the savior in the name of Ritz Carlton, we may be waiting a long time, and miss the mark. Possibly a lesser brand, like Wyndham, Crowne Plaza or Sheraton, while not as 'glamorous' might ultimately be more successful. After all, its going to be the local market that will keep the bars and restaurants busy in the dead of winter.

Bethel Woods kinda got it right. They offered a broad range of entertainment during the first season to gauge market appeal. Yes, the Philharmonic was a big draw, but so were many of the other acts. We want some 'culture' but we also want to get down and boogie.