Sullivan County Real Estate

The $250,000 Hot Spot

This weekend I had a client coming up to look in the $250,000 range for a second home getaway with a modest achieveable list of features --- house in good condition, some privacy, a nice setting. Their target area was the central west to northern part of Sullivan, west of Liberty to Callicoon, north to Livingston Manor and Roscoe. I identified 8 good candidates. Much to my surprise, when I called to set up appointments to show the houses, more than half of them had accepted offers on them. Wow! (Contracts hadn't been fully executed yet, which is why they were still showing as 'active' in the MLS.) 2 weeks ago I called for another client on many of these houses, and they were available.

This confirms what I've been sensing for a month now, that houses in the $225K to $275K range with attractive features are moving. 'Similar' houses priced under $200,000, while lower priced, often involve compromises --- like on a busier road, not particularly attractive location, needs work, more suburban style --- that second home buyers aren't willing to accept, and they aren't moving. Likewise, many houses priced above $300K, while actually offering a lot more house and features than their $250K counterparts, are also lagging. $250,000 right now seems to be the new sweet spot in the market, at least the second home sector.

JetBlue to Start Service at Stewart

Sullivan County's "local" airport is Stewart Airport in Newburgh. Stewart has had a lot of ups and downs over the past few years in expanding commercial air service, and until recently has just had a few regional jet flights to major hubs on American, Northwest and USAirways, plus a few flights a week to Florida on Allegiant Air.

Earlier this month, Atlanta-based AirTran, one of the most sought after low cost carriers, announced it would begin daily nonstop service to Orlando, Ft. Lauderdale and Tampa, as well as 2 daily flights to its hub in Atlanta starting Jan. 11th.

Today, JetBlue, the belle of the low cost carrier ball, chose Stewart as its next expansion airport, with daily flights to Orlando and Ft. Lauderdale starting Dec. 19th, with the addition of a nonstop flight to West Palm following in January.

This is big news in these parts. Of course, positioning Stewart as a more robust airport with stable air service is good for the Hudson Valley. But reliable and inexpensive service between Florida has an added benefit for Sullivan County and the Catskills region, as well. Sullivan County hosts a large population of 'reverse snowbirds' who summer here and winter in Florida, and convenient air service will only strengthen that connection. Maybe one of the flights can be nicknamed the 'Boca to Bethel Express'.

September National Sales Data Released

Its that time of the month again --- the National Association of Realtors' release of Existing Home Sales data for the previous month (September). Yes, sales and prices are down from their peaks, both regionally and nationally. Regionally in the northeast, the number of sales was off 13.4% from Sept. '05, and showed a drop of 3.7% from the previous month. The median sales price was down 5.1% from August, and 8.5% lower than the price peak in April, '06.

NAR also reported that the inventory of homes was also down 2.4% nationally slightly from the peak reached in August, marking the first month's drop since inventory began climbing last fall.

None of these numbers came as a surprise, and are in line with predictions of a settling and stabilizing market. The most interesting thing, though, is the media attention — or rather lack of it — throughout the day. Last month, the EHS data showed the first decline in housing prices since the run up, and the media went ballistic. This month's data, while still showing a decline, seems to be much less newsworthy.

When Price Reductions Aren't Enough

Hats off to all the listing agents who have been working hard to get their sellers to 'get real', and adjust asking prices into realistic ranges. What's happening, though, is that we're getting "listing  jams" at the big price break points, like $299,000, $399,000, $499,000, etc. There are 55 houses, for example, listed between $299,000 and $299,999.

Dropping your price below a main break point is certainly a good idea, as many people search on listings using the break points as qualifiers, e.g. show me all listings in Lumberland or Highland townships between $250,000 and $300,000. And some sellers I'm convinced think that solely dropping below a price break will get their house sold.

Not! First off, a house can still be overpriced relative to the market, even if it drops below one of those 'magic' numbers. But more importantly, price is not the only consideration among buyers (although it is an important one). I'm amazed at how many sellers aren't prepping their houses for sale --- sprucing them up, cutting the lawn, getting rid of clutter, painting the front door for heavens sake. Sellers need to think about their house like they'd go for a job interview. You wouldn't wear curlers and dirty jeans to a job interview (well, maybe some people would, but they probably won't get the job). Likewise, if a house comes across as the real estate equivilent of stretch pants and curlers, it isn't going to get a second chance.

Busy - Something I Haven't Been in a While

Sorry I haven't posted much in the last few days. I've been slammed-to-the-wall busy for the last week. Go figure. I've seen a big jump in people asking about properties, and this weekend --- for the first time in about 6 months --- I had a completely full schedule, with 4 appointments, and had to ask the other broker I work with, Judy Siegel, to go out with 2 others. Part of the upturn, for me, can be attributed to the new MLS Search capability on by website. A lot of people have been using it and asking about properties they're finding.

But there are definitely other factors besides that. I think that the upturn in the stock markets along with the sharp pullback in gas prices has revived a sense of economic optimism that is counterbalancing somewhat the barrage of media reports about the housing market pullback.

In the past few weeks I've been quite heartened by the discussions I've been having with buyers. Many are quite sophisticated and insightful about the real estate markets, particularly looking beyond the national doom and gloom reports, and understanding that real estate markets can be very local, with almost 'micro climate' dynamics. This week Moody's published a report that real estate price declines are expected in the next few years in 100 major markets, but then breaks those markets out. Our sympathies to homeowners in Cape Coral, Florida, topping the list with an anticipated 18.6% decline. New Yorkers fare much better, with just a 3.5% drop predicted between now and April, 2008.

After the annual double digit increases on the past few years, you might think that any decline would cause alarm and bring real estate sales to a screeching halt. But the Moody's report is actually good news, at least for New York City. The fear among buyers has been of a much greater fall off --- a 20% or more decline in prices. Nobody wants to be the last fool in to any market. The elephant in the room all through the summer has been this underlying fear, or at best, unease, that if you buy something today for $400,000, will it be worth only $300,000 next year?

It just doesn't seem to be playing out that way here. What I'm finding out lately is that one thing hasn't changed — young couples, in particular, want their own house! It doesn't look like there is any big collapse on the horizon for Manhattan real estate that will suddenly make a Chelsea coop affordable again, and those young couples want to have something to call their own. So the trend of 'continue renting in the city and buy upstate' is still strong.

The big difference between these buyers today, and the buyers in the market here in 2004 and 2005, is that these younger buyers are not primarily motivated by investment or appreciation, but rather by ownership. They want to put in the new kitchen they've dreamed of, and it's theirs, not the landlord's!

Overall, I think that market is Sullivan County's ace in the hole. We're affordable enough for young couples to buy a buy a nice getaway here for $250,000 to $350,000 and still afford to keep renting their apartment in the city.

Signs of a Market Pick Up?

Last week, the National Association of Realtors (NAR) released its Pending Home Sales Index for August. (The PHSI measures contracts signed during the month, compared with the monthly Housing Sales Report, that measures closed sales, and is considered a leading indicator of housing activity.) The August Pending Home Sales Index rose 4.3% nationally to 110.1 from 105.6 in July, but was still down 14.1% from August 2005. In the northeast, the August 95.4 number was up 3.6% over July, but 12.4% below August '05.

The uptick in August's PHSI over July is a good sign, that the housing markets are beginning to stabilize. I've definitely seen an upturn here, particularly in the moderately priced segments of the market. While I doubt we'll see market activity at the frenzied levels of 2005 for quite some time, there is definitely a more optimistic psychology returning.

Spec House Deals

During the height of the boom, a number of builder/investors put up 'spec' houses (houses without a specific buyer, but built for speculation.) A number of these spec houses are custom crafted with fine detailing, targeted at the upper end second home market. That end of the market here has slowed considerably, and many of these houses haven't sold. As a result, the builders have slashed prices and many of these houses are some of the best values on the market. The house pictured here, for example, sits on a very private 9 acres west of Roscoe and has 3,825 sq. ft. It was originally priced over $800,000 (which was way too optimistic, even for the boom market) and has now dropped to $499,000. Its an amazing amount of house for the money. Another great spec house deal is a 2,400 sq. ft. house built by Catskill Farms on 8.86 acres near Callicoon Center. Catskill Farms builds finely detailed reproduction farmhouses that are simply beautiful. The asking price on that one is down to $496,000. Click here to see more about both of these houses.

There are a half dozen other custom-quality spec houses in the county that are slowly working their way to 'great deal' status but aren't quite there yet. But overall, buyers in the $450K to $750K range who are looking for a custom crafted larger home may find find the best deal in one of these spec houses. They're definitely worth a look.

September Sullivan Sales Data Posted

It's that time of the month again, for my monthly Current Market Analysis with the latest Sullivan County real estate sales tally. Up, down or flat? Check it out then come back here and post any comments --- I'd love to hear your thoughts on what's happening to the market.