Sullivan County Real Estate

Lakefront Interest Rises with Thermometer

Inquiries this week from potential buyers has been almost all focussed on lakefront. It certainly has to be related to the early onset of summer we've all experienced for the last week. When the thermometer passes 90, the idea of jumping into a cool mountain lake sure has a lot of appeal. Many cool lake-dippers, sweltering in the Manhattan heat, don't have a good grasp of the cost of owning your own lakefront getaway a few hours from Manhattan. I have a page on my website specifically dealing with lakefront (Click here). The bottom line is that a modest lakefront getaway on a quarter acre lakefront lot (with 70 or 80 frontage feet on a lake) starts  around $350K to $400K, and an Adirondack-style getaway with that "On Golden Pond" setting and privacy can easily run over $1M. If your budget is under $300K, a good option is a house that isn't lakefront but has lake rights within a short distance. Think of it kind of like wanting to have a place in Chelsea or the Lower East Side, but not having the budget for it, so you go up to Hudson Heights or Inwood. You're still in Manhattan. Likewise, a house with lake rights is a great option doesn't quite reach to lakefront --- and you're just a short walk from that cool mountain lake dip.

Speaking of that dip, the lakes up here have actually warmed up very early. I was hanging out with some friends at Crystal Lake a couple of days ago, and everybody except me went swimming. (I'm a native Floridian, and have a much higher threshold for 'swimmable' --- I seldom dip more than my toe until the 4th of July.)

Sullivan Bucks National, Regional Real Estate Price Slide

Last Friday, the National Association of Realtors published its monthly Existing Home Sales statistics for April. The somewhat glum picture, showing a 10.7% decline in year over year sales and a 0.8% drop in median sales prices, was widely reported in the media and supported the general perception that we're in the midst of a real estate slowdown. In the northeast region, sales were down 8.8% year over year, as well as month to month from March to April, and prices were down 0.6% year over year.
Sales here in Sullivan County, though, paint a slightly different picture. Yes, sales for the 3 month period ending April 30th are down 20%. (If you follow my monthly Market Conditions reports, you know I use a rolling 3 month sample, rather than single month data, because of the relatively small number of sales here, to provide more statistically accurate trend data.)  But prices here are not down, with April's $195,000 median sales price up 18% from the $165,000 median a year earlier. However, as I've pointed out in my Current Market Conditions reports for the past few months, the rate of increase has slowed, and the median sales price has been moving in a very narrow range between $190,000 and $198,000 since the beginning of the year. The significant fact, though, is that while the rate of price appreciation has moderated, we have not experienced a price downtown.
I'm still a week out from reporting May's data, but a preliminary look at the data indicates that price performance will remain strong. Right now, I'm showing the median sales price running at $198,000, and depending on the sales closed this week, we could hit the $200,000 median sales price mark for the first time.

The Million Plus Lakefront Market

For the past few years, the 'sweet spot' of the lakefront home market has ranged between $450,000 and $650,000. Cozy, comfortable 3 or 4 bedroom houses on a range of lakes fell into this range. Occasionally there was a sale pushing up against the $1 million, generally for a somewhat larger house with a more private lakefront setting. But we never quite breached the one million point.
Then the Chapin Estate came on the scene, where lakefront lots have fetched upwards of $900,000, and buyers there built more larger and more spectacular homes, many with 5,000 or more square feet and equipped with every imaginable upscale amenity. A new category was born here - the trophy lakefront home. Chapin's success has had a spillover effect, with owners of properties with dramatic settings on other lakes taking the plunge to build, expand or renovate lake homes in very upscale styles. A handful of those houses are coming on to the resale market, at prices upwards of $1 million.
4 are on the market right now. MLS 20176 is a stunning Adirondack Lodge style home in Black Lake Estates on its own 15 acre peninsula between Clear Lake and Clear Lake North (asking price $1.3M). MLS 19089 is in the Chapin Estate, also lodge style, on Swinging Bridge Reservoir (asking price $1.6M). MLS 19651 is a charming, older lake getaway in a private, wildlife preserve setting (asking price $1.4M). And MLS 19586 is a 5,500 sq. ft. done in a more modern style. Perched at the southern end of Tennanah Lake, this house has one of the most dramatic lake views you'll find anywhere.
These homes, each in their own way, are quite spectacular, and a dramatic step above what's traditionally been available here in lakefront property. Its going to be very interesting to gauge buyer response to these homes over the next few months, the peak lakefront selling season here. - to see if we do, in fact, firm up a $1M+ lakefront market.
Click here to see these 4 houses.

The Changing Profile of Emerald Green

Emerald Green is a relatively large (by Sullivan standards) lake community in Rock Hill that was developed starting in the late 1970's. The first houses built there were primarily modest 'vacation style' - A-frames and vacation chalets. But over 30 years, the style shifted to more 'primary style' houses, including ranches, bi-levels and 2 story colonials, that shifted the feel to more 'suburban' than 'mountain getaway'. That more suburban aesthetic, including paved streets and street lights, seemed to limit the appeal of Emerald Green among the newer crop of younger, second home buyers — and Emerald Green could be a tough sell, even though the community is very well kept with great recreational amenities, including a swimming pool, tennis courts, community beach, clubhouse, and sport courts.

This year I'm noticing that younger second home buyers, often with young children, who would have bypassed Emerald Green in the past are giving the community a second look. In fact, right now I have 2 clients, both couples in their 30's with young children, pursuing purchases there. I hear from other brokers who do a lot of work in Emerald Green that they, too, are seeing younger buyers.

One reason is the relative value of Emerald Green. You can find a non-lakefront house there with 3 bedrooms, 2 baths in good condition for under $250,000 to $300,000 - something that's very difficult in other lake communities like Wolf Lake or Lake Devenoge that have a more 'mountain lake' feel. Emerald Green also has a good selection of houses available for sale, something in short supply in many other lake areas. Another real draw is that, due to the size of the community, there is a greater likelihood that children will find compatible playmates.

There's a somewhat predictable turnover cycle on second homes. Families often buy them when they have young children, and then look to sell them when they near retirement or the children are grown. The other cycle apparent in Emerald Green is snowbirds buying a house in their early retirement years, particularly to spend time in the summer with their grandchildren, and many of those owners are now in their later retirement years with older granschildren. In both scanraios, the cycle can be 15, 20 or 25 years, and many of the houses in Emerald Green are now reaching that turnover point. The result could be a dramatic downward shift in the age profile at Emerald Green.

Chilling Development in Seattle Area MLS Dispute with Redfin

The internet has dramatically changed the business of real estate brokerage, and ushered in a host of new business models around the country. Some of those business models have pushed the envelope and, not surprisingly, resulted in major clashes between "old" and "new" approaches. This is particularly true in the sphere of the Multiple Listing Services, where new technologies and business models are challenging long held beliefs about who owns the data, what information can be displayed to consumers, and where and how it can be displayed. For those of you reading this who aren't Realtors, a little intro will help you better understand this arguably esoteric post.

MLSs are typically owned and run by local Boards of Realtors, or regional associations of those boards. Only Realtors can post listings to the MLSs and have full access to the data. (Although appraisers and other professionals involved in real estate who have a business need for the data can be affiliate members.)  You must be a Realtor (which means a member of the National Association of Realtors, and not just a licensed real estate broker or salesperson) to participate. Local MLSs set their own policies regarding data ownership and display within broad guidelines of the National Association of Realtors, but there are wide variations among boards. That's why, when you're searching for a house on a website of a member of the Atlanta Board of Realtors, listings may be displayed with property addresses (which that Board permits), while when you search on my website for properties in Sullivan County, addresses are not displayed (our board does not permit the consumer display of property addresses.)

One of the biggest battlegrounds I see over the next few years is control of the flow of information. Traditionally, Realtors have controlled the flow of information. The listing agent decides how the property is described, with an information flow from one,the listing agent, to the many - other cooperating brokers and consumers. There is no feedback loop, for other brokers and  consumers to comment on the listing.  For example, a listing broker may put in the remarks field of a listing, "Charming, cozy farmhouse in the country, needs some updating" Sounds great, right? But it may have 6 1/2 foot ceilings, be located just off Route 17 with lots of road noise, and have evidence of foundation damage and wood rot. But most MLSs  prohibit any adjustment in listing data on a website by another agent, for example by adding another comment line.

That's the preamble to help you understand the Seattle dispute, which has wide reaching implications. Redfin Real Estate is a Seattle-based online brokerage that's technologically very savvy (and also has a business model that rebates part of the sales commission to buyers). Redfin is an active member of the Northwest Multiple Listing Service, and displays the MLS data on its website, similar to how I offer the Sullivan MLS on mine. Redfin knew it couldn't adjust the listing data on its site per the MLS rules. So Redfin set up a blog-type site, Sweet Digs, and hired reviewers to go out, visit properties for sale, and write reviews. I thought the idea was brilliant. The Northwest MLS did not. The NWMLS ruled that Redfin's "reviews violated its regulations  against advertising other brokers' listings" and a policy against commingling listing information with other  non-MLS information on a Web site.

The NWMLS fined Redfin $50,000 and threatened to terminate its access to MLS data. Redfin capitulated and pulled the reviews from its Sweet Digs sites. Redfin is appealing.

The ruling is chilling in its impact, and I believe very shortsighted. In every other major purchase area, consumers have become used to access to unbiased information to help them make a purchase decision. When you buy a car, you don't just go to a manufacturer's website and read their hype, but you go to Cars.com, Edmunds and Consumer Reports to read their reviews from both experts and consumers. When planning a trip, consumers go to Tripadvisor.com and other similar sites to read what other travelers have to say about a hotel, resort or cruise line before plunking down their money. But for a single family home purchase, which is likely the largest and most significant purchase of all, we only have the equivilient of "manufacturers'" information.

Buyer representation offsets listing agent bias somewhat, but on a one on one, property by property case, working with individual clients.

I don't want to imply here that listing agents are deceptive or underhanded. The vast majority are not. Conscious deception is surprisingly rare. But the job of the listing agent is to position a property in the most attractive light possible, to generate calls and showings. While they are obligated to provide accurate objective data on a property, e.g. acreage, property taxes, square footage, etc., they aren't obligated to provide a comprehensive  subjective picture.

One of the huge inefficiencies of this business is how much time agents spend showing property relative to each actual sale.  One reason is all the time wasted showing frogs that are positioned on the internet as princes. Property reviews, by reviewers independent of the listing agent, would be a huge step to helping buyers narrow in on the properties that really fit what they're looking for, and reduce all this wasted time and energy showing frogs.

I think listing agents are concerned that if the process is "opened up", their clients — sellers — will freak out about any negative comments about their houses, pull the listing and go the FSBO (For Sale By Owner) route, posting their property on websites where they can better control the information. Personally, I think that would be fabulous — that if your property is in the MLS, it is open to comment and review. That could position the MLSs as the gold standard of accurate, unbiased information for consumers, and marginalize FSBO sites little more than biased, seller-paid hype. Let's start rating houses, for quality, value, design and condition. Sellers will hate it (at least those who don't get 4 or 5 stars), but consumers will love it!
 

Record Residential Sale - $2.7M

This week, a single family home at the Chapin Estate sold for $2,775,000, which may be a record for a single family home sale for Sullivan County. The 6,000 sq. ft. lakefront house on Toronto Reservoir definitely fits into the 'trophy property' category, with one of the most spectacular settings on Toronto Reservoir --- over 1,000 feet of lake frontage at the end of a point. The home was listed for $3.7M.

April Sullivan Sales Data Posted

Hey, everybody. My monthly Current Market Analysis for the Sullivan County real estate market is now posted. Please check it out and then drop back here to add your comments about what you're seeing here. Thanks.