Current Market Report Posted with Sept. Sales Data

OK folks, the numbers are in and they're not bad. Sales for the 3 months ending Sept. 30th are running on par with 2006. Sales prices, though, took a dip, with the 1st year over year drop in the median sales price since I started collecting data in 2001. But all is not doom and gloom, though you'll have to read this month's Current Market Report to get the whole scoop.

But its important to remember that September's sales data reflects market activity mostly in June and July, before the tsunami of negative real estate news in August. Its been very slow since mid August, and only time will tell how that plays out in closed sales figures over the next couple of months.

Please check out this month's Market Report and then drop on back here and post your thoughts. Now more than ever I think its important to get as wide a variety of perspectives as possible, because its really tough to get a handle on which way the real estate market is moving.

Comments

[Tony Ritter]

DK:
"I think its important to get as wide a variety of perspectives as possible..."

======================

Well, for starters here's an article from today's Wall Street Journal entitled - "The Gofer Broker"!

Have a great weekend - I sure hope to - after I detail three of my client's cars, mow their lawn and then drive their parakeet down to the city for his bi-annual eye examination.

:-)

Sincerely,
Tony Ritter
Narrowsburg, NY

Online at:

http://online.wsj.com/public/article/SB119154635202949703-I9kzZTEbO3BMoPJwiCAdv4OA1DI_20071103.html?mod=tff_main_tff_top

The Gofer Broker

In the soft market, clients are asking Realtors to perform menial, sometimes humiliating tasks. June Fletcher on scooping, painting, vacuuming and drawing the line.

By JUNE FLETCHER

October 5, 2007; Page W1

Jonathan Marks makes his living as a real-estate agent. Lately, he's been babysitting rats...{balance of article snipped for brevity}

[David Knudsen]

Tony, thanks for the article link. I think some of it comes down to context and, well, common politeness. I do a lot, as do you, Tony, that's related to the sale, more than just showing the house and writing up a purchase offer. I arrange septic pumpings and am present for septic inspections. I arrange meetings with contractors to give repair estimates. I've picked up radon test canisters when the home inspector can't get back to the house for a few days and sent them in. I've shoveled walks so a buyer can get into the house in winter and even shocked a few wells.

I think it comes down to whether you're being taken advantage of, or feel you're being taken for granted by, the client. In the case of the dog doo-doo in the bedroom, if I was showing a house and noticed that a dog had relieved himself, I'd just pick it up and flush it down the toilet, just assuming that it happened after the owner had left. But if the owner of the house called me and said, "Oh, Gigi pooped in the bedroom. I just wanted to call you and tell you so you could pick it up when you got there," I'd be furious. Because the owner knew about it and left it there for me to deal with.

Particularly in a second home market, we often deal with buyers and sellers who aren't local. There's a transition period for new owners when they don't have their resources in place. So for a few weeks, if they need to have someone go hang out and wait for the satellite dish installer on a weekday, I'm happyn to go do it. Likewise, if a client gets stuck and some alarm goes off at the house and they can't rouse a neighbor, I'll run over.

But I think the Journal article points at a much bigger issue --- namely, that there are WAY too many real estate salespeople. There are over 400 members of the Sullivan County Multiple Listing Service, in a market that had 980 total MLS-listed sales over the past 12 months, in all categories --- residential, land, multi-family and commercial. That comes out to less than 2.5 transactions per member. With those kind of numbers, there are some salespeople who would pick your child up from their ballet lesson to keep you happy and keep the listing. But they may not be the best at selling your house.

[John M]

Last year it was granite counter-tops thrown into the deal. This year it's blame the realtor b/c the granite doesn't work anymore.
When it sinks into the frontal cortex of the brain (decision making center) that price appreciation was in fact a BUBBLE (like tech stocks) due to easy money from overseas, will a seller actually sell. You have to be a price leader in this market, not a follower. Just like trying to sell a used car.

[D]

Before I bought a second home up here two years ago, I never had occasion to pay attention to the real estate world outside the very different coop and condo market in Manhattan. Up here, I've noticed the phenomenon of houses being shuffled from one real estate broker to another to another as they remain unsold. For a while there will be a Freda sign and then after nines months a McKean sign and then after another year an Eagle Valley sign. What's the thinking here? Is it the brokers who give up on the house or sellers who give up on the brokers? I would think that all the well-established brokerage firms in a given area are pretty much fungible. Given internet access to individual broker web sites and MLS listings, it doesn't seem likely that any particular brokerage firm can obtain uniquely greater exposure for the house; the available inventory is easily determined by anyone who spends an hour at the computer keyboard. So what reason is there to believe that a house that has been sitting on the market for a long time is more likely to be sold if the listing broker is changed?

[Chuck]

David - concerning sales at Chapin, Highlands and Bethel Farms, I'll wait until I see it in the recorded deed transfers before I believe. Kenoza Lake has seen some real activity, and construction is/has/will be starting on 3 new homes.

If the Chapin/Highlands/Bethel Farms sales are valid, a lot of credit has to be given to the extensive and creative advertising programs they have in place. They all are spending a lot of money in the City, and really pounding the pavement. This is in marked contrast to 2002/2003 when all Chapin had to do was open the gate and people were flooding in and buying. Chapin, in particular has a very nice campaign going - much better than the scary carved bears that they used for the past few years.

What's great about these big projects and their big marketing budgets is that it helps us all as it raises the profile of Sullivan County.

[David Knudsen]

D. that's a good observation about listings moving from one broker to another. The issues rests mostly with the sellers. I've seen again and again that a broker takes a listing that's clearly overpriced. It doesn't cost much to take and carry a listing. The broker has likely recommended a lower price, or some intermediate price adjustments, as well as possibly some steps the owner can take to make the house more saleable. But a lot of sellers are stubborn and think they know best, refuse to lower their price (or make repairs) and then blame the broker for the house not selling. So they move it to another broker, but in the same condition and at the same price.

I don't agree that there's little difference between brokers. Some do have better marketing, whether its a better streetfront presence, take more appealing photos and write better descriptions, or post on the internet more widely than other brokerages. And then within individual brokerages, there are good and well, not so good, agents. A good agent should know, or find out, who are the 6 or 8 other agents in the county who regularly sell that type of property and would be most likely to have a customer for it. Then pick up the phone and call them. For example, I don't do multi-family or comercial, so I wouldn't be useful to call me about a new commercial listing. But I do a lot of upper end second home and lakefront sales and have a reputation for that, so it would definitely be worth a call to me to clue me in on a new listing. You have no idea how few agents do that. In my experience, most agents just put the listing in the MLS (often with lousy photos and descriptions) and somehow expect the house to magically sell itself.

[Chuck]

DK - to keep things fun in these turbulent times, you should have a contest for 'most overpriced listing' each week.

[JB]

Chuck - Regarding Chapin. My wife and I noticed 4 houses in a row on Swinging Bridge that broke ground within the past two months. Seems they were all waiting for the water to return. Granted, these are owners that can be considered "committed", but they could have tried selling if they didn't want to build. My point being that Chapin sales and building slowed significantly because of the reservoir situation. Now that it's resolved, I would expect activity to pick up again. David has pointed out that little has happened on Swinging Bridge (both sides) in the past few months. I would say the water was gone for 2.5 years and only came back in August. Give it some time and the buyers will return. Second home lakefront buyers tend to be a bit insulated from market volatility. But they're not interested in buying into a headache when what they want is an oasis. No wonder sales disappeared.

[Ira]

Thank you very much for the analysis you do each month. I find it very enlightening. I am in the market but not in NY yet. I am trying to buy something in Colorado which is where my son lives, so far without much success. I wish someone would take the time there to analyse the market there the way you do here. It would make my quest easier (It is a quest). If I don't find anything there by the end of the year I will be in touch with you.

[Steve]

I'm a current seller. We've put a ton of work into our 1840's farmhouse in town. It's about 85% remodeled with only the kitchen to go (which I confess knowledge that it can be a deal breaker). I have to say that it's not just the sellers who have unreasonable expectations. Our broker stated that our house is worth $330K. I never thought it was worth $330, I thought maybe $280. Well, we've had a few offers. They were around $240. Apparently, that's where the market believes our house is and is probably in line with a normal rate of appreciation from where we bought it. Am I willing to sell for less than $330? Yes, but unlike Manhattan real estate, people upstate now like to use the asking price as a point of negotiation, not a point of asking. If that's what people do, then that's what you've gotta do. It takes a village...

[Chuck]

JB - have you noticed the four spec homes that have been on the market for over a year at Chapin? Or the land sales that have plummetted from over 40 a year to maybe 4?

[JB]

yes i have chuck. thanks for your concern. the water was gone for 2.5 years. would you buy a lakefront home or a home with access to a lake (at full price) when in fact no lake exists? i know that i wouldn't. so while price and general housing market weakness may be factors in the "plummet" you reference, i would put forth that no lake was also a factor and a large one at that.

[Chuck]

JB - Just for clarification - how many of the homes that have been on the market for over a year were on the water-less lake?

Maybe it's just a bad business model badly executed.