Sullivan County Real Estate

The Drive By First Trip

Lots of folks I've been talking to lately are just starting out shopping for a second home, and few have much knowledge of Sullivan County (or the other Catskills counties for that matter). Their wish lists are often diffuse or not really defined beyond minimum numbers of bedrooms and possibly a price range — which is both a blessing and a curse. A blessing because a long and detailed wish list can be difficult to meet, but a curse because a blank canvas opens up a huge number of possibilities. Its kind of like going to Macy's and saying, "I need a new wardrobe."

Helping clients narrow down choices and get to the essence of what they'd like is something I do very well. But it can be very time consuming, particularly because Sullivan County is so large and I can only show only a limited number of houses on a single 4 hour appointment. (I'm hesitant to have longer appointments, because in my experience, when you get up to 5 or 6 hours the houses all start merging into mush in the buyer's mind, and folks start to get a little grumpy even with granola bars.)

It can take two or three trips to hone in on the type of home, setting or location someone would like — lake community, wooded privacy, rolling farmland, area of the county, size and style of house. I do a lot of 180 degree turns with clients as they begin bringing lifestyle into the picture. Then once they have a better definition of what they'd like and where they'd like it, they want to see everything on the market that comes close, which can be another couple of trips.

Its an important process, but not necessarily a very efficient once. The initial stages, in particular, involve a lot of wheel spinning as buyers start to understand the differences between, say, Woodbourne and Narrowsburg, or the tradeoffs in various settings for privacy and seclusion versus convenience to town, the difference between rolling open farmland and more wooded settings or busier roads versus country backroads.

Recently I've had three potential clients who wanted to spend a first trip up just doing drive bys of houses to get a feel for the area and the settings of various houses. It was a great idea. They emailed me listings they'd found on internet searches. I gave them my comments on the ones they found, and suggested some others they might want to include to give them a broader range of examples to consider. Each couple ended up with a list of 15 to 20 houses. I provided them with addresses and directions and suggested a route. They came up and spent the whole day driving around.  Afterwards, they called to talk about the houses,  what they learned, what they liked and what they didn't.  All of them commented on what a great day they'd had, how much information they'd gleaned and how it helped them understand the market better.

In one case, the couple decided that Sullivan wasn't really for them. Another couple narrowed the list of 15 to 20 houses down to 5 they wanted to see on another trip. The third couple (who had very specific setting desires) actually narrowed it down to one.

For the two clients I'll continue working with, I got huge amounts of information from their feedback. Based upon their choices, I can make much more intelligent suggestions of other houses they may want to consider.

From my standpoint, of course, it was a very efficient use of my resources, because I didn't spend a lot of time and gas taking people to places they ultimately wouldn't like. But what was somewhat surprising is how all 3 commented on how much they liked the process. They were on their own schedule, could pace themselves, stop for lunch when they wanted and make detours. One couple noted roads they particularly liked, and took digi-pics of a few houses that really caught their fancy (even though they weren't on the market.)

For first-timers not familiar with Sullivan, a drive-by tour can be a great information gatherer. But its not an approach for everyone. There are some folks I talk with that I know the best first trip is to arrange a "tasting flight", showing 4 or 5 very different houses in their price range to get their reaction to the various factors and trade offs. For others who have a very specific idea in mind, it can be most useful to sample 4 or 5 of the best options within their category.

But for a lot of folks new to Sullivan County, a drive-by day can be a great introduction.

Hghland Townhip-wide Reassessment: My Thoughts

I've gotten about a dozen emails and phone calls from homeonwers in Highland Township freaked out about the property valuation reassessments they received recently from the Highland tax assessor. Some have seen dramatic jumps in their assessments; I've heard through the grapevine that some owners have seen their assessments more than double, while others have seen more modest hikes.

Most people I talk with are under the mis-impression that, say, a 50% hike in their assessment will translate directly to a 50% hike in their property taxes. But that isn't how the system works. Townships are supposed to periodically review all the properties in the township and adjust assessments to bring them to market value (or some agreed upon percentage of market value). That's just what Highland has done. Without a periodic township-wide reassessment, some properties have assessments that remain well below their market value, while other properties (particularly new construction) are assessed closer to market value and bear an unfair tax burden.

When the tax grievance process is complete (sometime this month), the assessor will have a final tax roll. That's the total of the assessed property in that township. Let's say, for the purposes of argument, that prior to the reassessment the total tax roll in Highland Township was $50 million and after the reassessment it is $100 million. That doesn't mean that taxes will double because the township then takes its total expenses and divides that by the tax roll to get the tax levy — effectively the tax rate. So if the township expenses were $1 million and the tax roll was $50 million, the levy rate was 2%. Now, with the tax roll doubling, that same $1 million budget would result in a levy rate of 1%. There are also other entities (county and schools) that rely on the assessment to levy taxes and there are complicated formulas to adjust for percentage of fair market value, so when a township reassesses and the total assessment say, doubles, there isn't necessarily a doubling of the school tax for owners in that township.

A reassessment will result in increased taxes for some, but not necesssarily all, homeowners, and will create some hardship. I've often thought that there should be some system where homeowners on fixed incomes or otherwise unable to pay a higher tax bill should be able to have a lien placed on their house for a portion of their taxes so when they sell their house (and benefit from the appreciation that resulted in those higher taxes) the township can get paid, but the homeowner can remain in the house.

A question I get often from buyers is whether the assessment on a house they're buying will rise to market value upon sale. The general answer to that is 'no', for reasons that are related to the principal in New York that houses that are comparable in a township must be assessed equally. But I do warn them that if a house has a particularly low assessment (and low tax bill), they should be prepared over time for the property taxes to rise into a normalized range, which for most townships in Sullivan County is about 1.8% to 2.2% of the property's actual market value. (The big exception to this is the Village of Liberty, with a much higher effective tax rate.) If you have an effective tax rate of 1% of market value, you should probably expect your taxes to rise, and if you have a much higher rate than that range, you could possibly have grounds for a grievance.

In many ways, doing a township-wide reassessment is a good thing to do. It brings fairness to the system. But its also excruciating, and not perfect. It will likely take a year or two for values to really equalize. The grievance process is particularly important to the assessors, because it provides them with a lot of information that, along with additional sales, helkps them fine tune the assessments. It is far from an easy process, and doesn't win the assessors any new friends. But ultimately its critical to insuring the fairness of the system.

Comments About Specific Properties

Over the past few months, some visitors to this blog have posted comments about specific properties, often negative, usually about the value or lack thereof. I've removed those posts. Its not because I'm a rah-rah Realtor who only wants nice things said about properties and wants to censor anything negative. Ultimately, I'm responsible for this blog, and negative comments about specific listings puts me in a difficult position.

Sullivan County is a small community. Realtors here generally have good relationships with each other. Clients who've worked with Realtors in other areas often comment on how well we seem to get along. The cut throat backstabbing that you hear about in other areas is very rare here.

Sure, the Realtor Code of Ethics prohibits making false or misleading statements about our competitors. Of course, many of us have opinions about different agents, but we don't do much badmouthing in public. By tradition, that sort of extends to trashing or flaming listings. The Code of Ethics doesn't really deal with that specifically, so I could probably get away with flaming individual listings on this website, but it just feels tawdry and a little uncouth. Even if I'm not the author of the comment, by providing a forum for that, its kind of the same thing.

I do personally believe, however, that consumers do want a way to get more opinions on properties on the market apart from the often-rosy descriptions posted by listing agents. Real estate, as marketed through multiple listing systems, remains one of the only large consumer purchase categories without a feedback loop or independent reviews. The information model is hierarchical, moving in one direction, from the seller/listing agent (who's job is to position a property in the most favorable light possible) out to the consumer, with little or no opportunity for a consumer to provide feedback on the property. A feedback loop is common in many consumer purchase systems, like product reviews on Amazon, movie ratings on Netflix or hotel reviews on Tripadvisor. Other categories, like mutual funds or automobiles, may not feature consumer reviews but do offer independent expert reviews or ratings that are helpful to consumers when shopping.

I'm a strong advocate of opening up the listing system to include some sort of review feedback loop. Its a hot topic in real estate circles. Redfin, an innovative and somewhat controversial agency primarily on the west coast, hired independent reviewers to review new listings and post them on a blog system tied into the MLS Search on their website. They were a little ahead of the game, and got into hot water with the Northwest MLS, who said that the reviews violated MLS rules. Faced with losing their MLS affiliation, they pulled the review site down.

I do think its coming. Consumers want it, and competition from non-MLS real estate marketing sites like Trulia will increase the pressure for the Realtor-owned MLSs to include it. But I'm not ready to go there right yet, and want to keep good relations with my colleagues here. So, for the time being, I'd appreciate it if visitors would refrain from making specific comments on specific listings. Thanks.

April Sullivan Sales Data Posted

Hey, everybody, my May Current Market Conditions Report is posted. Things are starting to look up. There were 36 closed single family sales in the Sullivan MLS in April, compared to a devastating 23 in March. Sales and prices both continue down from a year earlier, but remember that early to mid 2007 was the peak of the market. The median sales price for the 3 months ending April 30th, at $150,000, is statistically equal to March's $150,750, and the average actually moved slightly upwards to $207,657. Buyer interest was up in April (I had a full appointment schedule most April weekends, and yes, actually made some deals.)

I'm almost hesitant, though, to post anything here that the picture may be getting brighter, only to be slammed, beaten and clawed by the sky-is-falling pessimists. Maybe that should be a new blogging sport, "Extreme Pessimism". But I'm calling it as I'm seeing it, and right now it sure looks better than it did in January.