July Current Market Conditions Report Posted with June Data

My latest "Current Market Conditions" report is now up, with Sullivan sales data through June. The overall picture is showing improvement — the number of single family sales, closed sales price and the "bid/ask" ratio — are all up in June over May. Check out the latest report and then drop on back here and leave your comments about what you think is happening in the market.

Comments

[Carl Icahn]

"This is the worst time to buy and the worst time to sell"

[Reg]

Yes, well, a quote needs attribution, since apparently the previous commenter is citing someone with a clue about what he's talking about.

Thanks David for the thoroughgoing commentary--it's always really illuminating to read what you have to say.

[ctop]

what would we do without you mr knudsen? nice work.

[Ghost of Housing and Land Boom]

Hello? Hello?
Where's all the big commentators?
Did everyone fall off the earth now that the housing bubble popped?
Brace yourselves friends, Steep downward rollacoaster ride ahead for the next few years. A Doom and Gloom realestate market has yet to set in and it doesn't smell too good.

[JM]

They have all gone away in search for more oil.

[dora]

John Templeton of the Templeton Fund fame, died, leaving us with this principle -

"Invest at points of maximum pessimism."

[ap]

Dora,

A house is a home, not an investment. That observation is now mocked. Sullivan County will suffer a decline that may even impress you. Take your choice: you are either naive or ignorant. Very few here are old enough to remember the 1973-74 meltdown when our economic environment was markedly better than now.

At the present time we are in the perfect economic storm: everything that can go wrong is happening. Give it three years.

David means well, but, positive sentiment will NOT prevail over the next reality decline.

[David Knudsen]

I just can't seem to win. "David means well" kind of sounds like, "He's an out of touch, doddering old fool, but he's pleasant and agreeable. Don't drool, dear." Everybody seems to have an axe to grind with me lately. Some sellers (and their listing agent representatives) get pissed at me because I straightfowardly say their houses are overpriced — and not just by a few thousand dollars, but by lots of thousands of dollars. Some readers of this blog lash out whenever I (or anyone else) finds some positive signs in the market. Some buyers get irritated because the price for the house they want to buy hasn't dropped to price they think it should. The teacher of a negotiation course I took a while back said that, as a negotiator, if all the parties are somewhat unhappy with you, you're probably doing your job pretty well.

[JM]

I don't think people have an 'ax to grind' against you David. You do a great deed. But I do think many buyers have an ax to grind against seller agents. Many of these are the ones who are oblivious and unaware to the long downturn times of the 1970's and the last big boom/bust of the 80's. The coming storm is like nothing this country has seen since 3-4 generations ago. We're still at the top and as fast as buyers want the trough to come, it will be a few years away. Patience for those who can wait and buy when there is blood in the streets (ie, 8% unemployment, raging inflation, 1990 sytle riots in brooklyn and LA, oil at above 200pb, owners walking away from apartment buildings in bronx and brooklyn, etc).

Aside from the ridiculous thinking that this is a temporary downturn and bottom will be sooner than later, some seller agents are still hanging on the casino card as a selling. Some talk about the 'hamptons of the north'. Many try to persuade that land is being gobbled up and there will be none left.

The best is yet to come!

[Captain Video]

JM writes:
"(ie, 8% unemployment, raging inflation, 1990 sytle riots in brooklyn and LA, oil at above 200pb, owners walking away from apartment buildings in bronx and brooklyn, etc)." [and]
"Many try to persuade that land is being gobbled up and there will be none left."

===================
Dave,
Didn't you just buy in da Bronx?

As far as land - take a look!

videos...

http://www.youtube.com/watch?v=gpkgJlx2r_I

http://www.youtube.com/watch?v=QefLQKLb5co&feature=related

http://www.youtube.com/watch?v=0Cj92H5aQTU

http://www.youtube.com/watch?v=PNagpWtKIvY&NR=1

[scott]

No doubt your job is harder than a sales agents, since you actually want your client to make a good choice, whereas a sales agent - representing the seller- just wants a sale. keep up the good work - I'm sure there is some pressure to just play along. Great time to buy if you've done your homework.

[David Knudsen]

I appreciate the supportive comments. In fairness, seller's agents are in a real tough position. I probably talk with a dozen listing agents a week about prices on listings. Often they relate that they're recommending price adjustments to sellers, but the sellers just aren't listening. Ultimately their responsibility is to their principal, the seller, and they have to promote and support the seller's position and price. Its kind of like being a spokesperson for the tobacco industry. Its almost surreal and Kafka-esque at times.

I also don't agree that seller agents only want to make a sale. Most of them want their customers - the buyer - to be happy and satisfied.

[cfranch]

I day trade for a living and look at stock charts all day long. The stock market is headed lower, far lower than where it is now. I cannot see how the real estate market in the NY metro and vacation home area is not affected. The stock market will not bottom without an extreme reading in sentiment i.e. everyone is bearish. also we need the failure of a major bank or two. Citigroup and Washington Mutual look to be the likely candidates here. There is not enough pessimism out there yet. We will get there but government bailouts only prolong the situation. Fannie Mae and Freddie Mac also look like toast. the feds will have to take over both institutions and by doing so will double our national debt to 10 trillion dollars. That in turn will drive up interest rates. Falling home prices and rising mortgage rates are a toxic brew that will only depress housing further. i currently own no real estate and will consider buying when i read headlines stating "real estate is the worst investment possible".

[Mary Ellen]

Everybody,

As a seller who was (knowingly)asking waayyyyy to much for my property, I have this to say; there are property owners like me out there who will sell their property for a high enough price. If they can't get that price, then they'd rather hold on to the property. So, the asking price is not really the value of the property, it's just the price at which the seller feels it's worth it to sell. I think most owners know when they're asking a high price, but many times you're just testing the waters.

Now, about this gas boom...hmmmm.

[bloomberg]

Mary Ellen offers the following thoughts:

"As a seller who was (knowingly)asking waayyyyy to much for my property 1, I have this to say; there are property owners like me out there who will sell their property for a high enough price 2. If they can't get that price, then they'd rather hold on to the property 3. So, the asking price is not really the value of the property, it's just the price at which the seller feels it's worth it to sell 4. I think most owners know when they're asking a high price, but many times you're just testing the waters 5.

Now, about this gas boom...hmmmm 6.
==================
Footnotes:
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5.
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[Ghost of Housing and Land Boom]

Mary Ellen, some true facts:

There are property owners like you who are asking for the stars to get the moon ( Not happening, finished, game over, lottery is bankrupt).
If you don't get your price then it will marinate for a long time and become a stagnant listing like thousands out there now.

You say: " So, the asking price is not really the value of the property, it's just the price at which the seller feels it's worth it to sell." Duh! If its not the value of the property then what is it? Is it picking numbers out of a hat? Ever hear of COMPS?

You say: "I think most owners know when they're asking a high price, but many times you're just testing the waters."
Naaaaa, you really think most owners are asking a high price in this reccession we are in? I thought it was b/c dumb money chasing smart money stopped and reality is hitting hard. And what waters are you testing? Selling now at fair market price or drown later.

Oh and after the gas companies have finished destroying and contaminating your land maybe you can then get a few pennies on the dollar when you go to sell it.
Now, about this gas boom...hmmmm.

[cp]

As far as land - take a look!

videos...

http://www.youtube.com/watch?v=gpkgJlx2r_I

http://www.youtube.com/watch?v=QefLQKLb5co&feature=related

http://www.youtube.com/watch?v=0Cj92H5aQTU

http://www.youtube.com/watch?v=PNagpWtKIvY&NR=1

[Mary Ellen]

I think you people are funny.

I keep trying to find a motivation for the pettiness and pomposity in these posts. Are you all Manhattanites living in 10 x 10 apartments who are eaten up with jealousy, or did you pass up a good house deal 3 years ago? What is it, really. Tell us.

Here, let me make you happy...the entire Catskill mountain range will blow up a year from now. Feel better?

[JM]

Mary Ellen and those akin to you in lala land,
This may shock and awe you, lol

04/08 $ 78,000 SCHEIBE RD
Liberty Buyer: Deda, Elez Acres: 42.63
Parcel ID: 25.-1-9
School Dist: Liberty
Assessment: 143900
Class : Vacant Land
Seller: Chapman, Susanna

03/08 $ 350,000 BAILEY LAKE RD
Monticello Buyer: Kutsher, Milton Acres: 339.9
Parcel ID: 9-1-7
School Dist: Monticello
Assessment: 638600
Class : Vacant Land
Seller: Bresler, Jonathan

www.rgemonitor.com

[JM]

The Manhattanites are selling out of the catskills by droves, especially in the hunter mountain, roxbury, bovina, margaretville area.
Little did they realize that their rents would go through the roof and gas cost 6k per year to come up every other weekend.
"Well dear, lets sell the chalet!"

"profits are privatized (Fannie Mae shareholders) and losses are socialized (taxpayer)" yet the catskills will defy gravity..... yea right!!

[Mary Ellen]

Dearest Darling JM,

We have to stop meeting like this.

Not everyone is dying to unload their property. If you can't get a decent price, just hang onto it. You make it sound like it's all life or death, when either option can be just fine. Either you have some cash, or you have a country house. Where's the down side? (I'm not so naive that I can't see the dilemmna of people in a financial bind who may need to sell their second homes in a terrible market.)

PS -I live on the Barnett shale in Texas. They've been drilling all around my town for years now, and (on the surface) it's not that bad, after the initial well is in. The drilling has generated millions of unexpected dollars for many homeowners and businesses down here.

This is a residential area, and there are wells on as little as 1 acre of land. The jury is still out on the chemicals that are used underground, and that will take careful consideration in Sullivan, but it is not devastating property values at all. It is causing realtors all kinds of headaches in separating surface sales with mineral sales, but it has been a positive force in personal finances. The sign-on bonuses are sometimes over 10,000 per acre, and can go much higher.

DFW airport has wells all over it, and the airport rakes in millions per year in royalties. Gas money is paying for all the terminal remodels and updates that will take place next year.

David, this blog is better than 'The Daily Show' for entertainment. (People are so peevish!) Thank you for having it, and for all your hard work with the 'monthlies.'

[JM]

That model will not work for NY... they wont even allow windmills 10 miles off the LI coast here!!
We won't just have oil wells all over front yards like gnomes.
Texas has a sandy easy-draining soil everywhere and plenty of oil. The Catskills is a giant sedimentary rock at the tail end of this shale; drainage is terrible and any chemical will find its way to shallow well water, streams, lakes and reservoirs. The environmental impact would be immense and make land very very cheap like it is in Texas once the oil/gas is drilled out.

[helmut]

Ja.

Do remember dose fluds o' yestiryeah und ter Delavare...04, 05 und 06.

River vent oop to tirty tree foot!

Dose holding pits with heeefty pags dat you zee en der viteo vill nut holt da vaste.

...helmut

[Mary Ellen]

The Catskills will be quite another place in 3 to 5 years. I believe it will take 10 years to come to complete fruition, but the puzzle pieces of prosperity are falling into place, one by one. The buzz of '05 is just a small part of the area's slowly gathering momentum. Bethel Woods, the new 'Entertainment City,' even smaller news, such as Greenwich Villages' famous 'Bitter End' club moving to Monticello, the revitalization of Livingston Manor, the gas drilling. All of these bits, along with the media's unintentional PR in magazines and newspapers, is constantly keeping Sullivan alive in the news. Every year I see it; more shops, more restaurants, more renovated farmhouses. It could be tough for the schools and infrastructure to keep up, but I see new jobs and housing demands in the very near future. As a marketing professional, it appears as if a 6-year publicity campaign has been carefully orchestrated to raise SC's profile. The challenge will be to keep the rural flavor and the natural beauty of the land intact, and judging from local officials, they'll fight to keep the area beautiful. In spite of some blips on the screen, it's all good.

[Bix]

I'm in essentially the situation described in your report, as the appraisal came in supporting the price but the bank wants a comparable within six months. My appraisal had none.

Can this kill the deal? I assume the appraiser would have produced a recent comp if one existed. What does an appraiser do in this situation?

[nick r]

David, great job as always. I have been noticing ads for Catskills land for sale, large parcels, that say "development rights have been sold", meaning the nyc watershed has paid the landowner to forfeit his rights to subdivide or ever sell as a subdivide to anyone else. Some of these parcels are 100 to 300 and more acres that when sold can have only one house built and usually in one small 10 or 20 acre area of the property, that the nyc watershed designates. Wow, they win, yes? It's just brilliant, pay the big landowner and he gets to keep his land or sell it at a huge profit to some millionaire down the road if he chooses and no developers have a chance.

Have you seen this in Sullivan and what effect is this having on land prices and house prices at every level? I imagine the nyc watershed has unlimited cash resources and will buy everything they can. In one sense a 300 acre parcel might be cheaper because it now has no subdivision potential and on the other hand there are many more rich people than rich developers so if there are only single home huge lots left then the prices will go way up as inventory goes way down.