January Pick-Up?

Before I even type of the first word of this post, I'm girding to be drawn and quartered by the doomsayers who seem to flock here looking to squelch even the slightest hint of optimism. Sort of like the Dementors in the Harry Potter books, the prison guards of Azkaban who suck the happiness out of everyone.

I'm sensing a bit of a pick-up. In the past week or so, since Christmas, I've gotten a handful of calls and emails from folks I worked with last summer saying they'd like to start looking again. I've also gotten a number of calls or emails from new potential buyers, asking about properties and areas. I  had two appointments between Christmas and New Year, and already have three booked for January. Now, if you're a busy urban Realtor, you may think that number of appointments is really slow, but for here it's pretty good. And this is all before the NY Times Escapes article mention today.

Among the folks I'm talking to, there seem to be a few factors coming together to shift them back into serious looking mode. Lower mortgage rates certainly seem to be having a motivating effect. And there's a feeling that, with a price drop from our peak of 25% to 30%, we may not be quite at the bottom but we've already taken most of the fall.

In October and November, the widespread perception seemed to be that you'd be an idiot to even consider buying a house. Over the past few weeks I think there's been a subtle, but noticeable, attitude shift — that if one is in a position to buy, with either cash or good credit, you're in a position of strength and could cut a shrewd deal. At dinners and parties over the holidays, real estate again was a hot topic, with a number of folks particularly asking about good values.

The question always comes up "Is it a good time to buy?" That's tough to answer, because it depends on the individual's objectives. My response is that's it's never a good time to buy an overpriced house, but it probably a good time to cut a deal on a well priced one.

Comments

[krumley]

It's interesting that the writer of the NY Times article doesn't mention that the seller's total annual taxes for school and town are over $12,000.00!

That's a lot of money for Sullivan County.

Source of public record:

http://www.townsoft.com

Krumley

[Rod]

$12k for a million dollar house in Sullivan County is nothing. Should be closer to $40k if it was assessed properly (annual tax rate of 4% of value in Callicoon) - see Chapin Estate for examples.

Dave - I'm with you - the panic and fear is over and people are poking their heads up - so as long as the big negative news (more stock drops, etc...) stays to a minimum, people will become accustomed to the new reality of post-boom life and get on with their lives.

[bix]

I was intrigued by the 199K house in Livingston Manor that Randy Flourke talks about in his article. I thoroughly scoured the LM market last spring, and I saw absolutely nothing of interest in that price range. So I have to admit that I was a bit jealous seeing that 299K house reduced to 199K, which was smack in my price range.

So I looked up the house on his website and found that while it has a LM mailing address it is actually located 10 miles out of town, up in the Catskills park. Yet the Times reporter refers to it as being in LM, without mentioning how far out of town it is.

What really interested me were the comparables listed on the appraisal report on Randy's website. (Link removed by DK)
I can see now why some sellers are sticking with their high asking prices. For instance, I was amazed to see a house on the main road in Callicoon Center selling for 280K! It's a cute house, to be sure, but by today's standards the price is insane.

Randy's book seems interesting, though. Anyone familiar with it? I may order it.

[Tim]

With major banks, investment companies, car companies, and other entire industries in the crapper, just wait to see what happens...We're going to see '70's prices. Sad. Time to garden and preserve more...Time to pray, and love/protect family...

[Steve Wynn]

bix:

"What really interested me were the comparables listed on the appraisal report on Randy's website.

(Link removed by DK)

I can see now why some sellers are sticking with their high asking prices. For instance, I was amazed to see a house on the main road in Callicoon Center selling for 280K! It's a cute house, to be sure, but by today's standards the price is insane."
-------

Interesting that Mr. Florke puts an appraisal (like it was a selling point) from two years ago on his site.

At this point, it really means nothing - that was then and this is now.

Any bank would throw it out since it is now obsolete.

However, it only confirms that prices have been slashed across the board and that his appraisal of 300k from 1/2006 for a postwar cape cod on an acre is absurd.

His offering price is currently 199k and my bet is that it will sell in the second half of this year for between $150,000 to $165,000 - a little more than his original purchase price.

Anybody care to wager?

:-)

~ Steve Wynn

[Rod]

The days of throwing some paint around, putting in some shabby chic furniture and doubling the asking price are over. Buyers are smarter than that now. That LM house has been featured on his site for 16+ months, was big-time featured in Country Living a few months back, and now he has the Times working on it. That must be some sort of loser house. A pig with lipstick is still a pig.

[friday910]

from the NYTimes article!

"At the same time, Mr. Knudsen said, “many sellers are in la-la land,” unwilling to recognize how low buyers expect prices to go."

wow... for the last few months I was under the impression that David blamed everything and everyone else EXCEPT the la-la-land sellers. Things are definitely changing. Maybe now David can include the "La-la-land seller of the month" in his monthly report.

[bix]

"His offering price is currently 199k and my bet is that it will sell in the second half of this year for between $150,000 to $165,000 - a little more than his original purchase price."

Depends on whether he can get someone through the Times advertorial. Any buyer with half a brain would soon realize it is overpriced.

[David Knudsen]

friday910, maybe you should read what I write a little closer. I've actually used the "la-la land" phrase a number of times, and have written repeatedly that sellers' unrealistic price expectations are a real drag on the market. Things haven't changed at all in my mind; I've labeled unrealistic seller price expectations as a prime culprit for months. However, there isn't any single reason that can be 'blamed' for the current market situation.

[mal]

It amazes me to see continuing criticism of David for defending sellers. Here's a quote from one of his blog posts 2 years ago:
"The last 6 months of 2006 have been marked by uncertainty and caution on the buyer side, and continuing La-La land unreality on the seller side" (Dec 23, 2006). He has also written numerous times since then about the gap in expectations between buyers and sellers, pointing out that sellers have to recognize a new reality if they are serious about making a sale. On his main site, that sentiment has emerged repeatedly in his advice to buyers and sellers. David's post today is another example of David's continued willingness to share his insights. I could understand the antagonism if he had a record of deliberately misleading buyers — e.g., like NAR hack Lawrence Yun ( http://lawrenceyunwatch.blogspot.com/ ) — but David Knudsen has always been very open about his source of information, and always makes it clear if he is simply offering a realtor's hunch.

[JJ]

I took a look at the listings's on Randy's website. It would be helpful if there were more images of each listing to take a look at. All in all I found most of them really interesting and what I did see wet my whistle for taking a closer look.

[David Knudsen]

hi, mal, thanks for the defense. I really appreciate it, because I do try to be pretty upfront and balanced. I actually take quite a bit of flack from some Realtor colleagues, who would like me to be a little more 'upbeat'. (My 'economic Armageddon' quip from a few month's back just won't die.)

[David Knudsen]

I just pulled "Father Times" last comment that posted the sales from the last week of December with just 12 sales, and extrapolating from that small sample size to a sharply lower median and average going forward. I'm not trying to cover up or sugar coat anything, but drawing any conclusion from a small sample size can be misleading --- when the market is moving up or down. I can certainly appreciate the enthusiasm and effort to get out the latest data, but again, I'm a stickler for adequate sample sizes that can point to a trend.

[father]

Heck Dave, that ain't fair!

You're absoluetly right - a 180 day (or 120 day) moving average will give your readers a truer sense of market momentum due to a larger sampling over time - but why not let your readers have the weekly data too?

It is all factual data - just like prices on any financial website like seekingalpha or bloomberg.

The week ending January 2 2009 with a four day workweek yielded 11 sales with the average at:

$121,636.00

The median at:

$110,000.00

Let's see where we go from that median of 150k in the next few months.

~Father

[Rod]

Totally agree with Father. Facts are facts, and presently the facts suck. I'm surprised accurate, non-offensive info has been removed from this site - we've just been sold out to the NYTimes. Guess times are tough...

It would be one thing to subject the data to close scrutiny (such as one week between Christmas and New Years for upstate real estate will always be misleading), but to use MLS gestapo tactics to limit info - well, that's the job of the realtor - to hoard information, to create a situation where information sharing is limited creating an advantage for the one with the information.

Frankly, it's a bit shocking, having been reading this blog for 3-4 years.

Buyers beware - maybe the trend analysis should be left up to the buyer, not an interested party.

[Rod]

Buyers beware when information is being limited and parceled out unevenly. I've never seen a wholly accurate post removed from this blog before.

[mal]

Rod, Father T's 2nd post just proved David's point. The deleted post yielded an estimated median of $97,550 from 12 sales. The second post is for the most recent 11 of those original 12, and the estimated median rose to $110,000... a 13% change based on a single sale.

[Rod]

Mal - agree that conclusions are subjective for sure, but I think the readers who have had to wade through endless amateur macro-economic 'end of world' treatises on this blog over the past few months can take some micro 'facts' posted with a grain of salt. There is a real correction happening in Sullivan County, and just like in the financial markets, until potental buyers feel they have good and factual information, they will delay making decisions, investments or purchases.

Information and transparency are important in these times of fear.

[Father]

The deleted post had two vacant land sales that skewed the numbers lower so the second post with the weekly data is correct. Just homes.

Avg. - $121,636.00

Median - $110,000.00

The Father will post again in a week - maybe the prices will go higher!

We'll see.

Happy New Year Folks!

[Reg]

Yes, the Chicken Little commenter (and it's really just one or two people posting with different usernames every week) is not only annoying, but he defeats the purpose of his comments with his half-baked hectoring.

We get it. You think the sky is falling. Start your own blog and let some other people know.

[friday910]

David,

Nothing wrong with being balanced but being balanced is exactly the problem for a Buyer's Agent who is supposed to "get the best price and terms for a property" for the client.

Mal, relax... It is called a dialog... David is a big boy, and I'm pretty sure he can take care of himself, and if he doesn't want to continue the dialog he can say so.

Back to being balanced, "Man on Wire" is a great film. http://en.wikipedia.org/wiki/Man_on_Wire

Now for the riddle I asked a few weeks ago and not one person/realtor was able to answer it, considering that all of SC was recently re-assessed (so I was told by a realtor) ...

MLS 24134, the 9th house on David's current 11 Value Picks is:
$259K, 2400SF, 5 Acres, Built 2005 and Taxes are $6487

MLS 24743
$569K, 2000SF, 17.6 Acres, Buit 2005 and Taxes are $4800

Both houses are in 12719, about 3 miles apart.

Any reasons why 24743 pays significantly less taxes?

[David Knudsen]

Regarding "fair" or not, I've made my point repeatedly about small data sizes leading to incorrect trend assumptions. If someone posts single week sales, I'm taking them off. I don't think I've been covering up at all that sales prices have been trending down.

Clearly some of the folks posting on here are MLS members, and therefore Realtors or appraisers. So start your own website or blog if you want to post individual week sales data and get a discussion going about it. Also, none of the folks posting data are using their real names or email addresses, so there's no accountability.

When you talk about Bloomberg or other sites, their information is based on large market aggregates, not what a dozen barrels of oil traded at.

You're right, that I'm a big boy and can take care of myself. I've clearly stated that I don't want weekly data postings on here, and why. And if folks continue putting them on, I'll continue taking them off. It isn't gestato tactics, its the responsible use of statistics. If we were in a larger market area with 50 or 100 sales a week, I'd be much more open to having weekly sales data posted. But the weekly sample sizes are just too small.

Regarding the tax discrepency, I don't think anyone can give an answer. Both houses are in Highland township, which has been at the center of a heated controversy about assessment discrepencies, resulting in the removal of the township's tax assessor.

[~F.]

[REG]"Yes, the Chicken Little commenter (and it's really just one or two people posting with different usernames every week) is not only annoying, but he defeats the purpose of his comments with his half-baked hectoring.

We get it. You think the sky is falling. Start your own blog and let some other people know."

Posted by: Reg | January 02, 2009 at 10:17 PM
------------

Reg, those are the facts from the weekly data. I didn't make them up.

I would think that readers to Dave's blog - many who might be potential buyers - would want the true weekly closing sales to assist them in separating the {ahem} wheat from the chaff.

Sorry, I wish those numbers were higher too.

I also wish that the Dow was still over 13,000 - or was it 14,000!

Your comments imply a kind of censorship - or, at best, creative editing -kind of like saying that CNBC, The NY Times - or any news source - shouldn't mention to their readers that the DOW is now at 9,100 - or that the Case / Shiller Index has dropped.

Whether it be real estate or equities, I hope that this is still a free marketplace with open discourse.

And as long as one can back up that these numbers are facts - and not b.s. -they shouldn't be pulled or covered up.

And Reg, maybe you should take a gander at some financial blogs from time to time. Start with David Fry on seekingalpha.com, Barry Ritholtz or minyanville.com

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[Next]

Now for the riddle I asked a few weeks ago and not one person/realtor was able to answer it, considering that all of SC was recently re-assessed (so I was told by a realtor) ...

MLS 24134, the 9th house on David's current 11 Value Picks is:
$259K, 2400SF, 5 Acres, Built 2005 and Taxes are $6487

MLS 24743
$569K, 2000SF, 17.6 Acres, Buit 2005 and Taxes are $4800

Both houses are in 12719, about 3 miles apart.

Any reasons why 24743 pays significantly less taxes?

===========

I'll bite.

It's Highland.

There's really almost a two thousand dollar differential and the house with 17 acres pays lower taxes! How can that be?

;-)

Maybe one owner lives in the metro-NYC area and the other is local.

Maybe the former didn't 1) grieve their taxes, 2) didn't know to grieve them or 3) didn't care to grieve them.

Pick 'em.

~F.

[David Knudsen]

I am an ardent supporter of informed buyers. I'm more than happy to give any of my clients, who've retained me as their buyer agent, any information they want that I'm privvy to. If they want weekly sales figures, I'll give them to them, along with my commentary about what I think they mean and how they fit into the overall context — including longer term data trends and how they fit into the context of the type of home they're thinking of buying.

One thing I find so interesting here is that so many commenters haul out this banner about "protecting the buyer" and "making sure that the buyer has all the information they need", etc. etc. etc. — all of this is the name of the "buyer". But I don't see folks shouting that every buyer should only work with a buyer agent, or asking why there aren't more buyer agents in Sullivan County, or why your local real estate office doesn't offer exclusive buyer agency. Or pointing out the fact that an Exclusive Buyer Agent, like myself, never takes listings or represents sellers.

[Rod]

Posting weekly sales, asking prices vs. final sales numbers, and listing days on the market was probably the most useful info I've seen on this site. It was definitely more interesting then another link to a dire NYTimes biz story, a gas drilling video, or correcting Dave's grammer.

Interesting that weekly sales data is viewed as more hurtful than gas drilling hysteria.

[Rod]

Friday - all of Sullivan County has not been reassessed. It would be a great step forward if that happened, but it has not and will not (individual towns control the assessment process).

F. and David are both right about possible reasons for the tax discrepancy you comment on - besides a very arbitrary process in Highland (resulting the tax assessors removal) you really would need to see and understand the various attributes of each property- proximity to road, subdivability of property, terrain of the 17 acres, water/streams, if the owner is related to or good friends with the assessor, etc... Some of the reasons would be real, the others would be debatable, to be sure.

I wonder where David's logic will lead him, concerning the posting of weekly sales - is biweekly ok, once a month, once every two months, or only his determination that only 3 month data can fairly represent the sales trends of Sullivan County?

I'm dreaming now, because this would be great info -
1. Original asking price, Final sales price, and days on market for each sale.
2. Real estate company who sold the property.

All realtors have access to this info. I wonder why the public shouldn't. It wouldn't be hard to compile. Information is power.

[David Knudsen]

Hurtful has nothing to do with it. My position is that weekly sales data with small sample sizes can be misleading. I embraced the suggestion posted here recently that I augment my 3 month sample with monthly sales data to more finely hone any opinions about the movement of trends, and will start doing that regularly with the next market conditions report.

Some folks on here clearly have access to the same data I do. If it's something other folks really want to see on a weekly basis, set up another blog and post it and come back here and post a link to it so other people can find it. Bix found a site where you can set up a blog for free at proboards.com.

[Rod]

Does that mean the debate/conversation following the posting of such a link could happen on this useful site?

[Rod]

Does that mean the debate/conversation following the posting of such a link could happen on this useful site?

[Tom]

I was surprised that the Times completely omitted mention of gas drilling.