A Second Home, A Starter Budget in Today's Times

Thanks, Crosby, for posting this as a comment on another post. I thought it interesting enough to feature as a top level post. In today's NY Times, there's an article, A Second Home, A Starter Budget, about an NYC couple who bought a little house on 8 acres near Sparrowbush (in NW Orange County) last September, and have been working through the winter to bring it back.

A big thumbs up to the new owners, Christina Selway and John Moskowitz, for doing a stunning job bringing this house back on a very tight budget. I'd swung by this house early last summer to take a peek, just after it came on the market. It was pretty much a wreck, albeit a kinda cute wreck with great potential. (The listing agent remarks even said "In need of repair or demolition.") Clearly these buyers saw the potential, because they jumped on it almost immediately. This house was 'gone' only a couple of weeks after it was listed, and sold for 95% of asking price.

They got a great deal. And had enough experience looking at houses to know it when they saw it. But when you look at the photos in the article, keep in mind that these are the "after" photos, and bear almost no resemblence to the "before". The "after" photos are the function of good taste and the result of lots of sweat and elbow grease. That's the recipe that brought about the first generation of farmhouse and cottage renovations here, in the 1990's.

So how much equity did they likely create from their sweat? The house is a 700 sq. ft., 2 bedroom, 1 bath cottage on 8 acres with a barn, nice quiet setting. Traditional small farmhouse style, with relatively low ceiling heights. If they put the house on the market today, I'd venture it would probably fetch in the range of $150,000 to $165,000, not a bad return on the $105,000 they have into it.

Unfortunately, there aren't a lot of these 'diamonds in the rough' available. But they to occasionally pop up, and when they do, buyers have to jump on them. There was an adorable little classic cape that came on the market near Callicoon Center recently for $129K. My colleague, Kathy Rieser, was on it like a fly on a cow pie when as soon as it was listed, and both of us showed it to a number of potential buyers. A few of them liked it, but none believed us when we said we thought it would go very quickly. Lo and behold, just like that house in Sparrowbush, there was an accepted offer within a couple of weeks.

One important lesson is that if you want to nab a deal, you've got to devote time and energy to the process. The buyers of the Sparrowbush home said in the article they saw 30 houses over a 4 month period. They likely did drive bys on a lot more. They probably spent a few hours a week scouring internet listing sites and Craigslist, and also had one or more Realtors set up auto-notification MLS searches for them. And that perseverence paid off.

Comments

[DN]

I know some people cringe when they see words like "cute", "adorable", or "quaint", when it comes to second homes, but the appearance of a cottage is so important. I'm not saying that buyers ignore the investment and budget implications of a second home, but many of them will consider the "consumption" aspect of a second home in addition to the hard calculations of buying vs. renting. Personally, I've not bought in the Catskills because such quaint properties are tough to find compared with other areas such as those in Connecticut or east of the Hudson River. Of course, the much higher prices in those areas reflect the more attractive housing stock.

[b.]

For your viewing pleasure - an interesting photo essay about the current real estate market from tomorrow's Sunday New York Times Magazine at:

http://www.nytimes.com/slideshow/2009/07/05/magazine/20090705-gilded-slideshow_index.html

B.

[Nick]

That NYT link, though morbid and in the usual vein for our friend B, is in fact utterly fascinating to look at. Thanks for posting, though the gloom and doom element is getting old there's still the odd gem in your barrage of negativity. :)

To keep with the NYT theme though, here's yet another interesting story:
http://www.nytimes.com/2009/07/05/realestate/05cov.html?hpw

They've been flogging the second-home-for-people-with-modest-budgets story hard lately and that's yet another interesting one. Examples here in the Hudson Valley (Kingston specifically) but the Catskills get their shout out too. The theme of people priced out of the NYC market buying in the country seems to be evergreen.

As for the house in the first link David posted that's a great story too. It should be noted that Sparrowbush is quite small and not what most people would think of when they think "country living" since it's pretty dense and mostly very small houses like this one, and it's basically a part of Port Jervis (if Port Jervis is a "city" then this is a "suburb") and a bit off the axis of the more rural stuff. But still, the article does say they have 8 acres. I would make a strong guess knowing Sparrowbush that it's very long narrow lot running up to a ridgeline with close neighbords, since Sparrowbush is perched on a steep hill. But that's a wild guess.

But the common theme seems to be that more and more NYC weekenders, from the lower budget but young/hipster group, are finding the area. That's an encouraging sign, it's a vastly different group than the typical budget constrained family weekend buyers (ie the Smallwood crowd). Nothing wrong with any group of course, but the former seem more likely to lead to more demand for quaint restaurants and cool little downtowns and all that stuff they (umm... I guess I mean "we") seem to gravitate towards. If word is out that you can get a nice little getaway for less than a Brooklyn studio apartment that WILL matter. Slowly but eventually.

- N

And PS: As an aside for those not familiar with Sparrowbush it's home to one of the best little finds I've found in the entire area -- Tunney's light shop. If you need lighting fixtures you should definitely look up Tunney. The guy is a total wizard. He restored some ancient fixtures we found in our barn from pile of rust to spectacular antique for a ludicrously small amount of money, and he also has a lot of stuff he sells out of his store too. Worth knowing about if you ever think you'll need a light fixture for a fix up project. Beautiful historic stuff, or take him your beat-up finds to have them brought to glory for almost nothing. But I digress.

[Nest Dweller]

As an FYI, the owners have apparently made the place available for rent... http://www.redcottageinc.com/redcottageinc/rentals/Pages/fox.html

[J]

Red Cottage has some really charming rentals (Note to Dave: turn those rentals into listings!)

[Jennifer Grimes]

Thanks Nest Dweller for mentioning that uber-fab Fox Ridge Cottage in Sparrowbush is for rent. How very observant of you! There is a large, quiet, swimmable, fishable pond that that property has shared use of as well, making it a perfect summer getaway. My Catskills rental company, Red Cottage Inc., features over 20 select, really terrific properties. http://www.RedCottageInc.com

[Bix]

I'd be curious to see the listing for that Callicoon Center property you mention.