Sullivan County Real Estate

10 Best Deals of 2009

It's the last day of 2009, and it's a year that many in the real estate business will want to forget. As we headed into the year most of us battened down the hatches for a very rough ride. Much to my surprise, I ended up having a far better year than I expected, largely by shifting focus to "great deal" properties. Luckily, not all buyers disappeared this year. There has been a steady stream of buyers on the hunt for a great deal, and as I've discussed many times on this blog, those are the properties that have largely been selling.

While sellers may have been losers in 2009, many buyers have, in my opinion, been big winners. A lot of buyers have succeeded in sweeping up houses at jaw dropping prices. Over the last few weeks, I've been casually asking other agents about what they thought were the best deals of the year. I also spent a few hours scrolling through all the closed single family sales in the Sullivan MLS for the year to refresh my memory. I ended up with a list of abut 40 properties that got my "Wow, what a deal!" juices flowing. Admittedly, my approach is neither scientific nor impartial because I'm selecting from areas I'm most familiar with, as well as properties that have appeal in my core second home market.

Then I set out to whittle that group of 40 down to 10 Best Deals. It was not an easy task. There were 4 or 5 that were no brainers — a log house on 94 acres in Fallsburg township, originally on the market for $769,000 and selling for $400,000 earned my top "Oh my God, what a deal" spot. My next 4, in no particular order, were a cute new construction repro farmhouse on 2.5 acres in Bethel, originally listed at $289,000 that sold for $155,000; a seasonal lakefront cottage on Division Pond at Wolf Lake for $220,000 (originally $345,000); a very privately set 6 bedroom lakefront house on 5 acres on Edgewood Lake in the Beaverkill Valley that sold for $360,000 (originally $819,000 when first listed in 2006); and a 3,300 sq. ft. non-lakefront house in Chapin Estates that went for $450,000 (originally listed in 2008 for $819,000.)

Rounding out my top ten was a tougher call, and I had to do some tough triage. But my final 5 include a 5 bedroom house on 19 acres up at Lew Beach that sold for $460,000 (originally listed over $800,000), and three bank-owned foreclosures — one on Baxter Mountain Road north of Roscoe that sold for $98,900, a log home on Decker Road near Glen Spey for $165,360, and a vinyl sided ranch outside of Jeffersonville on 5 acres outside of Jeffersonville for $70,000.

Click here to see the listings from the MLS for my top 10. Note that the "original asking prices" shown in these listings are the origional asking prices for the last listing for that property, and a number of these had earlier listings with higher asking prices. (In my comments above, I included the original asking prices from previous listings when I was able to find that information.)

I'm sure folks have other ideas about the houses that should have made my top 10. As I mentioned, I started out with close to 40 — and anything in my bigger group was a pretty darn good deal, but for one reason or another, I thought these 10 rose to the level of "spectacular deals."

And now, signing off at the end of 2009, I'd like to wish everyone a very, very Happy New Year!

800 Pound Gorilla Weighs in on Gas Drilling

On Tuesday, the New York City DEP (Department of Environmental Protection), the city agency responsible for the New York City watersheds and water supply, came out firmly against gas drilling and sent a letter to the state Dept. of Environmental Conservation calling on the state to withdraw the draft regulations under review to approve drilling. (NY Times article.) The city couldn't be more unequivocal in its opposition, and its position is quite damning for gas drilling for two reasons.

First, the city's opposition is based on an extensive study by independent consultants commissioned by the city that studied the geological science related to gas drilling. It's not  environmental emotionalism that has charged much of the debate. Second, New York City has political clout that outweighs any other party weighing in on the issue.

Of course, New York City is primarily concerned with the Catskill watershed, an area covering approximately 1,500 square miles in Sullivan, Delaware and Ulster counties. The watershed has been defined loosely as any land upon which water that falls will ultimately flow into one of the New York City reservoirs, which is why the watershed has such an irregular boundary. There are instances where property on one side of a hill is in the watershed and property on the other side isn't because groundwater on that side flows into a different creek and river system.

The interesting thing about gas drilling related to the watershed is that the traditional groundwater run off definition of the watershed may not apply, because the hydrofracking required for gas drilling occurs thousands of feet below the surface. The city's study points out that fracking chemicals can travel along fissures underground. The study also notes the potential damage to the water transport infrastructure, those huge tunnels located outside of the watershed per se that carry the water from the Catskills to the city.

Notably, the city's response apparently did not just request a drilling exclusion for the watershed with possibly an expansion of the geographic defintion of the watershed. They asked that the draft environmental impact statement be pulled entirely! You may want to check out the NYC DEP site, where there is a release about their comments as well as the supporting documents they sent to the state.

No to Little Snow Here

In a strange twist, upstate here in Sullivan County we got almost no snow in yesterday's big storm. Only about one fresh inch fell at my house overnight.

Today's Less Than Flattering NY Times Article

This morning, I've received a number of emails about an article in today's NY Times, Few Laughs Left in a Catskill Town Struggling to Survive. The article focuses on Monticello, the county seat of Sullivan County, and doesn't include any notable surprises or misrepresentations. Monticello has been a basket case in decline for years. I was chatting about the sad state of Monticello with a few colleagues a week or two ago, and I described it as "Kind of a rural Newark without the vision or leadership of Cory Booker."

But I caution readers of the Times' article to not paint the whole county with Monticello's brush. Large swaths of the central to eastern parts of Sullivan, the parts of the county that largely comprised the "old" Catskills that had their last heydey more than a generation ago, have fallen on hard times. The tattered remnants of old hotels and bungalow colonies dot the landscape. Once vibrant villages and hamlets like South Fallsburg, Woodbourne and Monticello are run down and depressing.

That isn't the whole picture of Sullivan County. The western and northern parts of Sullivan, which have grown more popular with a newer, younger generation of city escapees, are very different than the central and eastern parts of the county. That's a distinction that is sometimes hard to convey to new buyers just starting to explore Sullivan. They find really inexpensive places for sale online located in those eastern areas, and think they've found a bargain nirvana.

Of course, the more rural western and northern parts of the county aren't insulated from the economic decline in other parts of the county, and agriculture — a mainstay of the rural areas — is having a tough time largely because of depressed milk prices and little help from a state government that can't seem to find two nickels to rub together because dysfunctional politicians are more interested in squabbles than solutions.

Sellers, Pay Attention to the Co-Broke!

When listing their home for sale, the only commission number sellers typically pay attention to is the "gross commission" charged by the listing agent. One broker may charge a little more, another a little less, and that gross commission number can become a huge factor in who a seller lists with.

But there's another number on the listing agreement that is equally, if not more, important — the "co-broke" commission (or portion of the gross commission) that the listing broker will offer to another cooperating broker who brings the eventual buyer. Many brokers, as a matter of course, routinely offer a 50/50 commission split with cooperating brokers. But quite a few don't, only offering a smaller fraction (sometimes a third or even just a quarter) of the gross commission to a cooperating broker.

As a seller, should this matter to you? Absolutely. It is more likely that the buyer for your house will come through a cooperating broker, not your listing broker. In fact, of the 400 single family sales handled through the Sullivan Multiple Listing Service, 58% were sold by a brokerage other than the listing broker! (Note: that isn't another agent in the same company, but an entirely different brokerage altogether.) At higher price points, the percentage climbs even higher. For all sales closed above $200,000, 65% were sold thorugh a cooperating brokerage, and above $300,000 the number jumps to 78%!

If a seller presses a listing agent on why they aren't offering an equal commission split, they're likely to get a laundry list of reasons. They need to keep a bigger share of the commission because of the costly marketing and adverting they're going to put behind your property. But unless they're doing some special niche marketing, say advertising a horse property in horse magazines, or an estate in the NY Times, that argument is weak. Other agents, myself included, also invest in marketing and advertising to attract buyers.

Frankly, given the data, the lion's share of your commission dollars should be targeted at motivating cooperating brokers to short list, show and sell your house. I would even go so far to venture that, particularly for higher priced properties, a strategy to generate interest among an appropriate group of cooperating agents can be more important than slick advertising. But for more listing agents, marketing a property to other agents and brokers is sort of an afterthought.

As a seller, when you go to list your property, be sure to discuss the entire commission picture, not just the gross commission. Because that co-broke number can be particularly important in motivating the person who is most likely going to find your buyer.

Lakefronts Under $400K

One of the most frequent requests I get is for moderate priced lakefront houses, from the mid $200's to the mid $300's. That's been a tough range to hit, but some recent price reductions have brought some attractive options either within that range or striking distance of it.

The little cottage pictured at left, on Wolf Lake, is one of my favorites, with an asking price of $369,500. (This is a short sale, so any sales price is subject to lender approval.) More information on this house, as well as a second home on the northern end of Yankee, can be found in this link from the Greater Hudson MLS. (Use the property arrows at the top of the page to switch between the two listings.)

There are 6 under $400,000 lakefronts listed in the Sullivan MLS that have caught my eye as well. MLS 25304 is a nicely renovated 2 bedroom lakefront ranch on Swinging Bridge that was just dropped to $299,000. A direct lakefront house on a motorboat lake that doesn't need any work starts to look pretty appealing under $300,000. Another favorite in this group is MLS 25702 on Yankee Lake (non-motorboat), listed now at $339,000. The first floor has been extensively renovated and updated, with a new kitchen and bath. The second floor bedroom level has a quirky layout and can use some reconfiguring, but with the second floor reworked this would be a great lake getaway on our largest non-motorboat lake.

Current Market Conditions Posted with November Sales

Well, folks, I'm more on time this month with my monthly Current Market Conditions report. Chalk it up to a slow start to December and a slushy snowstorm today that kept me inside.

So what have we got? Almost a mirror of last month, in terms of number of sales, prices, bid/ask ratios and bank-owned as a percentage of total sales. The one change is that the overall market basket of asking prices has started to come down, with the median asking price dropping below $200,000 for the first time since March.

Drop over to the main site and read this month's Market Conditions Report and come on back and post your thoughts on the blog. As always, I expect there will be quite a lively debate on here.

Thoughts on Monday's Economic Development Forum

I was invited to participate, along with about 130 others, in an all day Economic Development Forum for Sullivan County to come up with ideas to get the Sullivan economy moving again. The Forum was put together by the county planning department and was held at Bethel Woods.

The structure of the day would be familiar to anyone who's attended a corporate brainstorming retreat. We were divided into 9 small groups, each given an area of the county (the county was broken into 4 broad areas --- River Corridor, Infrastructure Corridor, Agricultural and Natural Assets) and an economic sphere to focus on. I was in a group looking at "Goods and Services" in two areas, Agricultural and Natural Assets areas. In 4 break out sessions we drilled down from strengths and assets through obstacles to opportunities and recommendations. At the end of the day, each group contributed a key recommendation to the summary, to arrive at 9 key economic recommendations (with an add'l 18 secondary recommendations.)

The 9 recommendations were all reasonable and mostly predictable, but in my opinion, lacking any big vision that could turn this ship around. Two groups put forth expanding broadband and cellular communication, another called for agricultural processing facilities for dairy and meat to support local agriculture and there were one or two versions of "improve coordination between agencies" and "market the county."

Strikingly absent was anything related to gas drilling, which, from an economic development standpoint is the big elephant in the room. The economic stimulus opportunity of gas drilling — from workforce housing to training to technical support facilities — dwarfs anything else discussed at the forum. Yet not one recommendation related to gas drilling made it through to the 27 summary recommendations. Regardless of your position on gas drilling — and I'm personally more con than pro — it needs to be part of any discussion of economic opportunities for this county. In my group, when we were making an inventory of assets  in the areas we were tasked with, I put up "Proximity to the Millennium pipeline", but there was no pickup to carry that through to opportunities and recommendations.

The other thing I found very interesting was that a number of groups listed "high taxes" as a major obstacle to economic development. Yet there wasn't one call for government consolidation as a partial solution to higher taxes. In my group, there were 5 current or former local politicians, and when I suggested government consolidation as a recommendation to address the high tax problem, it was met with a universal chorus of "Can't Be Done". I was hoping that there would be some support for the idea, even if footnoted with "It will take a lot of political will, but is something that needs to be seriously addressed."

Finally, if gas drilling was the big elephant in the room, the little elephant was leadership, or more specifically, lack of it. Sullivan County just doesn't have strong leaders with vision and the political will to carry the ball over the goal line.The blame for that doesn't necessarily rest with our politicians, it rests with us. Among the 130 "movers and shakers" gathered at Bethel Woods were dozens of competing visions and agendas. We end up with lowest common denominator leadership because in the end, irregardless of Monday's attempt to gel feel good unity about Sullivan's future, there isn't that much we all agree on. Which is how my group ended up with "improved broadband and cellular coverage" as our number one recommendation (which is something everyone can get behind) rather than "Develop a comprehensive plan to locate gas drilling infrastructure services in Sullivan County."

Mortgage Rates Set Record Low

The AP reported this morning (article on Yahoo News) that the average rate on 30 year confirming fixed rate loans fell to 4.71%, the lowest level since Freddie Mac started tracking the data in 1971. (Actual rate quotes tend to be a bit higher than the Freddie Mac averages, and I've never quite understood why, but most lenders I looked at this morning were sub-5%.)

This is good news for buyers, as their carrying costs for a house are lower. And the low rates also encourage homeowners to refinance higher rate loans, but they have more of a problem as the house has to appraise under current market conditions.