Sullivan County Real Estate

This Blog and Gas Drilling

Recently a lot of folks have been sending me links to articles about gas drilling and hydrofracking, requesting that I post them on my blog. There have also been a number of commenters who've also been posting article and video links, along with their own commentary. Those comments often have the thrust of "after reading this article (or watching this video), why would anyone consider buying in Sullivan County (or even the more general 'upstate'?" When I haven't posted those comments through, I'm getting follow up comments or emails about engaging in a Realtor coverup.

I've been pretty upfront about gas drilling on this blog, and posted quite a few items about it. I don't believe any other Realtor blog or website in Sullivan County addresses it. I've posted about regulatory and legislative milestones, linked to the key drilling opposition websites and to key media resources, including the recent premiere of Gasland on HBO. But I'm quite determined that this blog not become a drilling blog — there are plenty of other places on the web where that topic is primary.

One of the problems we face at the moment in Sullivan County is that the media coverage of drilling and the Marcellus leaves the impression that Sullivan is one single, big undifferentiated risk area, a pre-Chernobyl landscape poised on the edge of environmental Armageddon. If gas drilling comes to Sullivan County — and that's still an open question — drilling will likely have a much greater impact on some areas of the county than others. There are some areas that will likely experience very little impact.

How Are Buyers Setting Price Expectations?

Sellers are often dragged over the coals for holding to unrealistic asking prices that bear little or no relation to market realities. But there's a growing lack of realistic price expectations on the buyer side. I get more and more calls and emails from buyers asking about property with price expectations that also have little relationship to market realities. My first thought is that those price expectations are being formed through internet home shopping, where potential buyers are finding the lowest prices houses in any category and setting their expectations based on that. That's long been the Achilles heel of online property shopping.

But that doesn't even seem to be holding true. For example, if you do a search on my MLS property search for farmhouses on 2 or more acres, which might be a common search for a city buyer looking for a country charmer, only 3 pop up under $150,000 (and those all have some significant drawback in terms of condition or location.) Yet buyers from the city looking for that cute country getaway on a couple of acres today typically are giving me a budget range of $125,000 to $150,000 tops. (The realistic starting point for something that they actually might like is $200,000 to $225,000.) Similarly, buyers looking for a lakefront house with a minimum of 3 bedrooms, good condition and good lakefront, often have a price target in the low $200's. (The start point for that is about $300,000, more for better lakes and more privacy.) I've gotten a few calls asking about lakefront cottages under $100,000.

I'm always curious as to where these price expectations come from. Sometimes they're based on a few properties they found online, with some misunderstanding of property characteristics (like "lake rights" not the same as "lakefront"). But often it's a number pulled off the shelf, footnoted with comments like "It's just a second home we're going to use part time, so that's what we're looking to spend," or "With the market down (or with all the foreclosures), we think we can get what we're looking for at that price." (Note: there are very few foreclosures on houses with appeal to the second home market.)

I'm not talking here about buyers being at the low end of a realistic negotiating range, but rather being way out of range for what they're looking for. The situation is not unlike what we're seeing with sellers — some are at the upper end of a realistic range for their property, but within shooting distance of finding a buyer and striking a deal, while others are way out in la-la land. Those sellers wonder why their house isn't being shown. Correspondingly, the buyers with unrealistically low expectations wonder why they don't find houses that delight them.

As a buyer agent, I face a decision whether to take on a buyer client with unrealistically low price expectations in the same way that a seller's agent has to decide whether to take a listing where the seller has unrealistically high expectations.It can be a tough call, and it's not directly related to price. A buyer looking to spend $125,000 can have more realistic expectations, or be more open to options than another buyer looking to spend $300,000.

Politics Scuttles National Flood Insurance Program ... Again!

As readers of this blog know, my vitriol tends to be directed at the political elephants, but in the political maneuvering that has led to the effective shutdown of the National Flood Insurance Program (for the second time this year), the donkeys are just as much the asses. The National Flood Insurance Program is an essential safety net for homeowners in flood zones. Because Congress failed to extend authorization for the program, it expired on June 1st. So for over two weeks now, homeowners needing flood insurance have been unable to get new policies. (Existing policies are still in force.) Home buyers purchasing homes in flood zones using mortgage financing can only close when they have flood insurance in place. Those closings aren't happening because they can't get it.

Why hasn't the NFIP been reauthorized? Because our oh-so-wise Democratic politicians in Washington will only attach a reauthorization to other bills that contain other, more controversial provisions that are toxic to the other side of the aisle. They're holding flood insurance hostage to achieve other totally unrelated agendas. It's downright outrageous. But then, that's Washington.

Tide of Public Opinion Turning Against Gas Drilling?

The tragic oil disaster in the Gulf of Mexico may be having an unintended effect here in New York state. Awareness of gas drilling seems to be much more widespread, and I'm sensing a turn in public opinion against it. A quick refresher for those of you who haven't been following it. Sullivan County, and in fact all of the Catskills up to a point just southwest of Albany, sits on the Marcellus Shale, regarded as one of the most important natural gas finds in the Continental U.S. The Marcellus stretches for almost 600 miles, from West Virginia and Ohio, through northern Pennsylvania, across New York along the northern PA border and ends somewhere in Greene County. The Marcellus is being actively drilled using a technique known as "hydrofracking" in those other states, but New York has taken a more cautious approach. The New York Dept. of Environmental Conservation has put horizontal drilling permits on hold here pending the issuance of new drilling guidelines, which has been expected later this year.

The politicos in Albany have been pretty much singing a chorus of "Drill, Baby, Drill." That is, until the Gulf oil disaster, which has cast a cloud over all big energy companies, including the gas companies hoping to cash in on the "Marcellus play." Their public relations fueled claims of safety are being met with a huge dose of skepticism. Even some Republicans among my friends (and mind you, that's a small sample) have moved into the caution camp, from their more typical perch of supporting big profits for big companies over environmental concerns.

Yesterday on "All Things Considered" on NPR, there was a long piece on gas drilling in the Marcellus, as well as a column in the New York Times urging the adoption of a drilling moratorium in New York state. On June 21st, the documentary Gasland has its national premier on HBO. (There is a special screening tonight at the HBO Theater in NYC as well as screening Friday evening, June 18th at Sullivan County Community College in Loch Sheldrake. Click the Gasland link for more info.) Arguably, Gasland has a strong point of view in the tradition of Michael Moore. But it will still have an impact on public opinion. Media outlets across the state, from Buffalo to New York City, have also upped their coverage of gas drilling in the wake of the Gulf.

The politicos in Albany, who often only have one agenda item, their own self preservation, may be sensing the shift. There's been a flurry of activity over the past couple of weeks to enact some type of temporary drilling moratorium in New York state. Two versions of a moratorium have been proposed, one calling for any permit issuance to be delayed until 120 days after the completion of a federal EPA study on hydrofracking (expected to take about two years); the other calls for a one year moratorium. At this point, it appears that only the one year option has a chance of passing, and the drop dead on that will be today. (See the Albany Project post about this. The arcane workings of Albany are beyond my understanding.)

One of the most interesting things in the past few weeks has not been watching the anti-drilling forces gaining traction, but rather the response from the gas industry. A press release issued by the Independent Oil and Gas Industry of New York State on June 14th was titled "New Gas Drilling Moratorium Bill Would Be Deadly to New York Economy." Oh, give me a break. That sounds more like the kind of argument that the oil industry probably made to Dick Cheney when they sought to eliminate a requirement to require acoustic shut off systems on off shore oil wells because, at $500,000 per, they were "too expensive." (From what I've read, the Gulf oil disaster could have been avoided if these shut offs were in place.) The New York economy won't collapse if we delay drilling for a year or two. And the landowner coalitions have even organized demonstrations in Albany. They want to cash in, and they want to cash in now, baby. Let the drilling begin and let my royalty check flow.

This is one of those classic upstate versus downstate, Republican versus Democrat fights But I would say the Republicans, who are part of the party that cozied up to the oil industry to loosen drilling regulations in the Gulf of Mexico, don't have a lot of moral high ground on this one. It will be very interesting to see what happens.

Today's Times: Housing Market Slows as Buyers Get PIcky

Last evening, over cocktails with a friend in Chelsea, I was commenting (actually, "lamenting" would be more accurate) about how difficult I'm finding it to put deals together. When I do find a house for my clients that delights them (a sometimes near-impossible task, given often sky high expectations), getting the seller to agree to sell it as a fair price that my clients want to pay can be even more difficult. The last few months have been consumed with a lot of wheel spinning and fraught with frustration. I'd say "hair pulling", but I don't have any hair to pull. And then there's the gauntlet of the inspection and appraisal.

This morning my friend emailed me an article in today's NY Times: Housing Market Slows as Buyers Get Picky. It was like "Wow, it's not just here in Sullivan County, but in Seattle and Des Moines and well, everywhere across the country." The happy-happy of real estate has turned into a knock down, drag out fight in some cases. Luckily, I haven't had many of those, but putting together deals — and keeping them together — is much, much harder today.The article offered a bit of consoldation that it's not just me.

Green Acres Goes Gay: The Fabulous Beekman Boys Debuts on Planet Green

It was only a matter of time. Two fabby gay Manhattanites buy a farm upstate (in this case, in Schoharie County), pull on their muck boots and set out to do some organic farming, all with a television crew in tow to record every slippery chase of a squealing piglet. Welcome to The Fabulous Beekman Boys, debuting Wed. June 16th at 9PM on Discovery's Planet Green channel. There's a good intro to the series on the Mother Nature Network site, and Time Out New York featured the fabulous farmer-duo in an interview piece this week. This could be good or it could be dreadful. But it's definitely worth a watch, at least once.

Green acres is the place for me.
Farm living is the life for me.
Land spreading out so far and wide.
Darling I love you, but give me that countryside.

No, New York is where I'd rather stay.
I get allergic smelling hay.
I just adore a penthouse view.
Darling I love you, but give me Park Avenue.

Current Market Conditions Posted with May Data

I just posted my Current Market Conditions report, with Sullivan sales data through May, 2010. The picture isn't that much different than last month, or the month before that. Sales volume picked up a bit, which is typical for late spring, but is still quite lackluster. Prices for the 3 month sample period showed a bit of a downturn last month, but after a price bump largely the result of a single large sale, we'll likely end up at a price plateau where we've hovered for months. Buyer interest continues to be strongest at the affordable to moderate ranges, with much thinner interest at higher price points. Please check out the latest Current Market Conditions report over on my main site and then drop on back here to leave your comments on what you see happening in the market.

Trout and Tractors This Weekend

Two of the county's big summer events are on tap this weekend. On Saturday, June 12th, the annual Trout Parade steps off down Main Street in Livingston Manor at 1PM, with associated festivities in the Manor from 11 to 3. And on Sunday, June 13th, the annual Tractor Parade comes to Callicoon, rolling down Main Street starting at noon. Kids especially love the Tractor Parade. Come early to the firemans' pancake breakfast at the Callicoon firehouse from 7 to 11AM, or stay later for the chicken barbeque at the Delaware Youth Center. (Don't worry --- just follow the tractors at the end of the parade route.) For those of you who may not be that familiar with Sullivan County, remember that Tractor Parade Callicoon is "Callicoon on the Delaware", at the end of Route 17B, where 17B meets up with Route 97 and not the same as Callicoon Center, which is inland, further north and east.

Is It BP, Cabot and Chesapeake, Or Is It Us?

By now, we've all seen the photos of the helpless oil covered birds struggling for their lives along the Gulf Coast. Those photos make me incredibly sad, and of course, fuel the collective anger building against BP. It's so easy to lay the blame at the feet of the big, bad oil company. Just like, over in Pennsylvania, when there's a gas well blowout, or there's fouling of water from another drilling 'mishap', it's easy to lay the blame at Cabot or Chesapeake or any of the other gas companies that are 'responsible.'

But the anger is somewhat misplaced. It should be directed at all of us, with our insatiable appetites for cheap energy. We demand cheap energy, and view it as practically an American birthright to build big houses and drive big cars and consume lot and lot of energy. We've made it politically untenable for our leaders to enact policies that would drive up the cost of gasoline through increased taxes (and thereby reduce demand), or establish land use policies that would penalize wasteful land use and sprawling development in favor of denser transit oriented development. We continue to allow the building of 5,000+ sq. ft. houses that consume obscene amounts of energy. We want our instant-on electronics and fruit in the winter flown in from South America.

As the low hanging fruit, in petro terms, becomes less and less available, the energy companies have to cast a wider and riskier net to find new sources.  So the oil companies end up drilling in mile deep ocean and the gas companies turn to hydrofracking with dangerous chemicals. The energy companies, and the politicians and regulators they're closely aligned with, sing in unison that it's safe. It's always safe when they need some law passed, policy enacted or permission granted, whether it's drilling in the deep gulf, in the arctic wildlife refuge or on somebody's farm just uphill from the Delaware River. But what's so clear from the BP debacle in the gulf is that it isn't 100% safe and nobody can guarantee that it is.

I agree so wholeheartedly with President Obama that this is a wake up call to America that we need to start seriously reducing our petro dependence, and not just give it lip service by raising fuel efficiency in cars by a couple of miles per gallon or buying a half dozen compact fluorescent bulbs.

Dancing Cat Saloon and Catskill Distillery

All winter I've been passing a construction project on the south side of Route 17B between White Lake and Bethel Woods. There's a big old farm house that's been beautifully renovated, decked out in "burnt raspberry" (if that's a color, but it's the closest descriptor I can think of) with orange trim. A big new building with peaked roofs and big windows sprouted in the field behind the house. I've been wondering what it's going to be. A church? A big antique store?

The mystery ended this week, with a banner draped over the front porch announcing "The Dancing Cat Saloon and Catskill Distillery — Summer 2010." I can't find a website for it yet, so if anybody has any info, please post.