Sullivan County Real Estate

Pa DEP Finally Gets Tough With Cabot

The PA DEP, which has been widely criticized for failing to adequately regulate gas drilling in Pennsylvania, seems to finally be getting tough with Cabot Oil and Gas over the contaminated water wells in Dimock. The PA DEP wants Cabot to pick up the $12 million tab to run a public water line to the 18 affected homes. That's led to an escalating war of words between John Hanger, the head of the PA DEP, and Dan Dinges, CEO of Cabot. Dinges even took out full page newspaper ad this week and issued a 29 page rebuttal, accusing Hanger and his agency of "political pandering."

The issue is being picked up by the national media, and just made the lead story on Yahoo Finance.

What's Up With the Alliance Reservoir Sale?

Back in the spring, there was a lot of hubbub about Alliance Energy selling its Sullivan County reservoirs (including Swinging Bridge and Toronto reservoirs) and hydro generating capacity to a NJ private equity firm, Hudson Energy (via a subsidiary, Eagle Creek Hydro.) The last mention in the local paper was in late May, when the CEO of Eagle Creek indicated he hoped the sale would be complete by the end of summer.

This morning I started wondering what happened. The technical end of summer is just a day away. Did Eagle Creek close on the sale? Has Alliance ridden off into the sunset, hopefully carrying the bad will it's sown over its short period of ownership of the reservoirs with it?

The sale right now is in the hands of FERC, the Federal Enmergy Regulatory Commission, that has to approve the transfer of the hydro operating licenses to the new owner. I spent a couple of hours on the FERC website, reading through the dozens of filings related to the transfer. You gotta love America, where all this stuff is public and available online. If Eagle Creek expected smooth sailing and a quick approval, they aren't getting it.

A lot of the filings and comments deal with more technical aspects of the license transfer, like ownership structure, operating experience, compliance with dam operating regulations and the status of repairs. But a significant portion of the comments from third parties  relate to the recreational use of the reservoirs, particularly maintaining sufficient water levels to support public recreation, and ensuring public access to Toronto Reservoir at a second point near the dam. The reason that these items are coming up in a FERC license proceeding is that enabling recreational use and public access are required by the license terms.

Commenters chiming on on the license application include the county, Congressman Hinchey, Friends of Toronto, Home Owners on Toronto, Swinging Bridge Homeowners Association and Woodstone Development, the developer of the Chapin Estate. These commenters are asking FERC to hold the licensee's nose to the grindstone — whether Alliance, the current licensee or Eagle Creek, the proposed licensee  — to comply with its license and maintain sufficient water levels for safe recreational use. Most of the commenters also want FERC to require the licensee to ensure a second public access point to Toronto Reservoir, a public sore spot since Woodstone closed off the access road across its lands.

All of these third parties seem to be in agreement that this license process is the opportunity to finally force some type of agreement about minimum water levels on Swinging Bridge and Toronto, something that's been unattainable during the Alliance tenure.

It's quite interesting to read through the filings and comments. (OK, maybe not as gripping as a John Grisham novel, but I like this kind of stuff.) The most eye opening have been the comments from Woodstone, the developer of Chapin. Woodstone was widely demonized in the public eye when it blocked off the second access point to Toronto near the dam. But reading Woodstone's comments to the application, particularly this Supplemental Comment submitted Sept. 10th paints a somewhat different and more sympathetic picture. It appears that Woodstone has been repeatedly trying to bring Alliance to the table to work out a water level agreement, and has been using the access issue as the bargaining chip to do so. Of course, guaranteeing recreational water levels long term on the reservoirs greatly benefits Wooddstone and the Chapin homeowners. But it also benefits the public, who, just like the Chapin homeowners, weren't able to motorboat on Toronto for most of the 2009 boating season because of the severe drawdown by Alliance.

Second Home Owners — You Can Vote Here

Sullivan County is one of those places where single votes can make a difference. Races here, particularly at the township or schol board level, are sometimes won or lost by as few as a few dozen votes. Particularly over the next year, with gas drilling gaining momentum as an issue, some of the upcoming elections will be very important. This November, for example, David Sager (D), an outspokjen drilling opponent, is running against the long term incumbent Republican John Bonacic. It's one of those races where every vote will be important. Township elections are coming up in November, 2011, and in many townships will likely feature matchups between pro and anti-drilling candidates.

As a second home owner, you have a vested interest in Sullivan County. The courts in New York state have affirmed the right of second home owners to choose where they want to vote. (2008 case in Bovina.) You do not have to change your primary residence to your second home locale to qualify to vote there. The courts struck down reliance on items like drivers license addresses, car registrations or the address on your tax return, and looked instead at a voter's overall ties to the community and maintenance of a legitimate and significant physical presence.

Bruce Ferguson has pulled on voting for second home owners, that I've uploaded here as a .pdf. One thing to note is that registering to vote in Sullivan County can make you subject to being called for jury duty here. Jury rolls in New York are compiled from information provided by 5 state agencies, including the DMV and taxation. So if your driver's license and tax return have NYC addresses, and you're registered to vote in Sullivan, you could conceivably be called for jury duty in either locale. But you wouldn't have to do double service. When you fulfill a jury obligation anywhere in New York, that counts throughout the state for 6 years. Sullivan County uses a juror call-in system. Your jury summons includes a number. During your week of "service", you call in every evening at 6PM for the following day, and are told what, if any, numbers need to show up the following morning.

You can register by mail. Applications  are available here. Resgitrations by mail, to qualify for the upcoming November election, must be postmarked by Oct. 8th. Information on getting an absentee ballot if you won't be here in election day, can he found here. Applications for an absentee ballot must be postmarked by Oct. 26th.

 

No Frack

If you've driven almost anywhere around Sullivan County recently, you've surely seen these "No Frack" signs sprouting up in front of houses like mushrooms in a cow field after a rainstorm. They're even showing up in parts of the county that are unlikely to see much impact from gas drilling if it actually approved for this area — which is still a big question mark.

One thing that's noticeable is how the "No Frack" signs are outnumbering the "Friends of Natural Gas" yard signs. By my very informal count, I'd say it's about 5 to 1. And contrary to how the pro-drilling factions try to spin it, it's not just second home owners from the city who have them in thier yards.

 If you want to pick up a "No Frack" sign, they're $5 and you can find them at the Harvest Market at Bethel Woods and at the Callicoon Farmer's Market. Victoria at the Olde North Branch Inn in North Branch usually has them available, as well. (If you know of other places where you can get them, please add as a comment to this post.)

While the future of gas drilling in Sullivan County is largely in the hands of regulators (the New York DEC, the Delaware River Basin Commission, and further downline, the EPA), the upcoming November elections include one race — for State Senator representing Sullivan County — that is shaping up as a referendum on citizen sentiment about gas drilling. The Democrat, David Sager, an outspoken oppoent of gas drilling is up against long time incumbent Republican John Bonacic. While Bonacic did vote for the short term moratorium this past summer, he can't be counted on long term to carry the anti-drilling torch long term. He's just too pro-business.

 

Latest Current Market Conditions Posted

The September Current Market Conditions Report is posted, with sales data through August. A mixed picture this month. The overall single family home sales price as reported in the Sullivan MLS for the 3 month period ending Aug. 31 is sharply higher. But the sales volume continues to be, well, 'tepid' would be a charitable word. The higher average and median sales prices are largely the result of some great deals being cut on some houses in the $300,000 to $500,000 range pulling the average and median up. It should not be interpreted as an across-the-board rise in prices brought about by a surge in buyer demand.

Buyer interest seemed reasonably strong in August, at least from my perspective of website visits and appointments. But that interest is tempered by tremendous ambivalence among buyers. While buyers over and over tell me, "We're patient and want to wait for the right house to come along," what I think they're really saying is, "We want to wait until the economic and market conditions give us more confidence."

Check out the latest Market Conditions Report and then drop on back here to leave your comments on what you see happening in the Sullivan County Real Estate market.

Sellers Need an Attitude Adjustment

The road from an accepted offer to a closing is a rough one. It takes a lot of perserverence and skill to keep a deal together in this market. I've blogged a number of times about sellers needing to bring asking prices in line to appeal to very value conscious buyers. Slowly but surely that's been happening, and certainly a factor in the uptick in deals we've seen over the past month.

But there's a huge problem, largely on the seller side, once a deal is struck. Many sellers believe that they're giving their house away, that the buyers are 'stealing' it. They're not. In most cases, buyers are paying a fair price for the maret at this point in time. Sure, Ms. Seller, you may have been able to get $400,000 for your house in 2007 or 2008. But you didn't sell it then. You're selling it now. So selling your house today for $300,000 is not a $100,000 discount. But a lot of sellers view it that way. In their mind, they've made a huge sacrifice and they're done.

But buyers don't see it that way. They feel they're paying a very fair price for the house. They don't see it as an "as is" foreclosure being fire-saled $100,000 below market. And that's where problems crop up. When significant issues come up during the home inspection, buyers want some resolution. When they came to the deal, they didn't anticipate $10,000 or $20,000 in structural, foundation or systems repairs. Or if the appraisal comes up short, they want to reopen the price discussions.

Contrary to a belief among some sellers, buyers don't, with rare exceptions, come to a deal with the expectation that the inspection and appraisal are tools they can leverage to drive the price down further. When they come to a deal on that house $250,000, they plan to pay that. They want that house at that price, without big unanticipated problems and with the bank agreeing to lend on it. That's pretty much it.

But unfortunately that may not be way it plays out. Houses have issues, and sometimes ones that the sellers aren't even aware of. (It always amazes me that sellers don't get pre-sale inspections, so this stuff doesn't come as such a big surprise.) And in the finicky lending environment, houses sometimes don't appraise.

These are realities, and ones that sellers need to deal with. Having the attitude that you're already giving a $100,000 "discount" doesn't help move the deal along. What you could've, would've, should've sold the house for two or three years ago isn't relevent to the buyers. It's spilled milk.

Sellers need to look at the deal on the table as a clean plate. It's not two years ago. It's now. The ongoing adjustments and negotiations that occur between deal and close are part and parcel of selling a house, and sellers should be prepared for that.

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Note: This is not the case with all sellers. I had a deal close this past week that was a veritable love fest between the buyers and the sellers. The deal was at a fair price, we easily came to terms on inspection items, and the sellers even planted fresh flowers and perennials around the house so it would be nice for the new owners!

Lake, Lake, Lake

I've been AWOL from this blog for the past couple of weeks. I've been super busy working with buyers. It's like a fire hydrant opened, with the calls and emails and requests for appointments. A bit of a surprise, actually, as the couple of weeks going into Labor Day tend to be slow becuase people are getting kids ready to go back to school and thinking about their last summer hurrah.

Almost everyone in the past couple of weeks has been asking about lake property. That's understandable, given the 6th heatwave string this summer of 90+ days in New York City (a record, by the way.) What's been surprising, as I've called around to set up appointments to show houses, is how many lake houses have accepted offers or contracts on them.

In August, six lakefront homes sold — five in the $300's and one in the upper $200's. There are six other lakefront houses in contract, a seasonal likely to sell in the upper $100's, three in the $300's, one in the $400's and one in the $500's. That one going in the $500's has 5BR, 2BA with approx. 4,000 sq. ft.

I'm aware of another 4 lake houses with accepted offers but not yet in contract. There may be some others with accepted offers that I don't know about (since "accepted offer" is no longer a status entered into the Sullivan MLS.)

One common factor, from both the buyers I'm talking with as well as looking at the lake houses that are selling, is a focus on the moderate price range. While there's a smattering of activity in the $400's and $500's (and one Chapin house in a deal in the $1M+ range), most of the action is in houses in the $300's and below. Almost all of the lake houses that are moving have very good lakefront. They may not have a lot of it (some of the less expensive houses may only have 60 or 70 frontage feet), but what's there tends to be quite nice, and on larger deeper lakes. I'm not seeing a lot of action on houses on smaller, shallower lakes. (There are a couple of exceptions, where the houses have been pretty spectacular.)

If all the lake houses currently in contract or with accepted offers close, and pick up a few more in the next 6 or 8 weeks (which is likely, as September and October tend to be strong selling months), lakefront sales in 2010 could be on track to equal 2009. That's a bit of a surprise, because lakefront sales during the first half of 2010 were very weak.

The lakefront sales pickup is helping to establish some pricing benchmarks, particularly for the affordable to moderate range of lakefront. With more comps, appraising is more clear cut. The upper end of lakefront is another story. With very few sales above $500,000, pricing and valuation becomes much more difficult. In the under $400K range of lakefront houses, I can extrapolate from the current sales to zero in on a supportable value range for a property. But at upper price points, there are very few data points to extrapolate from, so it's more difficult to bookend a supportable value range for a house.