Thursday, March 26, 2009

Interesting Listing

Once again my blogging has lagged. And once again it is because I'm busy. This past weekend I was out showing both days. Buyers are returning, as the air is warmer, and the prices and interest rates are lower.

The market has definitely changed, and I think for the better. I remember the days when I used to cringe when I would get calls for prospective buyers looking in the 150 to 200 range, and anything lower was really crap. I remember early last spring (march '08) I showed fifteen houses to a guy in that mid $150,000's range all around the county. He wasn't looking for anything extravagant. I believe it was three bedrooms, two bath with a little charm and privacy. Some of the things we looked at were absurd. It got to the point where showing was no longer any fun, and at times it felt like a real waste of time.

I believe the people who drive the real estate market in this county, are a gen x subdued version of the yuppie. (although if you call them that, they would be somewhat indignant) At any rate, our county is very dependant on that particular city-folk weekender. Not ultra-rich, but rather one where a second home is a big purchase, and one in which serious sacrifices must be made to make that dream a reality.

Those folks began to get priced out of the market, and that is when our version of the real estate bubble burst.

But now those people are able to look again, and see things in their price range that they like. The reason this all came about is because I was speaking to a customer about a particular property he likes.

This property is in Cochecton. It is a 1900 farmhouse on 28 acres, with the original barn, and all the original floors and walls. (The dreaded 70's paneling did not manage to infestate this one.) It has its normal farmhouse drawbacks, one bath, funny shaped kitchen, a lot of paint and elbow grease will be needed. I attached a few pics below, courtesy of Malek.

Current price is $248,000. This is one of those properties with good bones--actually great bones. The acreage does have the millennium pipeline cutting through a portion, but it is somewhat flat and has a big stream.
If you take this property, and refinish the farmhouse to its glory, and do it slowly as a project while you come up on weekends, what will this property be worth in lets say ten years, if the market rebounds.
I know at the height of the boom, a redone property like this was selling for mid sixes. You couple this with a low 4.5% interest rate, and all of the sudden it makes sense to buy it, not only as a labor of love, but as an investment. The naysayers will moan about how we are not at the bottom, and it is much to risky, but they also would have told you not to buy stock when the market was at 6,700, almost 1,000 points ago.
And in ten years when the interest rate is 8.6 and our median price here is up 48%, we may look back and say. Shoulda bought at the bottom.
Its gonna be fun to read some of the e-mails I get on this one...

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