Foreclosures

As the media continues to spell doom to the entire housing market, I am getting more calls from second home buyers looking for foreclosures. Invariably even if the prospective buyer doesn't begin with that topic, as we chat about what they are looking for, the subject always comes up.

It seems that some have this vision of finding the deal of a lifetime, and snatching up a wonderful little country getaway for a fraction of the cost.

Its like the urban myth of the "friend" who is subletting their grandmothers duplex in Chelsea, and paying only $600 a month. When I lived in Manhattan, everyone sort of knew somebody like that, but not really firsthand but they were spoken about with awe and reverence, and a bit of jealousy.

The problem with the foreclosure market in Sullivan County, is that that side of the housing market is very different than what most of the people I deal with are looking for. I attached a link to a typical foreclosed property here. Believe me this type of house is a dime a dozen.

Click Here

Most are in the south eastern part of the county, around Monticello, Fallsburgh area. Like the rest of the country, they are mostly primary homes, taken over by the bank after the owners have stopped paying. The houses are often in disrepair, and have been on the market at various prices throughout the foreclosure process. Contrary to what some might think, a home typically goes into foreclosure only when every other avenue has been tried. Banks do not like to lose money, and will not give a house away.

Now I am sure that there are some very nice second home style properties out there right now, where the owner is in a tough financial situation, but being upside down, or even attempting a short sale, does not automatically turn a deal into a steal.

I just heard of a house that is going to auction this week. It had been on the market for almost two years, the price dropping to 70% less than what was originally asked. The problem is that it is in a flood plain, with major water damage, and even at these low prices, buyers do not want to deal with that headache. I am curious to see what it sells for, but like anything else in life, if it sounds to good to be true, it probably is.

Froelich Road Houses

I posted last month about the three houses on the hill above Callicoon. Well the lower house finally closed last week. Price was $250,00o. Originally listed at $399,000--it is a nice house with some good views. I attached the picture below. The only downside is the driveway, which is quite steep. But I suppose at that price it still becomes worth it.

The upper house, however just came back as active on the mls. I am not sure why the deal fell through, but after sitting with signed contracts for almost two months, something happened to kill the deal.

I attached pictures below. This property has the driveway to contend with as well. But it is a nice big house, and the views are the best of any house on the market in the county. Hands down. It is listed at $329,000. Originally it was close to six..

I really believe that this house is one of the best deals on the market right now in this county. Any offer in the mid to high two's would probably get accepted. ( I do not know for sure, as I am not the listing agent.) But browse some listings in that price range. They don't even begin to compare.

Now couple that with a very low interest rate. Is this Apple stock pre ipod/iphone? Not quite, but three years from now, this house will not be worth less than $260,000. And interest rates will be higher.

If anyone is interested in viewing this home give me a shout.

The Gaffken-Barriger fund wins first round

Interesting article in the River Reporter about the latest on Barriger. The link is below.

For those of you who aren't familiar with Gaffken-Barriger, they are a private investment company here in Sullivan County, that specialized in higher risk loans, with a high interest rate.

Well, when the market began to tank, numerous mortgagers defaulted, including a Florida based company, which had borrowed over ten million.

Those who had invested in the fund are insisting that they were "guaranteed" an eight percent return, and are quite upset, that not only are they not getting a return, the principle is gone as well. An investigation continues, but no criminal charges have been filed, and from what I hear, they are not expected.

It is rather sad. I met with an older couple last month, who must sell their house and move in with their daughter because they invested their life savings with the fund.

But I suppose this is a prime example of caveat emptor. With all the fast talking that I'm sure went on to convince people to invest, there must have been some fine print somewhere that this was a possibility. This was no Ponzi scheme, although I'm sure that is little solace for those who have lost their shirts.

http://www.riverreporter.com/issues/09-04-02/head2-invest.html

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...

My New Listing

First off the house I wrote about in my previous post sold for $450,000. Not bad I was guessing less. I am sure the new owners are going to love it. It really is a special property.

I think in this down market, where every buyer seems fixated on value, and finding that elusive bargain we have lost sight a little bit on why people buy second homes in this county. I think this concept has been touched on in other blogs, but at the risk of sounding like the department of the redundancy department, I would like to put my own spin on it.

People buy here for a lifestyle--a getaway--for rest and peace of mind. That is why the real estate department varies so tremendously here. A suburban ranch in Monticello will be priced very differently than a small quaint farmhouse on a quiet road, although both may have similar square footage, and be only a few miles from each other.

With that being said, I have a new listing in Black Forest Colony, which is a private preserve/development in Lumberland. There is over 1,100 acres set aside for the residents to use--hike, hunt fish atv, whatever. This particular property is five acres with a great year round stream, a private wooden bridge is the only way to get to it. It is deep in the woods. The house itself is more of a cabin. I attached pictures below. It was built in the fifties, and as a lot of charm. All original woodwork, etc.

You can see more pictures on my website. Now you may think I am pumping this property because it is my listing, and that is true, but I think it also brings up an important issue on value. We decided to list this property at $245,000. It has less than 1,000 square feet. Some will probably look at this listing at shake their heads, and murmur something about overpriced in a market such as this.

But there is no other listing in Sullivan County that is similar. It has what very few properties have. Complete seclusion, access to land for recreation, and some real authenticity.

In my opinion it is a simple case of supply and demand. That is why we decided to price it the way we did. Special properties will carry inherit value despite fluctuations in the market, because the appeal will always be there.

At rate shoot me an e-mail if you agree, or if you think I am way off base.

Another 400K Plus House in Contract

Another favorite house of mine just went into "contract signed" status on the MLS. This house

is an Alpine log home on ten acres in Lumberland. I attached some pictures below.

It has three bedrooms two baths, a beautiful field stone fireplace, it is made with 18' logs. Completely secluded on ten acres, which adjoins state land.

This house has that rare feeling, where you just want to take a deep breath and relax when you step out onto the deck. The view of high point New Jersey is really nice, (in fact you can see three states from the deck)

The seller bought this house in early 2006 for $625,000. About a year and a half later, he put it back on the market. (I believe it was because of a job relocation) Initially it was put back on for $759,000. And why not? it was the height of the boom, and this really is a special property.

Well the property sat. Perhaps the cool off had finally started, and buyers just felt it was too much. Or maybe it was into that upper bracket where there is fewer buyers. At any rate, despite numerous showings, it sat.

There was a series of price drops, and a switch of listing agencies. The last list price was $499,000, and it sat at that price throughout the winter. I showed it a few times, and had an interested party, but they felt the market was too unstable, and decided to play the wait and see game.

But then Friday it went into contract signed. A quick e-mail to the listing agent indicated that it is all but a done deal, money is transferred, and it will close in a few days. I am very curious to see what the final price was. I am guessing low fours, but would not be surprised if it is in the three's. I will be sure to post when I know.

This is a situation where the current seller bought with cash back in '06 so he didn't have to worry about being "upside down". He took the 100k plus loss.

I believe that as reality sets in, we will see more and more of these type of deals. Real estate is still moving, but we are still searching--not so much for a bottom but a range--a place where we can gauge market value.

At least it is better than a dead standstill.

Interesting Article on Gas Drilling

Steve McConnel wrote an interesting article on gas drilling in Wayne County. I included the link below.

I think the most interesting thing (besides the obvious lack of permits coming in) is the fact that Stone Energy Corp. spends well over a million dollars in leases, brings in all the equipment and man power to drill, yet fails to apply for a permit from the DRBC to drill. I would love to have heard the conversation with the guilty party when the head honchos at that company found out that the drilling had been stopped. That's a pretty big oops.

I guess we will wait and see what happens. Has the bad economy and cheaper gas prices really squelched the Sullivan County natural gas rush? I for one hope so.


http://www.wayneindependent.com/news/x1959833495/Permitting-agencies-not-flooded-with-gas-well-requests

Haven't posted in awhile, because I've been busy.

It has been a week since my last blog post, which I suppose would make the real estate "experts" purse their lips and shake their heads in disapproval, but I have a good excuse. I've been busy.

Real estate busy. I was double booked all weekend, and had listing appointments the last two days. Two of my showings turned into offers, one has been accepted, and the other...fingers crossed...looks like it will be accepted as well.

Now they aren't Chapin lakefronts that I sold. One is a $130,000 house, the other is a $90,000 piece of land, (which puts me squarely in the new Sullivian median) but to borrow a phrase from the youth of America, I am still stoked.

February numbers will be out soon, and I think they will be as putrid as we have seen. Volume of closed homes in Feb. will be very low. I think that we are finally seeing post Lehman numbers, and the landscape, even to the most optimistic looks bleak. But as we all know, there is a lag between getting an accepted offer, and the closing, when the sale shows up on the stat sheet. So the bleakness we are seeing is really from the frozen deer in the headlights period at the end of '08 where people did nothing for a few months.

But for now, I have inspections to go to, people to call back, and listings to upload. Busy feels good.

Main Street Cafe in Narrowsburg

I suppose an upside to the slow down in the economy affords me a rare Sunday off. Today my wife and I ate breakfast at the Main Street Cafe. I forgot to bring my camera, and upon searching for a picture on google, the one above is the only one I could find. I apologize to the original owner if there is a copyright infringement, but it is a great picture of the outside deck.

The place was busy at 10:30, almost full. We got a table by the window, in the sun, it was a pleasant atmosphere from the beginning. It is small, probably about ten tables inside, and a bar that seats five or six. I would guess there was about twenty five diners, which is just about capacity.

The food was delicious, our waitress friendly, and although there was a wait for the food, it didn't bother me. We sat, and people watched, and read the paper. It reminded me of a few places I used to go too when I lived in Hell's Kitchen. The whole restaurant has that cozy tin ceiling feel. It would have fit right in on 10th Ave. (although the prices are definitely Sullivan County)

I know many of my customers come here to run away from people, but sometimes it feels good to be around folks, and after this long dreary winter, It felt good to be among humanity. I would recommend checking this place out, especially this summer when they get the deck open.

Barriger Houses in Contract in Callicoon

I just found out today that the three houses up on the hill on Forelich Drive over-looking Callicoon, are all in contract. I am surprised given the state of the economy, but am also buoyed by the news. People are still buying second homes in Sullivan County.

All three were built at the height of the boom. The entrepreneurial contractor backed by Barriger, bit off a little more than he could chew, and before the houses were finished he had defaulted. Barriger foreclosed, and had the first two finished and the last was getting close. But then they had there own financial issues. Essentially the houses were foreclosed on twice before anyone ever put a piece of furniture in them.

The lower house sits on 18 acres, however the acres are a steep hill. It is a four bedroom 2 bath home with board and baton siding. It has a nice view, but it is not as nice a view as the houses further up the hill. Below are pictures of the first house.

This house was listed for $299,000 (originally when it was first on the market, the price tag was $425,000.) I am not sure what the accepted offer is, but I am curious to find out.




House #2 is the biggest of the houses. It is 3,600 sq feet. It has a big covered porch looking out over the view, and the view is one of the best you'll get in this county. (pics below.) Original tag was $599,000. When it went into contract it was at $425,000. Again curious to see what the accepted offer was.








House number three had the most issues, but has the best view. The driveway is very steep, and was washed out when I was up there. Also it was still not finished. It is smaller than the others, but the master bedroom views are really breathtaking. Original price was $599,000 finished. Last price was $329,000. I am guessing with the work that needed to be done, this house went for low to mid two's. Again I will be curious to the final price.

It goes back to my theory that there still are buyers out there. They just need to know that they are getting a bargain before they will take the leap. I guess a house that was on the market for $200,000 more last year constitutes a bargain to some. Congrats to the soon to be new owners, and welcome to our town.