Catskills - Sullivan County - Ulster County Real Estate -- Catskill Farms Journal

It's only been 3 weeks since the pause began, but what a 3 weeks it has been.  What is true one week is outdated the next, what is true one day is not the next what is true one hour is challenged the next.

That being said, our evaluation of what this means to the Catskills upstate real estate market remains fluid.  We are fielding a lot of calls looking for homes.  With motivated buyers.

I've been saying since the PPP program came out, putting the onus on banks large and small to lend lend lend with little if no regular due diligence on the loans - I've been saying from day one how would/could any bank trust the word of a President who has spent his life screwing banks.

And then, there you have, a statement he makes in the middle of his daily rantings, where he says 'banks should be lending... according to what we think it right."   What?!  What kind of guidance is that?  it's his opening gambit to blame the banks for a poorly structured loan program.

I'm a small town bank aficionado.  I love small banks, and recognize their value, and the skills and community-knowledge that enables these banks to survive and prosper, for generations, for centuries +.  They occupy a very important place in our society.

And now you have a country asking every bank to step up and serve their community, as quick as possible, with fuzzy rules, to do away with all the due diligence and caution and precision that have kept them in business - and within 3 weeks we start getting comments where the president starts throwing shade on the only thing these banks had to go on - faith that the American Government will make them whole.

If the Feds would screw these small banks in some way, even with unclarity or fear, the damage that would do is incalculable.

You can understand the dilemma - how does a stalemated congress get a $2t stimulus bill through in record time?  The answer seems to be 'with as little nuance and detail as possible'.   Catapult a big spend package into the besieged city and hope for the best.

Which is why, just a few short weeks into it, anyone with a little small business experience can see the shortcomings, moral hazards and unintended consequences.

First, regarding the stimulus -  remind me why all families making under $150k ($75k for individuals) need $2400 (plus $$ for kids)?  Yes, if you've been harmed and impacted.  Yes, if you lost a job.  But what about the 75% of Americans who haven't been impacted at all?  Just send them money too.  While the short answer is 'sure, why not', the longer reply to that is 'because then you have less money for those who actually need it.'  We are touting a 'donate it, don't deposit it' for those who are receiving checks who haven't been harmed.

2nd, the Payroll Protection Program is just silly, as it stands currently.  First, all you have to do is attest  (not prove) your business has been harmed - there is no other criteria.  With that loose definition, really, who hasn't been harmed?  2nd, it's encouraging small business to keep on staff for no other reason than the government is paying for it.  The problem there is having employees costs money.  Worker's Comp, payroll costs, administration costs, and the grand daddy of them all, the hazard of continuing to spend on projects and investments that may not be in the business' best interest at the moment.  Sure, I can keep all my employees on, but what am I going to do with them?  Continue to invest in homes that may or may not have a buyer in the end?  It sort of is the ultimate short-sighted trap- government induced small business spending in order to get a forgivable loan for producing/activities you possibly shouldn't be engaging in.

The PPP, in defining eligible businesses as under 500 employees and a simple test of "I boy scout promise we've been harmed', are not elements a successful program make.  It should have been under 50 employees, no questions asked.  Under 250, more questions asked, 250-500 a lot of questions asked.  It's the under 50, really under 20, employees that don't have many options, and typically don't have many reserves.  Of course the bigger the company the easier it is to receive this money - they have good books, ready access to accountant, strong banking relationships, staff accountants and book-keepers, fast internet and tons of time to apply.  Duh.  It's not their fault the feds did a shitty job with the structure of the program.

The expanded unemployment benefits is another thing to look out for.  For the next 4 months - now that the government has tacked on $600 to any state benefit - anyone making less than $50k a year, or $24 an hour - makes more on unemployment than working.  So if you were working at $10 or $15 an hour, you literally get a gigantic raise by not working.  Not saying it's good or bad, just saying that it's enticing to people who are working to seek unemployment they wouldn't otherwise seek when it is 50% of the typical employment earnings.

I think we are seeing the difference between the 2009 and 2020 responses.  Both with good frameworks of ideas to solve real problems quickly.  In 2009 you had an executive branch that respected the deep recesses of professionalism and advisors in the government, and in 2020 you have an executive branch that has hollowed out the depth of experience that could aid and craft more nuanced legislation.

Here's the dirty little secret.  The federal government doesn't have nearly enough money to bail out the private sector, and every dollar it wastes with misfires is a dollar that was needed someplace else.

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The other week we - was it the end of March - we sold two homes.

The first, Farm 30 in Olivebridge NY, was a 2014 Catskill Farms new build.  The home was represented and sold by our Sistah company Lazy Meadows Realty. A fantastic home that the owners were kind enough to let me use as a 'show' house for years.  It inspired a lot of people.  Sold for $716k+/-.  About 2800 sq ft.

The 2nd was a brand new Barn 34 in Narrowsburg NY.  At 1500 sq ft on 6 acres with 600 more sq feet of finished basement, a fun home that checks a lot of boxes.  Sold for under $450k.

Our part-time graphic designer/web person has been helping out a lot, including a fun project where we are putting our builds to classic music, in order to enjoy them quietly from the comfort of the couch, or the bed, with pillows positioned comfortably, with lots of call outs to the significant other such as 'wow, honey, have you seen these guys?"

A link to the broader array of our videos on youtube -
https://www.youtube.com/results?search_query=catskill+farms

and a more curated one  of the new home initiative at
https://vimeo.com/channels/catskillfarms/page:6

We sold ol' Farm 56 yesterday to clients who were with us before the house started, meaning we paired the house, land, budget, timing and client together in a package, wrapped it up with a bow, and delivered it on time 6 or so months later.

It's what we do, so sometimes the true talent it takes is overlooked.  First, we have to scout good land at great prices.  2nd, we have to find client, which we do mostly on our own without the help of the real estate community, 3rd, we have to pair a home that matches the budget of the client as well as the space and flow, 4, we have to ensure that house works on that piece of land, since some lands supports a wide range of land plots, other don't and call for something specific, 5, we have to collaborate successfully with these clients we know little about, typically juggling 14 or more houses at a time, 6, we have to build these homes within the framework of the ultimate appraisal since our word to our clients is that we build things that have value in marketplace, 7, we need strong cash flow and lending capacity since besides the deposit, we pay for all the building and improvement and then when it is finished, appliances on, Certificate of Occupancy issued, board of health hurdled - we sell it, like any other finished home, to the client we had attained 6+ months earlier.

It's one thing to design/build.   It's quite another to 'land scout/acquire client/design/build/finance/sell'.  It's tricky and no other company, literally no other company regionally does what we do.  It just takes to much discipline talent and while there are a lot of talented people out there, most of them can't wear multiple hats - they are good at what they are good at, and that's where it ends.

Now that I got the point of the blog out there - Catskill Farms' stuff- let me digress to the events of the day.  I was just saying 2 weeks ago that if there ever was a time to test the gun rights people's seriousness about the 2nd amendment, and why we all need guns all the time everywhere, this is the time.  With broad, never seen before, actions of State and Federal government to shut down a broad array of constitutionally protected activities - work, assembly, freedom to worship, prosper, gather - if there ever was a time for that pure strict constitutional interpretation of the 2nd amendment - to form militia to protects one's rights against government overreach, that time is now.

I'm not a gun owner, so I'm not too wired in to those insane extrapolations of interpretations of how the 2nd amendment of 250 years ago when electricity didn't exist and guns shot one round - followed by a 45 second reload process - then shot another, somehow supported any type of gun ownership anywhere, anytime.

But how often have we dismissed as completely unimaginable the need for a militia, discarded those arguments because the unlikely need to stand up to government overreach.

Yet, here we are - in the most black and white example of a government using their power to trample and extinguish freedoms that are assumed and basic to our understanding of the covenant between our government and us.  It's clear this need for a militia seemed far-fetch because we have allowed such an all-pervasive control of our lives by the government that the idea of the government overreaching to a degree we would actually care about seemed far-fetched.

But here we are, losing our jobs, families, education, worship, way of life, because of decisions the government is making, so yes, if we are talking about the basic rights granted to us by the founding document we celebrate, we have every right to push back.

My thought is that these State governments better be using the April 1 - May 15 time period where they shut down the country to come up with a real plan, industry by industry, to open up, with real enforceable rules and real reasons why one industry can be open and another can't.

Until someone can explain to me why McDonalds and Burger King are essential (and show me how low wage workers, untested for the virus, making food, exchanging money, passing out hundreds of thousands of food bags, food wrappers, drinks to a long stream of untested auto occupants are somehow safe and free of disease) - when someone can show me why fast food is essential, and not single family non-urban residential construction where we work outside, with the same people everyday, and provide a broad array of support to a broad array of industries and families - until these governors start getting serious about who wins and who loses, with credible explanations, then I'm starting to lean on the side that legitimate, constitutionally protected protest, is a very viable action for patriots to take.
(Amended - NOW GOLF COURSES ARE OPEN, WTF!)

Funny how this seems right wing - which I'm not in anyway-, since the right wing has bastardized this argument for much lesser causes, but in this case, it really goes to the heart of what it means to be an American citizen, promised certain rights.

Asidedly, how could actually engineer a better way to take control of a society?  If they didn't know how to do it before, we certainly have a road map now of how to control the minions and sheep that constitute our citizenry.

I don't disagree with what's been done on a dime thus far, but their thinking is going to need be more surgical and much less blunt hammer to maintain control and consensus.   It's not radical to accept the damage being done in the name of the virus is outdoing the virus itself.  And if your mind is not too rigid, you can actual express the above sentiment without disagreeing with any State action that has been do to date - but, that mandate and acquiescence to such extreme State power has a short leash, IMHO.