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

Thursday - Saturday morning in Orlando to watch my son’s JV football game.  Their team organizes a trip down there every 2 years or so for a fun week of fun and football.  Then to Raleigh NC to visit my nephew then back home on Sunday to prep for the week ahead. My pickleball skillset has accelarated.

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My prep for the week includes continuing to complete a pre-closing checklist for the sale of $2m worth of Olivebridge, Ulster County NY real estate, homes 6 and 7 in our 9 home project.  The other two homes, and another 2 in Sullivan County are being built and completed on ‘spec’, without a buyer lined up or in this case, even without a buyer sought until the homes are complete.  It’s a boss move, keeping them secret, since it takes significant financial wherewithal, which we got.

I know of at least two ‘competitors’, or copy cats, or ‘imitation is the highest form of flattery’ projects, and I’m sure there are more, that are flaming out with lackluster or actually zero sales - one in Callicoon, and the other in Stone Ridge.  The Stone Ridge property I came very close to buying and it would have been a great project and checked a lot of my boxes - already subdivided, in a good town, good screening between houses - but some of the engineering hidden in the footnotes and small print were just too much of a variable for my tastes so I passed, but was non-plussed and had a serious FOMA case when this other group bought it.

But by not buying it, I was available for the next opportunity in Olivebridge, and that one worked out well for me.  As a business person, risk-taker, business owner, speculator - what you don’t do is as important as what you do do.  You quickly forget about the ones you pass on, but something can tickle the chords of recollection and you can remember that what you don’t pursue - be a piece of land, a deal, a person, a problem - is critical to long term survival.

I remember when I started Ashokan Acres, an article was being written about it and made it seem like a sure thing - I assured the writer it was anything but, and listed the failed or struggling projects I knew about, but if you’re not in the game, you don’t realize the struggle.  And since we have such a track record of getting it done and monetizing our efforts I guess it’s sort of assumed we will achieve the goals of the project - which I guess in a way is a bit of a sure bet at this point in my speculating career - but still - hat would be dangerous, since few people make it through a career in speculating without going bust - like the old adage that ‘there are only 2 types of motorcycle riders - those that have laid their bike down and skinned their legs up, and those that will.”  2 types of real estate speculators - those that have gone bust and those that will.

We got two million dollars of real estate closing in the next 2 weeks, and 4 homes being built buyer-less that will be for sale next year. Shifting gears, evaluating the Catskills housing landscape, filtering the information and delivering a prognosis like Ai wishes it could - 

Starting to sort out what 2025 will look like. What it won't look like is moving as fast as I can, building as much as our capacity will allow.

I appreciate the work of a professional the much as the next guy, but no industry compensates mediocre performance more fully than the monopoly that was the real estate industry. There was literally no compensation differentiating between good skill sets and bad skill sets, between experience and inexperience, and there was little to no room to negotiate their fees, regardless of the assertions of the real estate players who claim 'that all fees are negotiable' (especially if you don't want anyone to show your home or you want to get silent black-listed from the collusive activities among all the real estate companies.)

Nobody should be paid $60,000 for answering a phone call, unlocking some doors, and showing up at the closing table. There is a value there, but because of the wink and nod collusion in the industry, it's not valued appropriately.

Here's a Axios article - Subtitled - "Mediocre real estate agents are out".

The unaffordability of using 6% commission based agents forced us in 2005 to sell our own houses, because our profit margins couldn't support a 6% payout on sales price, not profits - where agents who unlocked the door would get paid more than our years worth of effort. We actually are one of the few firms in the country that can claim the vertical integration of development, design, build and sell effort (more accurately, 'successful effort'). Over at Ashokan Acres, only 1 of 9 came through an agent, and that was a suspect arrangement that seemed more like friends or colleagues- 1 with a real estate license - working in tandem to profit from my efforts. So the buy side being eliminated from the commission would eliminate that type of shenanigans.

My guess is this article is right on - different compensation scheme, less shitty real estate agents hoping for that 1 or 2 sells a year for augmented income, more business at lower rates for the ones left standing. That makes sense to me, since to be honest, there are more poor performing realtors than professionals. No other industry compensates the same no matter what the skill level is, no matter the region being served, no matter what the sales prices is v. effort required to complete the task.

Well, it's done. I'm supposed to be decelerating and there we go launching a new business (and buying some more land in Kerhonkson, and getting a few houses started in Sullivan County). This modular container pool thing just seemed like to good of a fit for what I know of the upstate homebuyer to let it go uninvestigated, and once a entrepreneur-minded person sinks his teeth into an opportunity, well, lets just say, it's a slippery slope indeed.

So check them out, vetted the distributor/creator, bought one myself, had it shipped and now we are installing it a spec home in Olivebridge NY. The process thus far has been what I had hoped and the idea that you can have this thing installed in a day, and be swimming within 2 weeks is pretty fantastic.

The plug and play attribute - meaning all the systems - water heater, filtration, skimmers, electric are all set up, and you just bring the juice/gas from the house and it's ready to go.

The ability to add spa seating, jacuzzi area, and even windows into the container make them versatile without being onerous in the decision-making column. All the mechanicals are included and ready for a plug and play hook up.

Fun article in the Washington Post about Bungalows with great vintage photos that we borrowed the style for a pool company. It's an interesting read for a Catskill-ite because since it's not the regional NY Times which assumes a generic knowledge of the Catskills and it's past, the Post has to put the area in historical and geographic context.

Bungalow Colonies

I’ve read and listened to lots of explanations about what the recent legal decision about real estate and realtor compensation means, and I can’t say I still quite understand what it all means to me as a builder, me as a real estate broker.  What I do know is that any decision that peels back the monopolistic and anti-competitive aspects of buying and selling a home is fine with me - it literally makes no economic sense that every agency in the country charges 6% - that makes no sense that compensation percentage doesn’t vary region to region or brokerage to brokerage.  No other service or product has a sticky, shared price for their services, be it legal, cleaning, trucking, book-keeping and every other product in the world.

(converting my 2 car garage into a big recreation room and then building a new garage to house the vehicles. I've been farting around with my house and property since I bought it in 2018, when we moved to Milford for the school district).

Clearly there is little reason that Hudson Valley realtor made 6% when house prices were at $525k and now that that same house is $850k, they are still charging 6%.  Clearly there is no more work being done, advertising costs the same, ‘keeping the lights on’ isn’t that much more expensive, and since all the agents are self-employed contractors, the costs of insurance, payroll, and benefits haven’t played a part.

It’s just a weird industry with upside down incentives, charging way too much for what they do and offer.  And the idea that someone with 20 years of experience and hundreds of deals under their belt charges the same as someone’s first deal is nonsensical.  

I guess the legal ruling has something to do with the buyer’s side of things, where the seller of a house is no longer forced to pay the compensation for the person buying the home and their realtor representation.  That creates problems since when the seller was paying, then the buyer could wrap the whole thing up in their mortgage, but now they will need to come with extra funds, outside of their mortgage, to pay their representation.

All in all, letting the free market work with most likely create all sorts of new arrangements, fee schedules, and representation strategies.  Probably will drive a few people out of the industry, which will create more business for those that remain.  Who knows, maybe it will drive a bunch of people out of the industry.

I know for me, and how hard we work and the real effort we put into creating a successful project, to see someone want to take $50k or $60k just because someone happened to call their brokerage and wanted to see our home which then sold itself, the value proposition was always ass backwards and without economic logic - the definition of a monopoly.

Not quite sure how it’s going to play out, but for has the potential to shake up the real estate industry for sure.