The Wealth We Create
I'm astounded at the wealth Catskill Farms generates, near and far. Real estate commissions on our resales, return on investment for our clients, wages to our employees, traffic for our local businesses in a 90 minute radius, tax for schools and towns, interest to banks, premiums to insurance companies, $1m a month to assorted businesses. This might not be a big deal in the scheme of things, but in our little pond, it's more than a ripple of impact.
It's even more pronounced now, in this pandemic era, with more liquidity and sales in the marketplace. Money being made all over the place from our homes, our resales, our marketing. It's eye-popping actually, even for someone like myself who was aware of the fact beforehand.
What causes me to comment is the relisting of one of my homes that I sold for under $460k now being priced at $850k. Sure, there is a pool, some stonework, etc... It's a nice abode for sure, but it's shocking to me on how slim our margins are/were - it's a tough marketplace and navigated it carefully, but now for it's easy for a broad range of real estate related businesses, and frankly, it's a little disorienting.
But not hard to understand for anyone with a basic understanding of economics - stick 500,000+ new people in a marketplace that only had 100 good homes to begin with, and really the real question is, where will prices plateau, since the imbalance is so extreme, and the buyers so motivated.
Catskill Farms Launches its New Website
It's hard to quantify the degree to which our website deletion by the morons at Applied Innovations led by Jess Coburn disrupted our business, but 8 weeks later, we finished the heavy lift on a vision and execution of our new website, that can be seen here at www.thecatskillfarms.com. It turned out great, on many levels, and the idea that it was going to turn out great was by no means assured or guaranteed for a host of reasons.
Nonetheless, it was a huge distraction, and energy suck. My one colleague has not really worked on anything else for 8 weeks, uploading content, and that effort has been augmented by my own daily macro guidance and micro troubleshooting, and on occasion the other 3 people in the office would pitch in, like last Thursday, where we all pitched in.
Of course, for each minute spent on this, there is an opportunity cost of not spending it on something else, be it a client, a sale, a hire, a problem, a solution, an idea.
What made this even more challenging is the fact we were wholly unprepared for it, and a creative exercise like this is typically layered with a lot of brainstorming, branding conversation, directional ideas, visioning, evaluation of what works and what doesn't on the old site, as well as a process for interviewing and hiring a company to handle said task.
As anyone who knows the digital space at all, there are all types of solutions out there - solutions with their own language, their own terminology, pluses, minuses, drawbacks.
I'm an old hand at hiring, which mostly means I know I'm only going to get it right about 30% of the time. With office employees, it's a real disruption when I get it wrong, since it's a small office and the investment in anyone new is pretty large, and the weirdness of having someone in our space is always tough on the culture. With carpenters, I typically just say 'show up, and let's see what you know'. With subcontractors, even if you hire right, there is bound to be miscommunication with anyone new because we have a lot going on and judgement calls are made daily, some right some wrong.
The risk on a exercise like this one - reinventing a space 10,000 people a month visit, a space that defines who you are, a space that is expensive to create - is fraught with challenges, and I'm happy to report we nailed with not just with the vision but with the hire we selected, Steve, from outside London, who we found on upwork.com, a site a client of mine recommended.
How did we select Steve from outside London with live in girlfriend and baby? We put out a query on upwork, and I used my finely tuned ear to find a good match. My colleague Kacy steered me away from some bigger firms who would've wanted to offer more than we needed.
We were trying to update our website, without losing the feel of the site, which is a lot like the feel of our homes - comfy, working, fun, cool, thoughtful, not too fancy, not too showy. It's an improvement on what we had, my old partner of 20 years, a website that was added onto, patched up, greased up, so often it was like a pair of jeans, or boots, or anything else well-loved, and hard worked.
There's a lot more to this story, from a business vantage, that I hope to get to soon.
Catskill Farms Resales flying off the Rack
Few things prove your legitimacy in my business like the value of your homes when they resell. And based on what I'm seeing over the last 3 months across 3 counties, not only do our homes hold their value, they are the most sought after product on the market. The quickness they are being snapped off the market, and the prices that are being paid are hard for me to intellectually accept, having priced homes for 20 years.
In Rhinebeck, a house we sold for $650k, went full price, within a month, for $950k.
In Woodstock, a 1500 sq ft home we sold 5 years ago new for $385k, is in contract for close to $700k. Another in Olivebridge, went for $715k, and one I sold for $400k a few years back is now trading in the $700's.
In Sullivan County, on Mail Road, the location of my first 9 house project back in 2004, 3 houses just traded in or near the mid $500's, prices that could never be imagined even 3 months ago. Sullivan is always a treacherous market, illiquid, inelastic pricing, hard to make a buck. Not now.
Few new homes going up in Callicoon NY.
As a student of economics, I don't think these people are 'overpaying'. The demand over supply is so lopsided that pricing is on a real upward trajectory.
As a guy who prices homes 8 months before I monetize them, this has been tricky, so see homes half the size selling for $200k more than my new stuff. While our April - June stuff might have gotten mispriced a bit, our new stuff we are bringing to the market will be closer to what the market will bear, but to be honest, I don't think I'll shoot the moon like some of these realtors with my resales - I like to leave some $$ on the table for my clients.
Adapting to the new pricing reality is a big bridge for me to cross - I've been pricing homes for 20 years, moving them off the inventory shelves with a bunch of effort. To see it get this easy is hard to fathom, and gives me nostalgia for the old days when only the best could navigate the Catskills' real estate market of new builds and flips.
I'd post some photos of the above-mentioned homes, but my old website doesn't work. 8 weeks and counting. Ready to launch the new one - tons of effort but turning out nicely.
Labor Day 2020
It's a cool morning, you could feel the drop of temperature a few weeks ago. Still hot during the days, with bright sunny days, but the mornings and evenings reflect the temperate nature of our climate and the wild 35 degress to 80 degree swings a fall day can bring in the Catskills.
The thing about problem-solving is the process you use to solve said problems. Business is, fundamentally, problem-solving (maybe life too, but that's someone else's purview of expertise). And as I have been writing repeatedly, Catskill Farms has been beset with problems. Many of these problems are the result of being busy and building a bunch of homes, and while not readily predictable, you know they are coming in one fashion or another. You might not know when, or what, but you know on any given day, they are a comin'. With these problems, we have a solid set of professional relationships - banking, insurance, surveying, engineering, trade, supply chain, etc..., we can leverage and deploy quickly in order to remedy and solve.
The other set of problems, the black swan problems, pose more of a hurdle, burden, and risk. Typically new and unseen before, typically serious, typically disruptive. Could be key-man/woman employee related, could be pandemic supply chain, regulatory, could be inflation, technology, illness, accident, etc... Could even be your website of 20 years that has been a friend and partner was deleted by the morons over at Applied Innovations.
As the leader of the Catskill Farms, with my hands and brains and backbone still fully employed on a daily basis driving this machine forward, I've been confronted with both. Interestingly, many of the former used to be unexpected and grouped with the latter, but once you confront and solve a few times, they become annoying, distracting, and sometimes expensive, but still not a complete surprise. The black swan events, the new problem (which can be bigger in scale as we grow bigger) poses unique challenges because it's new, there is no roadmap for solving, and typically in a small company there isn't bandwidth just laying around waiting to be deployed to solve a new problem, especially a big one.
Now that I'm on the backside of solving literally a half dozen of 'exact same time' big problems that need to be solved now even though you are busier than ever, I remember how I do so, over the years, developed a process, many times subconscious, of working my way through big problems.
1, you have to believe you have the talent to solve them. 2, you have to give yourself the time to digest and acknowledge the true impact of the issue, 3, you have to accurately measure the damage, delay of the issue even if solved quickly, 4, you have to prioritize accurately, 5, you have to communicate to those impacted if required, 6, you have to solve.
It's like an onion inside of an onion inside of an onion. The collection of issues/problems is one onion, that you have to peel away layer by layer to analyze each respective problem individually. Then each problem is its own onion which needs to be peeled away and solved, with characteristics and problems unique and individual. And with each small success with confronting a layer, the confidence and momentum builds that the individual issue can be solved, and leads to the confidence and momentum that the collection of issues can solved.
It's take time, which has to be found, since it's not typically laying around unused. It takes energy, which is tough since a lot of us are running at full capacity (especially during the pandemic), it takes creativity, which is difficult to summon out of thin air unexpectedly, and it takes risk-tolerance, since the outcome of many proposed solutions are not immediately clear if correct.
Basically, when shit hits the fan, are your instincts and prior lessons learned on point or not? It's the difference between success and failure, delay and progress, redemptive chaos or ship-sinking rocky shore.
Personally, we've used the peripheral chaos that engulfed us over the last 6 weeks to reinvent several aspects of the business, and most rewardingly, found a few employees who either stepped up and flexed skills we did not know they had, or inserted into our company new persons, contractors, etc... who have turned out to be good folks to know.
All the while not missing a step of home production, and future home planning.
