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

Luckily, and interestingly, construction is considered essential, so we continue apace without sneaking around in the middle of the night, or camping out at the site, both which we were willing to do to keep it moving forward.  We have 3 homes to close in the next 4 weeks, and closed on 2 last week, and I intend to meet the schedule.

Not easy however, with building departments in disarray, the board of health redirecting all their efforts to virus tasks, and the constant fear of new orders about what businesses are permitted.  But, as I predicted and hoped, the strengths of our relationships, the length of our relationships, our credibility across a wide range of municipal, banking, and construction departments, has paid off.  And lest I forget the most important ingredient - our clients, whose strengths as buyers bridge many unexpected issues.  I consider it all a competitive advantage, one that seems relatively unimportant until you need them, and then it's life and death, from a business standpoint.

We needed a septic inspection for a certificate of occupancy, we wanted access our unsecured credit lines, we wanted to close some loans, close some deals, close some houses, and really, it's happening.  We are even getting people to look at our new homes.

Not withstanding the 'good' news on our business front, the pain out there is real.  Out of cash, out of water, out of cash flow, out of work, out of school.

A hiccup on the economic relief package, though it seems to be reconciled now.  I agree with some last minute objections, where unemployment benefits would equal or exceed the actual paycheck, is a really bad idea.  Why would anyone work, or why would any small business fight to keep an employee on if they can make just as much on the dole?

Here's my exercise cabin I built on our property in Milford PA.  Great space for functional fitness.

A new farmhouse in Kerhonkson which will sell in less than 2 weeks.

and a painting from a young swiss painter I bought from my art broker friend Bryan, which just went from my miami beach condo to my Pennsylvania bedroom.  One of my favorites.

And french toast breakfast at the Petersheim Home School.  Frankly, in my opinion, it's amazing it takes 8 hours a day to run through their lessons, because lucas has doubled his learning in half the time.  I guess the inefficiency of educating large numbers defines education.  While I'd never do it, since the socialization is important, and sports and the whole thing, what I'm seeing, viewed only through prism of amount of learning, Lucas is getting a lot more education at home - plus i throw in some primary sex ed, combining art class with sex ed primers, with classic art as tools.

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A couple of observations.

1, because Coronavirus is spelled like the beer, it really facilitates the spelling of it without that dreaded redlined 'check your spelling' indicator.  Much easier than 'h1n1' or other number groupings that challenge us dyslexic people.
2. God, the 'we are in this together', singing from the balconies, feel good nightly news stories, #united, etc... gives me the squirmies.  I've never been much of joiner, and if you aren't practicing these actions as part of your routine, I doubt the sincerity of it now.
3. The amount of car commercials is insane - offer 120 days of payment free purchases with a car you can have delivered straight to your home - ARE YOU INSANE?  I know a lot of people aren't great at math, but delaying payments (with probably a bunch of small print like negative equity accrual) for 120 days does not decrease the eventual cost of the car.

On the front lines, we continue construction at full speed, well-funded with healthy cash flow.  We just sold a new house yesterday and we sell a 2015 Farmhouse resale today (my brokerage firm Lazy Meadows negotiated the sale).  We have 3 other homes more than 80% done under contract that we are focused on.  We of course aren't seeing a ton of new interest, since no one is going anywhere, and the 25% decline in stocks is a real kick in the pants, but less so than you would think for most people.  A metric I'll have to watch is the value of NYC real estate because if it declines 1, the net worth of some of potential clients will decline in proportion, 2, if prices decline some families who rent with buying always out of reach will be able to redirect their upstate budget to a NYC apartment.

On a small business front, I don't see how many of them survive.  I just don't think the President cares enough or is surrounded by enough smart people to engineer a plan that deals with the micro-issues of rent payments, tax holidays, interest payments, employee dislocation, etc...   A broad understanding and compassion for people  and their problems is needed.  Sending people a few thousand dollars is just nothing, since it does nothing for the job creators whose cash flow is strapped in the best of times, and actually does little for the people receiving the money.

We saw some worrying developments - the electric company that serves the hudson valley is not turning on any new electric services (don't want employees together) and the Board of Health is not doing any septic inspections, with all their energies focused on the virus.  Who knows when building departments will shut down.  Fortunately, we are proactively thinking these thru, and have the relationships to find paths that are still open.

Home Depot yesterday -

Signed for an online drawing course through Great Courses.   I tried to have my son take it with me but my god if you ever heard or seen a more reluctant student I just gave up.  He knows how to wear me down, dragging his feet like they are caked in concrete - damn kid.

All the milk I could find yesterday, which leaves me drinking black coffee this morning - not like the British rationing of WWII, but pain is relative and this is a tough shot across the bow.

For some reason i was telling someone a story yesterday of when I was like 9 and aimed my bb gun at a robin on a tree about 40' away ('never shoot a robin' echoed in my head).  Now mind you, I never hit a thing in my life but I lifted the gun, shot, and to my horror, the bird spiraled to the ground, a clean shot to the head.  Freaking out, I took the dead bird, and put in it the folger's coffee can bird house my younger brother had put in the tree as part of a boy scout project.  Luckily for me, he never refilled the bird house, but it did slowly rot all summer, radiating an odor we all commented on, serving as my Poe's beating heart under the floor boards.

I thought if I would tell the story an analogy to our current situation would come to me, even if it was a stretch, would come to me, but it hasn't.

But now I remember why I was retelling the story - after work I stopped by my ex's house and was throwing football and lacrosse with my son and she was using one of these ball throwing boomerrang sticks to throw ball to our dogs, and she thought it was funny to try and hit me - assured in the knowledge she had never thrown the ball anywhere close to where she has ever aimed - and she ended up hitting me in the thigh, just 6" away from the jewels, at a very high velocity.  It was like getting hit with a paint ball - it hurt.  

So, I guess the takeaway may be  - be prepared for inadvertent success and it's consequences.

Watching the news like never before in these uncertain times.  Glad I decided to go more liquid at the beginning of this year, keeping some powder dry.  Should help us navigate short-term and medium-term disruptions.  I have a lot of confidence in my business expertise, big picture evaluations, and decision-making, so while I hate to see this turmoil, I don't mind pitting my skills against my competitors during times that aren't perfect.  Anyone can look good when all the stars are aligned.  During the last recession, where we continued to build and sell homes, we built a gigantic market share lead that we never lost.  People still talk about how we were the only company selling homes back then.  It's when the depth of your team and relationships are tested most, and I have full confidence in my team, from our banking resources, to our contractors, to our clients, to my strategic and front-running pivots.  You find out who is swimming without trunks when the tide goes out.

Also, having a great sense of business history, business cycles, booms, bust and different types of recoveries, and having the perspective to put today's challenges in an historical perspective helps.  It's scary when you think 'this time is different', since whether it is for the good, or for the bad, there is typically many signals of caution and hope in things that have happened in the past.

There's a depression area story about 2 cereal brands who historically competed head to head - and when things got really bad, both had to make tough decisions about spending.  One company made the hard decision to stop branding and marketing, and the other made the equally tough decision to continue with that expensive expenditure.  Well, the company that continued to invest in its brand made market share gains that they never lost, even 90 years later.  No better time to brand when no one else is - it's cheaper, and there is less noise to compete with your message.

On Pine Lane, in Saugerties on the border with Woodstock, we have built 2 new 810 sq ft modern cabins on 1 acre each.   A new type of offering, meant to provide the Ulster County market with a more affordable option.

I've seen a bunch since I've been in business.  Saw the boom in the early 2000's which was frenzied enough to allow some space for a small fry to get in the game, bounce along the learning curve and come out the other side ok.

I saw the contraction of 2007-2013, where we were said to be 'the only company in the USA' still selling homes.  Granted that may have been because our client was a small narrow niche slice of Manhattanites who still had good jobs and their real estate held steady.  No lending, major stock declines, with only Triple AAA rated folks (ie., Catskill Farms' only type of client).

We've seen the 2014-2019 Hudson Valley boomlet, with competitors coming from all directions (albeit with mostly unsustainable products and price points).

And now the next one, which I've been waiting for.  didn't know what it would be, but history instructs us well on the inevitability of business cycles.  For while the symptom of the stock markets woes may be a cough and a sneeze, the root was sugar-high valuations just waiting to be spooked.

So, we are getting more calls, more emails, more urgency, as people plan for the worst, and are looking for the security a little home upstate can provide.

I definitely remember a few calls back when the world was ending 11 years ago today (low point of stock market), with frightened young families on the other end, looking for an upstate home, looking for getaway in case they need to getaway in a hurry if, as rumored, civilization may have been coming to an end as we knew it.

Though, I do have to say losing $500 in a risk free money market account today was a weird consequence of the panic.