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

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.

This home marries both the barn and the farmhouse idea, with a pretty classic front elevation and loft interior.  It was a gradual and years long evolution from a much smaller cottage people liked.  Sold last Friday to a client that has been with us from the beginning of the project.  3 bedrooms, 3 baths and 1800 sq ft, plus a killer large basement that can be built out over time.

There is a debate raging, a conversation taking place, about what the virus means to the Catskills housing and business environment.

Over and over again I hear about how glory days are here again as soon as the yellow caution flag is lifted, that both the local construction industry and the clients that support them are just sitting around revving their engines, ready to get back to business as usual, Engines revving and waiting.

The argument being used revolves around the post 9/11 surge the Hudson Valley saw in real estate, as people fled to safety.  The more I hear people talk about - and it really is the prevailing sentiment - the more I tend to be convinced, even though I don't believe it, if it's possible to have both those ideas/beliefs living together in the same home (my brain - believe me, anything is possible up there in those nether regions).  Families will seek the safety of the Catskills as the City becomes scarier.  It's a reasonable argument on the surface, if safety is the only input.  A lot of my daily conversations are with businesses that really need it to be true, so there is the real danger there that 'hope' is clouding 'facts'.

And personally, I fear the facts are in contradiction to this sentiment.  Primarily, this pandemic has permeated NYC and surrounding areas in a way that neither 9/11 or the financial crisis did. Most people who buy our homes are not bankers and finance people - they are musicians, chefs, bar owners, shoe store owners.  Many people who buy in the Catskills are being directly impacted by this shutdown.  Do I think Catskill Farms will continue to find a dozen buyers a year?  Yes.  Do I think the larger real estate environment up here will be impacted negatively?  Yes.

I think quite a few people/families who bought homes up here over the last 5 year - using AirBnb to hedge their bets and expenses - might end up losing their homes, but because of forbearance and other tricks this won't be evident right away.  This will have the 'positive' impact of freeing up more inventory, and subsequently reducing prices, which had gotten a little heady.

I think town offices - planning boards, building departments, health departments, town boards - will be so backed up when this lets up, if it lets up, that there will be a built in delay to any rebound as these people struggle through the backlog of permits and inspections.

Towns and Counties are going to get crushed by the lack of real estate transfer tax, sales tax, building fees, and the thousands of other revenue streams that are being decimated currently and for the foreseeable future.

4th, a lot of the reason people come to the Catskill is Community (with a capital C).  Getting together, doing small town things, dinner parties, festivals, concerts restaurants, parks, hiking.  What are the Catskills if you are prohibited from partaking in the essence of the Catskills.  Still has value, but much reduced.

5th, most of the small business community that make up the main streets of Narrowsburg, Callicoon, Woodstock, Rhinebeck, Saugerties, etc... are not in position to weather this cashflow storm, or if they do limp through, they are in no position to robustly restart and reinvest when this is over.  From a cash flow standpoint, it literally is like starting over.

6th, realtors can't even show homes, and when they can it will be different and less effective, and slower.  And sellers will be scared to have people in their homes.

And Ultimately, the new Catskills exist because a swagger and confidence that puts it on par with Napa Valley, Austin, Nashville and a lot of other very desirable areas - though I would argue with the deep bench of replacement players.  So when a long established business shutters, or a newly established business never takes root, the impact is real.

3 short months ago, my thought about the Catskills was that while it will never be wholly secure, a lot of the financial and personal talent invested over the last 10 years seem to have positioned us in a way that was a permanent step/advance forward, that even a step back would leave us many steps ahead (and that's new - before, recessions stole most progress) - and then here we have this black swan event that caught people unawares while they were doubling down in a go-go economic environment that looked to have long legs.

I guess the one argument I heard yesterday made some sense - that if you back up enough, you could see a whole new approach to living, where people who live in the city and play in the country, end up parking their families up here and traveling back and forth to the city.  this would make sense if 'social distancing' continues, because being cooped up in a tiny apartment with no parks and playgrounds would motivate families to make decisions and choices they never thought they'd be making.  While that may produce a vibrant construction and real estate environment, the pivot would be dramatic and painful and disruptive.

And I guess that's the thing we will all be coming to terms with as we make our way to Acceptance - challenging and changing the way we thought life was going to be.  A very tough ask for most of the upper middle class and above families who thought they had life by the tail.

It took Lulu, a very respective dog, years to make this move from the dog bed, to the chair, to the lower regions of the bed, to the upper section.

Here she is watching a solitary squirrel with seemingly no friends who has been hanging around every day trying to figure out how to access the bird feeders I hung.