Last year, it was the opening of Bethel Woods. This year its the potential casino. Both are events that are leading sellers to believe that property values here are on the cusp of skyrocketing into the stratosphere. Last spring, it was tough to make deals because sellers saw the opening of Bethel Woods as this magical event that would immediately transform Sullivan County and turbocharge demand for second homes. Now, the opening of Bethel Woods was certainly positive and did turn a spotlight on Sullivan County. But it didn’t create a real estate stampede, although I believe it certainly helped Sullivan County weather a price downturn affecting other areas.
Now there’s the casino, or at least a lot of indications that at least one casino is getting closer to reality. And like the opening of Bethel Woods, many sellers seem to believe that a green light for a casino will immediately translate into higher real estate values, regardless of type of property or location in the county. On a few deals my colleagues and I have tried to do lately, the seller’s attitude has been, "Look, a casino is coming. This is my price, take it or leave it." Since the beginning of February, there has been a 1.5% increase in the median asking price for a single family home here, rising from $245,000 to $248,500. This is up 3.6% from the $239,900 median plateau we saw through the fall. Not huge jumps, but is an indication of the mindset trend among sellers.
A final casino approval is likely to spike a few property categories, e.g. raw land in close proximity to the casino site that can be developed for hotels, restaurants and other services, as well as residential properties with rental potential as primary homes for construction and casino workers in the Monticello-Kiamesha-Fallsburg-Rock Hill area. But is a casino approval going to drive demand in the second home market near Livingston Manor, Jeffersonville or Narrowsburg? I don’t see it. Yes, a casino approval will shine the spotlight again on Sullivan County, and whenever we get a lot of news coverage in the city, it does drive interest, at least temporarily. That may translate into a few points on prices, not 20% or 30%. Its not going to magically make a 1,500 sq. ft. vacation chalet style house on 5 acres that might have a value of $250,000 today worth $350,000 tomorrow.
I think the next few months could be really tough, because sellers who can do so may be holding out for the casino green light. We also may see a drop in inventory, with sellers taking a "wait and see" attitude, pulling houses off the market or delaying putting their houses on the market.