I had a very interesting chat yesterday with Chuck Petersheim, the founder of Catskill Farms, a very successful builder here. Catskill Farms, if you’re not familiar with them, builds new houses in a farmhouse, cottage or mid century style with lots of stylish details. They have the formula down and their houses are very popular, but they’re not cheap. On a $/square foot basis, they run about 10-20% more than other newer construction houses with similar specs (i.e. size, wood floors and siding, etc.). I think of them like iPhones of second homes. iPhone buyers can get other phones with similar specs cheaper, but they’ll pay a premium for an iPhone.
Real estate agents here can talk endlessly about why Sullivan is ‘depressed’ compared to other Catskills counties — high property taxes, the run down eastern parts of the county, or the lack of convenient public transportation, boutique hotels, year round restaurants or downhill skiing (take your pick). But maybe the real drag on the market is that we just have a lot of crappy inventory that doesn’t have a whole lot of appeal for the new generation of second home buyers. Give them a product they want, and they’ll buy it. Catskill Farms is a testament to that. Almost every spec house they put up is sold before it’s finished, and the handful of resales that have come to market have sold relatively quickly.
The “give them what they want and they’ll buy” adage isn’t limited to only Catskill Farms houses. There are other stylish houses with contemporary appeal that come to market here — and they, too, sell. Last year, when a post and beam house (pictured at left) with lake frontage on Swinging Bridge, came on the market it had a deal the first weekend. The sale price? $690,000. If there were a few more like this on the market, I could have sold them in a heartbeat. Over the past couple of years there were two small (2 bedroom) lakefront cottages on Amber Lake near Livingston Manor that sold for $400,000 each. Some people in the business here were shocked at the prices, but I got it. The houses were stylishly redone and hit all the check boxes. I have a few deals in process right now in the $400,000 range, and those houses have one thing in common — they’re stylish with that extra something that rings a buyer’s bell.
I don’t think Sullivan should be written off as just the province of bargain hunters. The buyers of these houses aren’t bargain shoppers. But they are discerning shoppers, and they want something cool, with style. The reason a lot of buyers venture further east may not be that they don’t like Sullivan County, but that they can’t find the house they want here. Sure, some complain about property taxes or the lack of a train, but for most, we just don’t have enough of a selection of houses that appeal to them. So when I lament every month in my market conditions report that I’m not seeing a lot of sales in the $300,000 – $500,000 range, it may not be that we don’t have buyers out looking in that range, but we don’t have the houses to sell them.
There are some limits to this argument. Sullivan attracts more moderate range buyers than some of the more ‘glamorous’ areas of the Hudson Valley. So the style buy tops out here around $500,000, although that isn’t a hard and fast ceiling for something special, like the post and beam barn on Swinging Bridge. Last year, there was a fabulous contemporary on Timber Lake that sold for $1.45M and a converted barn on 5 acres near Barryville traded for $750,000.
So maybe we don’t need more restaurants or wine bars. Maybe just need more great houses.