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Monday, January 28, 2008

Wish Granted - Catskills Real Estate

Well, my wish came true about more bad news. New home sales are down 26%. What does that mean for me and my buyers - mostly, lower interest rates, better service from our subcontractors, and a more friendly and civil process with every vendor and salesperson we run into.

Facts be told, these figures have nothing to do with our limited edition cottage and farmhouses. We don't build overpriced vinyl sided cookie cutter suburban tract homes on 1/8 of an acre where you can see your neighbor cooking breakfast.

Honestly, I would venture the buyers of Catskill Farms' homes are in an enviable position. We have not seen any pressure on prices, and because demand is far outweighing supply, we are designing and selling houses at the same prices, or more, than we were a year ago. That's great news for existing and new customers, because, in the end, it means Catskill Farms is selling houses full of value.

It's actually pretty easy to quantify.
2 scenarios -
Buyer purchases their own building parcel ($65,000), buyer hires an architect ($20,000), buyer pays a real estate fee ($20,000), buyer pays for a lot of surprises ($25,000), buyer pays for a construction loan, and all the interest during the process.

Scenario #2 - Catskill Farms, always on the lookout for great property cheap, pays $25,000. Catskill Farms pays for the architect, our customers are finding us directly many times, Catskill Farms pays for all of the surprises, and Catskill Farms pays all the costs of construction and financing and taxes and utilities during construction.

For the exact same house, going it alone would cost upwards of $100,000 more. The fact that we have vertically integrated, cut out all the middle men, and passed on all the savings to our customers, has resulted in house values unaffected by the hurricane of bad economic news, mainly because, in a phrase, they are 'drastically underpriced'. Similarly, if the customer was lucky enough to withdraw their money from the market in order to buy the house, they are now insulated from the current violitility. Possibly there are 2 safe spots for one's money presently - cash in the bank, and a Catskill Farms home. This is said as a joke, but in reality, I would think it's got to be a good feeling to not only love one's home, but to realize that the idea and design you fell in love with is standing tall in the chaos of the present financial turbulence.

Today, Cheri decided Cottage 3 was perfect for her and her 2 dogs. She is going to be our 3rd full-timer in probably our most unique house ever. Rob and Leah and baby (not sure about the pet count) have firmly committed to Cottage 8, and Pablo and Ana are, I'm sure, checking the mail twice a day looking for the new designs we collaborated on.

I can only think of two words - "Rock On".