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Saturday, December 26, 2009

2009 Homes and Sales

It's Christmas Day and Lucas, Lisa and I are at the beachside Westin in Key West, just getting ready to hit the pool. We've been waking each morning and taking long walks and I have been mapping the walks extensively, attempting to walk on every street in Key West, much to Lisa's chagrin and embarrassment.

Key West is cool - neat architecture, neat little streets, new money, old money, hobos, buskers, a bar scene, and gay scene, a tourist scene and a couple of cruise ships land and debark thousands of visitors a day.

I had never been before, and can't say I'll be returning every year (say, like we did with Tulum for several years) but it's a neat little place with an interesting vibe. We also don't usually stay at full-on resorts either - but the idea of this jaunt was relaxation because it's been one hell of a busy year.

I love year end reviews set to music that you find on TV this time of year - retrospectives that count backwards the years best stories/pictures/songs/scandals, etc... This year is a real treat to lovers of this sort of programs because there are a lot of end of decade wrap-ups as well, this being the last year of the decade. So, it's really best case scenario - lots of wrap ups set to music and lots of easy living in south Florida.

I thought I would put together one of my own wrap ups as well of houses we built and sold in 2009 - just for fun, I thought I would include 2 from late December 08 as well (since it's my blog, I can do that). One of my goals this vacation is to relabel/recategorize all 400 blog posts from the last 26 months of blogging so they are easy to navigate and people can search my writings, musings, celebrations and rants more easily - and to also make that book planning easier when the publishers come knocking.

2009 was a great year for Catskill Farms, and when I say 'great year for Catskill Farms' I know that that phrase includes a wide range of persons and families - our customers who have purchased from us thus changing their lives for the better immeasurably, a lot of vendors who relied almost exclusively on us, our work to keep them busy and the bills paid, and our staff who in the face of the Great Recession were being rewarded with full time work, incentives, raises and lots of future opportunities.

Like I have said before, the Great Recession provided lots of opportunities for companies that continued generating sales - opportunities to buy services and materials for less, opportunities to find and hire labor that had not been available previously (including asking salaries that exceeded what we could pay), opportunities to buy land cheaply, opportunities to do more with less since our vendors were less busy and were thus able to give us more attention. I just finished reading an article about a computer data storage company whose mantra during the recession was 'not to lay off the programmers' because even though these were the most expensive costs associated with the company, firing too many would have cannibalised the company when the recession let up - so, sure, your operating deficits are higher then they would have been, but when business picked up, you had a full team to take advantage of the new demand instead of limping into the next cycle and the next cycle being half over before the hires were made and trained.

We used the recession to double in size, enlarge and improve our offices, buy vehicles on the cheap, build a new structure for cut rate prices, and start a new soy-based organic insulation business.

We also continued to market the hell out of homes - the first mistake usually made in a decelerating market place is to stop spending money on advertising. Two big mistakes companies are teased into making - firing too many good people where you start eating away at the muscle not just the fat, and scaling back your marketing - so no one knows about you and even if they do, you are just a shadow of what you used to be and even a healthy overdose of viagra can't spur the innovation borne over many years, cut quickly to save a business.

You read so much about small business not having access to credit or loans and that is one place our consistent growth over 5 years has helped us - our bank, Jeff Bank, has seen us borne, take our first steps, grow pubic hair, get turned down at the dance, graduate and get a good job. They know my business inside and out and they are a conservative bank - so to continue to surpass their tough credit criteria is always a check and balance that a lot of companies could have benefited from - it may seem at the time that loose money and lax credit is an easier way to build a business, but actually it creates dangerous incentives to grow to fast, to risk too often, to go for the fences with someone elses money. Thing is, during these booms, it's not usually the first, 2nd or even 3rd gamble that buries the speculator - it's that taste of inordinate profits that turns the conservative risk taker into a free for all speculator.

In the regional marketplace currently, Catskill Farms out markets and out performs nearly every company I know of - we are building 8 homes, which is a huge amount of construction for the winter months, for a recession, for the middle of no where. And since we continued to market our butts off throughout the last two years, we have distanced ourselves from nearly everyone.

Now for the homes -

Back in December, 2008 we sold this 2 bedroom 1 1/2 bath 1300 sq ft cottage (see below) on almost 6 acres off of Crawford Rd to Nick, represented by David K. Nick works for IBM as a researcher and I was always joking him about working on the artificial intelligence program for chess playing named Big Blue. He denied it, but then eventually admitted to pitching in on the new program for a computer playing Jeopardy. Nick ended up buying another 12 acres from me that was surrounding his house so now he has pretty much the cottage kingdom of 17 acres, streams, stone walls, lake view and lots of great land just a few miles from Barryville.

Then Gayle of "standing in the woods with her friend Jamie and saying 'this is a no brainer'" signed up over the summer and worked with us on this 1100 sq ft pretty elegant, little house on 4 acres- a lot of fun working with Gayle and her expensive tile tastes, glass door knobs, big front porch that wraps around and just really nice simple lines inspired by my friend's Amy's house in Cochecton, NY.
Jeanne and Deb were also super educated real estate searchers (our favorite kind) when they selected Catskill Farms to be their builder and designer of their upstate dreams. They picked a house that I had designed a few years earlier and just really nailed it over the deep left center fence with their clean design aesthetic. It's just one of those houses you walk into and say 'wow, I get it'. (actually that's all of our homes).

This house closed at what was becoming an impossible mortage and real estate sales environment - the bank was calling these homeowners' employers the day of closing to ensure that they still had a job - the lending underwriting criteria had swung to the opposite end of the arc, with banks happy to reject and revoke loan guarantees and promises. It's a testament to how qualified our clients are - that we never relied on mortgage tricks to sell our homes. We demanded qualified clients with 20% down and good jobs, just as my bank demanded that I was qualified, so in effect we had created a very high quality pipeline of homebuyers and that made all the difference - because banks were lending to anyone but the best risks.
Dean also found us online and shot me an email late one night asking about our homes. In what is a consistent motiff with our sales success, he received a personal reply from me, an invitation to visit, and before you know it - a sales deal. I think I truly underestimate the value of me (the owner) showing the houses I build. People dig it - and it adds an element of trust/faith into the process that a traditional sales representative can't offer. In fact, our customers understand that I'm busy, and personally showing my homes adds a very time-consuming element to my already overloaded workload. I've probably worked 6.5 days a week for 6 years - 10-14 hrs a day. I plow my own driveways, I sell my own houses, I design and implement all our marketing plans and 199 other details that could be delegated, but only at a cost and a significant loss of 'ear on the track' knowledge that has enabled us to move into niches ahead of the marketplace.

Dean's cottage 13 was debated a bit since we didn't know if we should skip the number 13 like a hotel does with it's elevators - but in the end, Dean (now head of Levi's creative team) said 'if I'm supposed to by Cottage 13, then that's what I am".

Dean's house and interior design has inspired a lot of homeowners since his house was constructed. His clean and pure aesthetic melded perfectly with our clean and pure aesthetic and we created a home that will remain timelessly perfect.
Now, by the time Dean and Albert (see below) closed on their houses, the world had gotten ugly and pessimistic beyond any prediction - and here these guys were - buying homes, living up to their word, deciding to see it through - Since we were a different company last year, and had 5 house deals underway and since I was paying for each of them, if they started to cancel contracts like dominoes, Catskill Farms would not exist anymore. We would have been crushed pretty quickly - but we pulled through, and our customers have been living large in these unique homes they bought when no one was buying homes.

Albert's Farmhouse 10 is simply amazing. 10 acres on top of a hill, private, 1800 sq ft house, music studio barn. The black and white color scheme is one of my favorites. If you look closely you can see the elements that Bethel Farms and Irace Architecture tried to borrow on the cheap - destroying a well-designed home but trying to save a few bucks. This design is a classic, and it's a classic because design purity was paramount - Catskill Farms understands design integrity.
And then we started building this mid-century ranch - in fact, we started building it November 2008, and everyone thought we were nuts - underestimating the severity of the recession. They were wrong - I totally understood the severity of the recession, and by comforting myself with books of history and previous recessions/depressions, thought it was worth the risk to start 3 new homes without preordained buyers.

I mean, this is a hot house. It's unique, it's on a great piece of land, it's basement and future living space is huge, and it was relatively cheap. Erin, a young marketing executive, decided to buy it - it was her first visit, her first tour of real estate. We were just beginning, it was a cold day when she visited and the walls had just gone up. She had the vision.
Just down the street, Johnny and Tina found a 960 sq ft 2 bedroom home with a little stream that worked for them. And Johnny and Tina had been looking for years so when they decided to buy with us, we knew and were further affirmed that small well designed homes have a niche that was ignored by all the smart people. Actually, I don't know if the niche was ignored - it just couldn't be justified with any simple excel machinations that made all the other projects seem so doable.

One of the reasons that Catskill Farms has survived this downturn is because of our ability to hear what the marketplace is saying - never in our 5 year history did we try to shove a new price point down the throats of the lookers - if anything, we identified what the lookers wanted, and then worked like heck to develop a product that fit into budgets that were comfortable for them.

Boy was this like some sort of gift from above - I guess you could call it luck, but I suppose it really wasn't because when I bought the 44 acres and little cottage in March of 2009, no one else was buying land and houses with large parcels - No One. And since we were buying - or willing to entertain the idea of buying when no one was - and since we constantly do our homework based on previous sales so we know absolutely what we can spend on land - this little cottage on 44 acres was close to a deal of a lifetime -

First, the house that Nancy and Richard ended up buying was awesome - the type of house that has been our inspiration since the beginning of our business. 2nd, the land was perfect, all with road frontage and great attributes.
Cottage 21 was the 3rd and final home sale of the 3 we started back in December 2008 - validating our business model, and keeping us completely sold out. Norah and Jeffrey picked up this 1300 sq ft house with built out basement back in August - it came with 6 acres and views of a beautiful pond. The colors of these homes are plays off the primary colors - green, yellow and red. Risky, niche, but not too overboard.

Sort of like Restrained Risque Riskiness.
Then Justen and Jason landed into this mini-cottage back in October, which is a reduced version of Nick's. The idea is to place a small home with lots of detail on a great piece of land and do with affordability. And I would say splitting a monthly mortgage bill of $1000 in two is the epitome of affordability.

It's pretty amazing - a new home, with tons of character, on a great piece of land for $1000 a month.
And Courtney and Bronson picked this lot, and this 960 sq ft mini-cottage and tweaked some great design directions and ended up with a real winner. They closed in early October and were sharing wine with Richard and Nancy by weeks end.

Bryce and Thom - friends of Gayle - decided to follow in her footsteps and purchased a redesigned Cottage 13, adding elements like a wraparound porch, and a new interior layout. They closed in October as well.

Pedro and David visited us one day in August, and within a week had signed up for Cottage 23, a cottage that was inspired by a little farmhouse I used to pass on my way to breakfast in Damascus PA each Sunday. I think when they came up they were just farting around, but by the time they left, they were believers.

What was great about this transaction was that Pedro practices architecture so sometimes they can be real tough customers - but in the end, Pedro could not have been more impressed with our speed, quality, and pricing - and coming from someone who is in the trenches everyday dealing with the same hurdles I do, that was great to hear. I'm sure there are items that could be better, some things that could have been done differently - but as a whole, the process we offered him, the process we offer our wearied New Yorkers, is a serious process run with military precision, a zeal for artistic integrity, and a compassion for what our clients do not need - which, in a nut shell, is more stress and drama.

So, here we are. Taking the stress and drama out of building a home 2 hours away in the middle of no where. That's quite an ambitious goal we have set and aspired to attain.

Here's to 2010 - with some improved economic winds at our back, we should really be kickin' it - We are currently sitting on 6 contracts set to close over the first 6 months of the year, which bodes well by any measure.

PS - just realized I forgot the McInnes home, the Soronen Gothic, and the Petersheim addition and since I'm away I can't post photos but I will upon my return -


  1. Wonderful wrap up! Thanks for sharing. I really enjoyed reading it. Glad you are enjoying your vacation too. You earned it! Happy Holidays and see you in 2010. Jeanne and Deb

  2. Hey, Chuck.

    I'm looking forward to being included in your 2010 wrap-up!

    Happy Holidays,

    P.S. I'm now up to the beginning of September 2008 in my quest to read your entire blog from oldest to newest entry...