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Sunday, March 14, 2010

Playing To Win

Whoa, Momma. That was a busy week. Tactically, strategically, forward-looking business busy.

It's a real blessing (I like to use words like 'blessing' whenever possible because it seems soft and cuddly, and being both a student and appreciator of the blessed English language, I like to use words that accurately reflect me as a human being) - so like I was saying, it's a real blessing having this vibrant little home design company in these dark days of the Great Recession.

I would love to see a statistic of all those persons absolutely untouched by this recession. I think the numbers would surprise a lot of people. That's one thing among many that I have appreciated about my country living sojourn - we aren't bombarded by headlines - print, broadcast, etc... - so we are able to have some independent thoughts upmuddled by the oozing of mass media harassment.

It's so amazing how in front of the curve Catskill Farms was, and remains. I mean, I don't even say that to annoy all the people who routinely stick pins in my likeness - We really are so far out there in terms of understanding the psychology of the marketplace, not just locally but regionally and even nationally.

Sure, I know all the TV fame is now going to my head - but really, seriously, we've been ahead of the curve for years, without even really trying to do anything other than stay in business and stay out of debtors' prison. My good friend David keeps a great blog and is a big stats and numbers guy as well as big real estate gossiper. He actually holds a very interesting position in the local real estate community, a buyer's broker in a sea of sharky and not-so-sharky realtors. He talks to a ton of people, gets facts-on-the-ground info and news from a wide variety of sources and is pretty good at distilling all the info into trending analysis. Anyway, he tells a story that I used to call him up just peppering him with questions. Who's buying what, what prices are strong, what price point is the biggest mismatch between inventory and demand? He had distilled the raw data into great info, there for the asking, and I had to thirst for just in time, ACCURATE market data. I didn't try and make a market - the market was already there, albeit undiscovered and unpursued. Just the opposite of say a project like Bethel Farms, where the entire business model pivoted around trying to sell people land for 3x or 4x what it has ever sold for through clever marketing.

Well, you learn the hard way that consumers are smart. And creating a new marketplace is about the hardest thing to do as a business.

Well, enough about me...

My good friend David just reported that there were 16 sales in Sullivan County in February, and of those, 4 of them were over $250,000. Now, he doesn't include our sales in his numbers since we sell our homes direct to the customer, and he only reports sales through the MLS, meaning realtor-driven. Not to digress, but this small detail is pretty important since by cutting out the middleman, we reduce our costs, which means we can reduce the sales prices of our homes, much to the chagrin of our imitators. To continue, so we sold 3 homes in February, so there were 19 sales in February, and 4 over $250,000 - so with our 3 there were 7 homes over $250,000 - 3 divided by 7 = 41%. Catskill Farms currently controls 41% of the entire region's home sales above $250k in February. Now that's pretty amazing.

Wow, but like I said, enough about me.

It's Muddy. Big Time. You-come-home-muddy-no-matter-how-many-precautions-you-take muddy. What-do-you-do-with-the-dog muddy. Stay off-the-shoulder-of-the-road muddy. 3' -of -snow-, rain, -and -frost -coming -out -of -the -ground muddy.

It's Friday evening. I'm sitting in a small office in our 120 yr old farmhouse. Comfortable with its old desk, white radiator, lots of not-quite-art paintings, pottery, candle sticks and a pair of heavy iron black and white pig bookends. A blinking modem, a Canon Printer and a bunch of unarranged books.

Builder Magazine just annouced their New American Home last week. One year it was a green home, the next year it was a modulat - all these over the top media darling ideas of where housing is going next. This year, a simple gabled quintessential American home. Modest, good-looking and deliberately sturdy. A tribute and salute to tradition, attractive function over perfect form. Or even better, a product that the market has actually indicated it wants.

It reminded me of our homes. And trends we noticed 3 years ago.

Well-designed, modestly-priced homes on a couple of acres.

Well, enough about our cool homes and ability to see the future.

James, the resident real life 'Office' character and I were talking the other day about this email I got about a guy who wanted what we build, but did not have a ton of dough. Now, we've heard this before - when everyone was building and selling andbig home priced at $400k+, we counter-intiutively started building small homes at $325k. When that market seemed like it might tighten up, we figured out a way to sell our homes at $250k, and then $200k. Now, however, we want to try and figure out how to do it at $135k.

The Shack Chic Series, with individual homes named The Survival Shack, and the Love Shack, and The Retro Shack, and the Dog Shack, and the Getaway Shack. Down and dirty cool little shelters. 400 sq ft, little wood stove, septic, well, driveway and land. Insulation, wall board and planking. Cool homes stripped down, -plywood floors - a cabinet or two. Since land costs $45k, well and septics $12k, drivways and utilities $8k, foundation and excavation $14k - then you got to build the house. The best part about being in this position in business is we can experiment, see if it would work, see if there would be a buyer, see if we can make some dinero.

Big windy storms over the weekend knocked out cable, dsl and phones lines. Pretty spooky.

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