The first words of M. Scott Peck’s seminal book The Road Less Traveled are “Life is hard.” It was actually required reading in a senior elective at Villanova back in 1988. I thought of it yesterday as I was driving and I snapped the shot below, a sight all of us in the industry are familiar with: the road. It was hard not to take the photo- what lay ahead seemed to go on forever, framed by a pretty blue sky that seemed indifferent to my thoughts and concerns. 

Real estate, like life, is not easy. It is my career, my vocation, and it is what feeds and clothes my family. And right now, the industry is in a downturn with no short road out-it is what it is. However, like driving, I like it. And the times that it is “easy” or at least not difficult, are those times when I don’t resist the hard parts. 

I think that all of us in housing know this. It’s difficult when it is difficult, and it’s easy when it is easy. We just keep driving forward, eyes on the road and hands on the wheel, engaged, paying attention, and hopefully appreciating what we behold on the way. 

I hate to rain on a guy’s parade.

As a colleague from another industry sat across my desk, we pondered why his home, listed with another broker prior to meeting me, had not sold. Looking at the market activity, his bottom line and what it appeared he’d get were about $10,000 apart. My suggestion was to lower his price and be done with it. He was not excited about that prospect, and said he was considering renting the place until the market turned around. Among the first questions I asked was what his cash flow position would be if he were to lease the place. He thought it would be about $500, which would be a $6,000 annual profit. 

God bless him. 

Having done the landlord thing I knew that if the surface appearance of $500 positive cash flow simply compared rent minus mortgage, my colleague was in for a rude awakening. So we teased it out, and to his credit, he approached the discussion with earnestness -no easy task when it’s your place. 

Here’s a summary of what I told him could happen to that $500 every month, assuming *100%* occupancy. 

• Insurance. You have to convert your policy to a landlord policy for a non owner occupant. Does that raise or lower the premium? I think we know the answer there. 
• Water bill. Tenants don’t pay the water bill in a condominium, the landlord does. Who uses more water, renters or owner occupants? I think that answer is also fairly obvious. 
• Taxes. While they are often already in the mortgage, they tend to change in one direction only here in New York: up. 
• Routine maintenance. My friend is selling because he is buying a bigger home for his family. His new home with have a furnace, central air, plumbing and electrical systems which will require routine care. So will his old home. That fixed cost will double, unless you like living dangerously and don’t peform routine maintenance on the systems in a tenant occupied home. Which leads us to…
• Big Ticket items. A landlord with $500 cash flow is better known as a landlord who is one new furnace away from having his year’s profit decimated. The same goes for the central air, and things like water heaters and garbage disposals also chip away. You wouldn’t believe what tenants flush down the toilet and put in the garbage disposal. Plumbers aren’t cheap. 
• Tenant foibles. Like the great Derek Jeter, some things don’t show in the stats- you have to tell the story. Such as the following: 
  • Tenant: The dryer is broken!
  • Landlord: But it is 2 only years old
  • Tenant: It won’t heat up! I can’t dry my clothes! You have to fix it!
  • Landlord: I’ll be right over…
    Sure enough, the dryer won’t get warm. Until the landlord pulls out the lint screen, which by this time has a family of alpacas stuck to it, because the tenant never owned a home and always had a coin laundry back in their apartment in Yonkers. Yippee. 
    The landlord rationalizes he did not have to pay a repairman, and tries not to think that his quiet evening with his family is wrecked, or his tenant is a doofus. Kumbaya. 
• Wear and tear. Tenants have been known to punch holes in things. And they put flooring and painting contractors’ kids through college. Replacing carpeting eats away at cash flow. So does replacing broken windows floor tiles, and garage door openers. Trust me.
• Guests. Lovers. Grown kids and extended family. None of whom are on the lease, but often visit and never leave. And they have no accountability to you, but the neighbors notice. These are the hole punchers. 
• Pets. I could write a book on this one. Cats especially, for some reason, but say goodbye to the carpets. And yes, you’ll be repairing th hardwood too. And oh. That. Smell. 
• Security Deposit. Yeah, they’ll try to use that for the last month’s rent in some cases. Sorry. 
• Quality of life. Then there is the being joined at the hip to people who punch holes in things, run the furnace like it’s a rental car, run the water like they are baptizing the Philistines, and sometimes may not pay their rent on time or return phone calls. If you’ve ever waited in your car at 9pm waiting for this son of a person to get home so you can ask where the missing money order is, you’ll know it’s not cool like in the Sopranos. 

For $500 a month? No, try for NOTHING. Especially if you are in the 40% tax bracket. Here’s a better idea: If you want to get $500 a month extra, wait tables on the weekends. 

I topped out at 14 units 8 years ago, and I still get jitters when I hear the phrase “lot line cleanout.” If you are moving out of town, you’ll need to pay a property manager, which also effects the bottom line. Think about that if you are relocating from Westchester to Jebip. My colleague needed a far bigger margin or to just lower the price and sell it. 

If this sounds antithetical for a broker to talk folks out of real estate investing, it isn’t. I deal with professional investors, not weekend warriors, because the late night infomercials are a lie. 

I sleep better at night. I hope my friend will now as well. 

I’m not interested in discussing whether or not it will ever be Morning in America anytime soon, but I think we can all agree that it isn’t Morning in Real Estate right now. We are in a dark evening in some precincts, and from my observations the freaks really do come out at night. The red meat of the buyer pool is incredibly marginalized now, often paralyzed by a lack of confidence or financial setbacks, forcing many agents to work with what some might term “the bottom of the barrel.” 

In short, many of the buyers out there now were never people who would have been in the front of the line during the days of irrational exuberance. And sellers, who are in mourning over lost equity and often under their own financial stress, are often at their own breaking points. It makes for some, shall we say, interesting scenarios. 

• Take the case of the buyer who gets a perfectly good deal-a great one, as a matter of fact- yet they still have an adversarial attitude toward the sellers, as if they are owed something more. After weeks of increased demands on the seller, the deal implodes when the homeowner declines to put on a clown outfit and sing with a banjo. Apparently, a huge concession, some furniture, the tractor, snow blower and repairs aren’t enough, the seller has to live in a hotel for 3 weeks because the buyer’s rate lock expires too soon. Their agent, hanging onto their ankles for dear life (and a commission), never thought to help with mortgage financing for fear of being sacked. 
• The you have the cash buyer who runs all over town making offers of 65 cents on the dollar, whose agent proudly boasts “but it’s cash,” as if the term will perform a hypnotic jedi mind trick and convince the seller (and their lender perhaps) that the form of payment will trump basic addition and subtraction. Again, the agent is just happy to be working with someone, operating under an illusion that they’ll make a sale with this person because Cash is King.
• Sellers aren’t immune, we see  our share who are turning down offers an eyelash short of asking price because if the offer is that good, they must have been underpriced. And their Aunt Doris, who lives a time zone away and sold real estate in the 1980s, wonders aloud how they can take that deal if there hasn’t been an open house yet. 
• And then you have the lawyer, my personal favorite here in New York, who apparently lives in the illusion that it is still 2005, choosing an inane battle to fight to the detriment of losing a buyer with a full commitment. So what if the deck is illegal? Because, dear, banks don’t loan money on homes that are out of compliance. Now do us a favor and go back to writing wills for your bridge partners. 

With the closure and razing of the old building that housed Big Top and several other small businesses and their imminent replacement by Walgreen’s, the village of Ossining will have yet another “big box” drug store. Nearby Chilmark shopping center on the border in Briarcliff also has a proposal on the table for the arrival of the area’s second CVS, which will be at the cost of Prescriptions Plus. 

Those of us old enough to remember Arcadian Garden Center before the arrival of CVS might recall that there was a time when Ossining was well served by small, neighborhood pharmacies, and the populace got by just fine. I hate to sound like a curmudgeon, but other than occupying vacant retail space that the market appears to not otherwise fill, I am skeptical of the value brought by another retail giant.

The argument that they bring jobs is doesn’t resonate with me. The various stores in Big Top’s building employed dozens, just as Walgreen’s will, but there will be 4-5 fewer proprietors in our midst. Their accountability and civic presence is not something that can be measured in a spreadsheet. 

I remember as a child on Linden Avenue walking down Clinton to Big Top or Burd’s stationary for candy or toys. The storekeepers at places like Strictly Ice Cream (remember them?) knew your name. They were neighbors. This was especially important with how the now disappearing small pharmacies filled prescriptions, which isn’t always a smooth process at a larger outlet (and after 4 pregnancies in our family, that is no small issue). 

The utility for consumers will remain constant, although I am dubious as to how our quality of life improves with so many choices of where to get a gallon of milk, a greeting card, or shampoo. In a diverse vibrant village with so much charm and history, can’t we attract a more independent and varied type of business? Is local ownership dead? I hate to stand in the way of “progress,” as relative as the term is in this case, but can’t we do better? 

This is the market report for the Byram Hills School district (predominantly Armonk and parts of Bedford and Mount Pleasant) for the 2nd quarter of 2011. All information is for single family homes and is sourced by the Empire Access Multiple Listing Service. 

For the second quarter of 2011, 23 homes closed with a median sale price of  $970,000. 

For the 2nd quarter of 2010,  29 homes closed with a median sale price of  $940,000. 

Things look pretty steady here, with prices up a touch amd transaction total down some. 

31 homes are under contract with a median list price of  $1,250,000. 

150 homes are active with a median asking price  of $1,272,500. Inventory is high, but pending sales look to carry on in a relatively healthy volume. Armonk is home to IBM and is also close to I-684 so it is a very good commuting location. And the available inventory has some gems. 

To search for Armonk homes for sale like an agent, get yourself a free Listingbook account. 

This Market Report is for the Yorktown school district and all data is for single family homes taken from the Empire Access (formerly Westchester-Putnam Multiple) Listing Service.

In the 2nd quarter of 2011, Yorktown had 27 closed sales at a median sale price of $380,000.

In the same time period of 2010, 45 homes sold at a median sales price of $465,000.

Clearly, Yorktown is taking it on the chin this quarter. However, this quarter is being compared to the last stretch of the stimulus from last year, which artificially inflated the numbers. 

Currently, there are 26 homes under contract at an asking price of $397,464. If they close at an average of 95% of list price, that will put median value at just under $380,000. Values, therefore, look steady. 

There are 150 active and available listing on the market now at a median list price of $449,000. That means there is 18 months of inventory on the market, which is quite a bit. And judging from the median sale prices, the higher prices homes are not selling as well.

It is a good time to be a buyer. Is there an acho in here?  

Previous postings on Yorktown can be found here. 

To check out the 150 available properties Yorktown has to offer, register yourself for a free Listingbook account. 

Last year I did a blog post on the churches in Ossining. Today I’ll share some of the very beautiful houses of worship in Briarcliff Manor.

This is St Mary’s Episcopal Church of Scarborough on Albany Post Road (Route 9) right next to Sleepy Hollow Country Club. I love Gothic stone buildings like this.  

This is All Saints Episcopal, also in Scarborough at the Intersection of Scarborough Road and Old Briarcliff Road. This is moments from my home and is another gorgeous stone structure. 

This is Scarborough Presbyterian. If you’re seeing a “Scarborough” theme here, it is with good reason: Scarborough is one of the older parts of Briarcliff Manor along the Albany Post Road corridor, and this would be the logical place to build a church in the area’s earlier days. A quick story about the bell tower- back in college in the 1980’s, my friend worked a summer for an electrician, and he had to go up there for a job. Whatever had to be fixed up at the top first had to be excavated out from decades of ancient bird droppings. He decided that his father’s advice to stay in college and get a degree was good advice. 

Faith Lutheran is far more modern. As different as it is, it has always stood out pleasantly. 

Briarcliff Congregational Church is another striking old stone structure that is over a century old walking distance from downtown. A bigger building than a photo can do justice, I’ll post two. 

Congregation Sons of Israel is walking distance from where I grew up, and I remember frommy youth how the building has grown over the decades. It is another place with a larger footprint that is very pretty framed against a blue sky. 

Saint Theresa’s Roman Catholic is another stately, traditional stone building, but instead of slate the roof is tin! The front steps were just made for a wedding portrait, and I have driven past quite a few. 

I have left out Holy Innocents Episcopal, and I’ll try and add that in the near future. I love these buildings, and they are one of the prettier pieces of scenery for me as I drive around no matter what the season might be. 

This is the market data for the second quarter of 2011 for single family homes in Peekskill, and all information is sourced from the Empire Access (formerly Westchester-Putnam) Multiple Listing Service.

In the 2nd quarter of 2011 there were 14 closings at a median price of $239,500. 

In the 2nd quarter of 2010, Peekskill had 16 closings at a median of $267,500. 

Prices continue to slide in Peekskill, and transaction totals are also down some. It is a good time to be a buyer, and investors know this- there are 11 homes under contract at a median asking price of only $160,000. The less expensive inventory is all that’s moving. 

There are  73 active listings with a $290,000 median list price. That is over 18 months of available inventory at incredible prices compared to the bulk of Westchester County. 

I’ll repeat: Now is the time to buy in in this beautiful, historic town on the banks of the Hudson. Peekskill also has a plethora of condomiums as well, and I may post a market update on that sector also. 

Get yourself a free Listingbook account and check out homes for sale in Peekskill. 

Previous posts about Peekskill are here.