Waynesword Summer 2008

O Celebrate, we will…
‘Cuz life is short but sweet, for certain…
We climb on two-by-two,
to be sure these days con-tin-ue…

things we can- not change…
--Dave Matthews, Two Step

IS SARATOGA IMMUNE TO THE ECONOMIC SWOON?

In July the backdrop of summer is defined by the sitar-like hum of locusts droning, high and low. The hoof beat thunder out on Union and Nelson Avenues is not far behind. If the car- and foot-traffic on Broadway and the side streets of downtown are any indication so far, no one is using the gas-price hike crisis to stay away from Saratoga Springs—not that I’ve seen. And the host of people who show up here in August are those that are most defiant in the face of a sagging national economy —horse breeders and all the entourages that move with them, the high and low end bettors, the Orchestra crowd and the socialites, plus a bevy of jet-setters who are way beyond caring about the price of fuel for something as crude as ground-based vehicles.

The density of tourists and local people—it’s harder to tell them apart now than it was 20 or 30 years ago—may not presage economic boom-times while a recession erodes confidence elsewhere, but it helps. The shopkeepers may tell you that consumers are more cautious in their spending, not as freewheeling with their money, but at least we can see there is no lack of action in terms of bodies making their way along the streets. It’s seemingly the same in real estate—lots of looking, careful consideration of options, bargain hunting more than impulse shopping…Meanwhile, MSN Money reports in its July 30th edition that:

The number of people who applied for mortgages
plunged 14.1% last week to the lowest level since
December 2000, according to the Mortgage Bankers Association.

The Nielson Company reports that 63% of Americans say they will cut spending in the upcoming year.

Other statistics being thrown around, in the Times Union (Albany, NY) and The Daily Gazette (Schenectady) relate that home prices for sales in May have fallen 15.3% from the previous year’s level, according to regional reports in the MLS. Nationwide, median prices have dropped an eerily similar 15.8% relative to where we stood in 2007. Existing re-sales and spec home inventory is at an 11.1 month supply, at the current rate of consumption. (This is why the smart listing agents are more often taking 12 to 18 month-long listing contracts on homes.) The Wall Street Journal in early August noted that, as of July 2008, the percentage of vacant housing stock available for sale or rent was at 4.8% nationally, the highest figure in 33 years, (according to Zelman & Associates, a real estate research firm).

Grim news is everywhere on the economic front, but try telling potential sellers that in the greater Saratoga area and they will look at you as if you are suggesting they should slaughter their sacred cow for lunch meat. They want to be immune to the symptoms of the larger economy, and a few of them have indeed proven to be.

Aberrations still exist: certain homes or condos or pieces of commercial real estate are so well located or unique or well-priced that they will still “jump off the shelves.” But the vast majority of listings do not. Any Realtor in this area (and I suppose, others) will tell you in confidence (as opposed to being quoted in local cheesecake news stories) that the volume of business is just not there, not what it used to be. We all have to work a lot harder to get things sold, and despite our best efforts, some properties do not sell on the first or second go-around on the market. Some buyers we work diligently with simply do NOT buy no matter how many choices or enticements they are offered. This is the peril of our profession—that we can often spend immense amounts of time catering to those who will not reward us in the slightest. But that is the choice WE have made, and we as Realtors must become much more judicious in whom and what we choose to devote ourselves.

I am fortunate to have a core group of clients, investors, and home seekers, and a few motivated sellers who will respect my opinions and bluntness, and stay loyal to me in this business, and for them I am thankful. Many others will find me too irreverent, shall we say, and disinclined to tell them exactly what they would like to hear. That’s fine, as there are hundreds of other agents who will likely be happy to
indulge them in ways I don’t have time or patience for.

There will always be some agent out there who will blow smoke at you and attempt to humor you if you are an unrealistic Seller, and you will have many months to get to know each other. Meanwhile I would prefer at this point to align myself with the savvy buyers who want some intense and specific bargain-seeking—hunting for real estate truffles amid the mud of an over-ripe market. In virtually every price range, there are such truffles to be found. (I thought about posting “Wayne’s Best R.E. Bargains” each month on this web site, but why help the competition, or buyers who aren’t working with me? Call me if you want my recommendations.)

HOW DOES GAS PRICING AFFECT UPSTATE IN ’08??

Articles have appeared in local newspapers documenting how dramatically Thruway toll revenues have dropped in recent months. Independent truckers have staged protests to illustrate how badly their livelihoods are being hurt. Anecdotally, the crush of morning traffic on the Northway at commuting times seems somewhat lessened, though average speeds of those who still drive at a furious pace do not seem any slower.

Nautically speaking, I can tell you that, having recently returned from a camping excursion to the Islands of Lake George, boat traffic on that magnificent body of water up north appeared to be a fraction of what it was on sunny days in the past. The word at the marinas was that while boat rentals were still going strong, there was far less gas being sold to recreational boat-owners than in summers past. There were NO lines at the pump at any of the marinas we visited, and the dock boys seemed to be a lot less busy than in years past. If this is true of Lake George, I would think that the effect must be far worse at smaller and more remote resort locations. On the plus side, there was greater serenity to be experienced up in the lake country as a result, especially mid-week. There weren’t as many rowdy campers or volatile booze-fueled boaters as we’d seen and heard in summers past. As opposed to coastal traffic jams and competition for space on the east coast beaches, there is plenty of peace to be found in the Adirondack region for those who can afford the time and gas to get there.

Special events at SPAC (such as the two phenomenal performances by the Dave Matthews Band which I previewed last month) do not seem to be suffering for attendance—DMB fanatics in particular seem to be a devoted bunch who will spare no expense to be part of the LIVE experience. High-priced tickets for Sting’s reunion with The Police apparently had no trouble selling. On the other hand, the NYC Ballet’s attendance numbers at SPAC for their just-concluded season were reportedly much lower, particularly for the lawn seats. Of course a steady series of dramatic and unpredictable thunderstorms may have had something to do with that drop in attendees as much as the price of gas, or tickets. Rock fans are certainly more willing to risk bad weather at the outdoor amphitheater; it would seem, than the more genteel aficionados of classical dance. As I write this, it remains to be seen whether the Saratoga Racetrack will be affected overall by either gas prices, or muddy, lightning-laced weather. But even with the race-crowd I hear some grumbling's of declining attendance and handle. (In fact, the August 5th edition of The Saratogian detailed that attendance was down about 16% for the first two weeks of the track meet as compared to last year, and the handle was down almost 9%, both on-track, and from all other sources off-track).

ATTEMPTED SARATOGA SNAPSHOT SYNOPSIS…

In short, the traffic on Broadway—including pedestrians, automobiles, and ubiquitous horse carriages—seems unabated, if not heavier than ever. It will be interesting to hear from retailers and restaurateurs—and yes, Realtors-- after Labor Day as to how their seasonal receipts totaled up. NYRA’s overall handle as calculated at the end of the meet will also be an interesting barometer of how the local economy has defied national trends…or reflected them.

There are more restaurants opening or re-opening here all the time (Limoncello, after a massive renovation of a former Kentucky Fried Chicken building where Rte 50 meets South Broadway, and Il Chianti at its lavish new location at 18 Division Street, as two examples). The relatively massive & long-underway Hampton Inn on Lake Avenue has recently opened as well. Yet another Mall-area plaza is being
built near Exit 15, removing the last few original trees and sandbank buffers from a once-forested area.

Condos framed with cranes and steel I-beams are still rising downtown-- adjoining Congress Park (with multiple million-plus sales reported already), behind the Hampton Inn down on High Rock Avenue, and in a long-fenced lot on lower Phila Street. Perimeter condo developments on West Avenue remain in the Permit stage, with ground not having been broken yet. Empire State College is expanding on West Ave. in a big way, taking up what used to be empty pavement space at the long-forgotten “Jamesway Plaza” with another steel-girdered structure. Ground has been broken on South Broadway for what will likely be another brick-and-mortar medical facility. Southwest of the City, out near the County Airport, bulldozers have scraped enormous barren plots that will soon see the erection of monolithic apartment buildings – similar to what is already underway just north of the City in Wilton. Apparently, demographic prognosticators think our area is still going to see a boom in both condo- and apartment-dwellers in and around Saratoga Springs.

“Celebrate, We Will…”

Saratoga—like many classic American resort towns—has always had a reputation as a festive place, a “party-town” if you will—where people came to forget their troubles or indulge themselves lavishly with food, drink, entertainment, flirting, romance, betting, spa baths, people-watching, and diversions of all sorts. In times like these, its allure cannot be minimized or diminished…. if people have a “recessionary mentality” elsewhere in the country, as the Republican nominee Mr. McCain infamously declared recently, Saratoga would rather be the solution to that, rather than part of the problem, to whatever extent possible. On sunny days in the summer it’s easy to be optimistic, but even with storm clouds swirling overhead and lightning crackling in the distance, so to speak, we are determined to remain exhilarated with hope of a better day to come!

On that note I will check out for now, and be off to enjoy and prosper from the summer in whatever ways I can find, as should you.

See you with more to say in September!

Posted August 6th 2008