The Upside of the Downturn
Of course, we’re all scared silly, deer frozen in the headlights, and all that. But the Millbrook-based architect James Crisp, a longtime observer of the ups and downs of the region’s fortunes, asks us to consider a few facts: “Prices are cooling for both property and building materials. Mortgage rates are down. And even the best contractors and subs are sharpening their pencils and bidding more competitively than they have in years.”
Could it be that, above the din of quaking knees and chattering teeth, opportunity knocks?
Before and after the intervention of James Crisp Architects. After photographs by Rob Karosis.
Crisp’s client Carol Smerling knows about downturns. She bought her own house, featured here, during a slump in the mid-90s. At the time, friends told her she was crazy to pay so much. True, the house was both too small and a wreck but it was also in a great location and came with twenty-five beautiful acres. So she took the plunge. The price: $325,000.
In real estate, as in most risky endeavors, you may have to suffer looking like a jerk on your way to being crowned a genius.
Though he designs his share of houses from the ground up, Crisp has gained particular renown for his ability to transform even the most ungainly prospects into the sort of sprawling, many-gabled-and-dormered neo-classical houses that are the pride of the region. “We respect vernacular architecture, the precedents,” he says. “We also believe in modern living, but we try to make the exterior fit into its context.” With the Smerling house, the facade remains compact; most of the additional square-footage shows only in back, above.
Of today’s real estate market Smerling, an associate broker in the Millbrook office of Houlihan Lawrence, observes, “There are plenty of buyers out there, and there are plenty of people who want to sell, the only sticking point today is price.” She estimates that prices have plunged 30% from their 2007 high and cautions that, historically, markets recover slowly. In other words, prospective sellers determined to hold out for a turnaround and wannabe buyers just as bent on waiting for the market to hit rock bottom both better be prepared to hold their breath until they turn blue. Of the downturn in the mid-90s when she bought her own property, she says, “We didn’t fully recover until 2004. Wishing you could get the price for your house you might have gotten two years ago? It’s like wishing you were 20 again. Even if we somehow manage to find a buyer willing to pay your price, it’s not going to appraise for any more than the price of a comparable property sold in the last six months. Today, you not only have to persuade the buyer, you have to persuade the bank.”
“Carol had specific needs: she wanted it bright, she wanted the view open to the back of the house, she needed stone tile because she has lots of dogs,” says Crisp, “and she needed lots of land because her avocation is rescuing donkeys that are on their way to the slaughterhouse.“
Sarah Ferris, a kindergarten teacher at the Vail Farm Elementary School in Lagrangeville, searched for a year and a half before recently buying her first house. “It was built in 1980 and the original owners, who are now elderly, needed to move quickly, so they priced it to sell. The place needs updating, but given the money I saved on the purchase price, I can afford to do the work.” Neither Sarah’s father, nor her brother or sister, all of whom work in the family business, R. Ferris Real Estate, advised her to hold out for a better day, when she might get an even better house at an even lower price. “The time to buy,” she says, “is when you still have some job security.”
In addition to benefiting from low interest rates by acting now, Sarah also can expect to save on building costs. According to Tom Bartram, an Architectural Rep at Herrington’s in Lakeville, framing lumber, plywood, and drywall are down 40% from their all-time high in 2004. And the “lumber composite,” an industry gauge of the cost of lumber per 1,000 board foot, is under $200 for the first time since 1996, down from a 2004 high of $475. While some of the materials Sarah will be needing remain expensive (“Manufactured goods seldom show deflation, so don’t expect reductions in doors and windows, for example,” Bartram says. “And asphalt roofing also remains high due to a shortage of raw material.”), her labor costs also should be comparatively low. “There aren’t as many people doing repairs right now,” she says. “You’ll get a lot more for your renovation dollar.”
“Carol loves to entertain so she wanted one grand space,” says Crisp. “The central part has a soaring ceiling, but the kitchen, on one side, and this cozy sitting area, on the other, both have lower ceilings.”
Which is why Crisp can credibly argue that, for anyone who qualifies for refinancing, there’s seldom been a better time to take on a major renovation. “You may not be able to buy much around here for $400,000,” he says, citing the maximum amount that can be borrowed at today’s most favorable rate, “but you sure can do a lot of renovation for that.” All it takes is nerve.