Newtown's Mirror On All Of Us

For those who follow my posts you will note that it has been a few more days than usual for me to write about the terrible events in Connecticut. For most of us our immediate reactions and our current views have changed. Our immediate response included disbelief, disgust and depression. These were mostly children after all. This is a reasonable response. Unfortunately the usual response immediately led to the placement of blame, the first and most obvious focused on gun control. Those in favor of more controls said it's time to change the nation's gun laws. The opposite side rightfully points out that these guns were purchased in a state with very restrictive gun laws and purchased legally. I'm not going to get into this debate. In my mind this was much more of a gun safety issue then a gun law issue but both sides have a rational point of view. I don't think anyone would disagree with the need for all guns to be locked up when not in use. Every day 34 people die in america of gun violence. Rarely are these guns taken from a locked case.

Some have extended the discussion to include other logical restriction or safety issues like renewing the assault gun ban, limitations on gun show exemptions, cooperation between localities, state and federal criminal databases, and the end of the sale of weapons of war and armor piercing ammunition, whose only use is to kill police officers. These are all important and maybe we will have this small window to put most in effect. I tend to doubt the cowards that serve in congress will find consensus, but we can always hope.

Finally, we see mental health issues on the table as well. In this case it is obvious that this shooter had such issues which fell between the cracks sometime after his high school graduation. It's hard to call it a crack when it is more of a canyon, but this canyon grew out of mistakes we , as a country made in the 1960's and 70's, and they have come back to haunt us. Before that time the mentally ill were mistreated inside terrible mental health institutions. It was important to change the abuse taking place in these institutions but the solution was at least as bad as the problem. As institutions were closed we saw the mentally ill become a large part of the prison population as well as a large portion of the homeless population. In 1955 there was one psychiatric bed for every 300 Americans. By 2005 there was one psychiatric bed for every 3,000 Americans.  Additionally, mental health was never considered part of health. Until mental health is part of our definition of health the problem will continue to grow.

As anyone who is part of a family knows, each family contains members who need mental health solutions. Very few get what they need. The Surgeon General's best current estimate is that 19% of all American's have some form of mental illness. If that sounds scary, it is because even the term “mental illness” presses some major buttons in our minds. While most are totally functional, it is estimated that 2.3% have work disabilities and up to 15% have functional disabilities due to their mental issues. In 1983 6.4% of inmates were considered severely mentally ill. Today that number is 16% and growing. Now more than three times more seriously mentally ill persons are in jails and prisons than in hospitals. The last time we have seen numbers like this was in the 1840's.

As far as our prison population’s growth, there are now more Americans in jail -- 6 million -- than there were in Stalin's Gulag, reports Fareed Zakaria, in a column called "Incarceration Nation." We have gone from 150 inmates per 100,000 in US population to over 760 inmates per 100,000. (An increase of 500%). In addition, a large reason for this explosive growth includes both the incarceration of both the mentally ill and those convicted of drug offences, both of which we know would be better treated in hospitals, not jails.

I could go on and on quoting both gun control and mental health statistics but  we all know that one important difference between the past and the present is that any solution today will require the reduction of costs in one area (like incarcerations) and an increase in others (mainly mental health and drug rehabilitation).  We are no longer capable of just throwing money at both. The results have been unacceptable. To change, as a country, we will need to accept a few realities:

1. Gun ownership is here to stay and a part of our american life. I live in upstate New York and almost everyone owns a gun. They use them to hunt, target shoot or just for protection. The left will have to accept this fact. At the same time most gun owners understand that none of these reasons to own firearms explain the sale of weapons of war, armor piercing ammunition or the need for high capacity magazines. We all give up some of our rights for the good of our fellow citizens. We can’t yell fire in a theater and we can have any kind of gun we want anytime we want. That’s life. It may not be fair be we can’t be spoiled children if we care about our children.

2. The war on drugs has FAILED. Period. It’s time to stop putting people in jail for what people have been doing for thousands of years and will most likely continue for the foreseeable future. We would be much better off as a county to keep these people out of our jails and in rehabilitation centers where they might actually get help with their problems (and save a lot more money as hospitals cost a lot less than prisons).

3. We must accept that health includes mental health. You cannot separate the two. You can not be healthy if you are not mentally healthy. We must take the stigma out of this disease. If you need a Xanax to feel less anxiety you should be no more ashamed of that than you would needing 2 Advil to feel less back pain. Mental health should be a right, whether you are a student or soldier, a minor or a senior. We all benefit when those that need mental health solutions get them.  No one believes that this also wouldn't save money. (By the way, both mentally ill and or drug addicted inmate costs the system more than “normal inmates”.)

The window is open. It won’t be open very long. If we don’t see the big picture now and let go of our biases and systematic denial of the facts we may never solve our problems. Americans have always been innovators. We have a history of creative problem solving. This is one we can solve. The President has requested that the Vice President report back to the nation by the end of January with solutions. If all of these issues are not part of the solution horrendous acts such as we have seen last week will simply happen again.

"I'm Not Giving It Away!!!!" (Economics 101)

For a real estate broker, one of the most common comments we hear is "I'm not giving it away." All good brokers get to be pretty good actors and actresses and hide their true reactions to that statement. I sometimes believe it's possible to track the marketplace by how often in a given period of time I hear that statement. The more I hear it the more I know it's a buyers market, the less, a sellers market. We are pre-programmed to want the best deal (for ourselves), and while we think we are all sensible data driven people, we are equally programmed to view data mostly from our biased point of view.

I partially blame our educational system. The lack of understanding basic economic principles starts in elementary school and continues through college. This failure to understand even the most common economic vocabulary terms (such as the meaning and use of the word the "Market”) makes matters worse. By definition, a "market is the process by which the prices of goods and services are established." To further understand a market, some additional information is helpful. For example, for a market to be competitive, it should have multiple players (buyers and sellers). If fact, the more buyers and sellers, the more "competitive" the marketplace. All markets should have as a goal the maximum amount of competition.

If the numbers on either side of a market transaction are smaller than the opposing side, it can become either a "buyers market" or a "sellers market."  This is not an opinion. This is simply the way the markets work. The typical pricing of a product or service includes the cost of materials, labor and a desired profit (or in the case of a service, the actual cost plus a desired profit). Under normal circumstances the only real variable is the profit margin, however in a market with a lack of either buyers or sellers, this formula may not work. If I want to buy a bag of popcorn in a movie theater I am likely to pay far more for this product then by simply walking outside the theater. Conversely  if you bought a parcel of land, installed the infrastructure, foundation and finally the house itself, its' cost would reflect the price of all those parts of the final product. It is assumed that these prices would be arrived at through a competitive process.

To further our example let's say that final cost of the complete house (including land and infrastructure) was $250,000.00. Two years pass and we find ourselves in a deep recession. The market which for the past several years always had more buyers then sellers and the price reflected this fact. The recession grows deeper and after two more years of falling prices the actual price of replacing the house has dropped 10% due to lower costs (both materials and labor) and a smaller profit margin. This new replacement price might be $225,000.00. In reality however, because the seller is now selling a "used" house and the market for these houses will have dropped far more the the 10% reflected in materials, labor and profits, but instead has dropped 25% (which would be $187,500.00) and as there are now far more sellers then buyers, a comparative analysis (actual sales data) shows this house would sell for approximately $167,500.00.

While most people understand the above example, for some reason when the real estate broker (under practices and principles in state law) recommends a listing price of between $170,000 and $190,000. "I'm not giving it away" is likely to be the response. It's now time for the popcorn story. Seriously, this exact conversation is taking place daily all over the country. While there are areas of the country that have recovered better then others, there are very few variations of this conversation.

Now I understand that for many people there are extenuating circumstances. Some may owe more then the current value, some may need to move to a new location for a job or some other personal reason, some may have assumed that when they sold their house they would have enough "left over" funds to retire or worse, retire and buy another house. All of these are understandable, but don't change the facts. I was offered $800,000 for my own home in 2007. I paid $250,000 for that home and have put another $250,000 into improvements. Even with all these improvements I know that I would be lucky to get $400,000.00 if I had to sell it today. That's a $50,000 real cash loss (and $300,000 imaginary loss) in my mind from the high value that existed in 2007.

Unfortunately markets are not nice. Markets are not fair. Markets are simply markets.  My way of advising my clients in these situations is to explain the above, adding this: "People fall into two categories, those seeking pleasure and those trying to get away from pain." You would think that those trying to get away from pain (like a potential foreclosure or just growing debt) would be the most motivated to end this problem as soon as possible, but you'd be wrong. I've continued to be amazed at people who really do need to sell their homes who fail to see this need and continue to price their home to high, above the market price (or current value). Some actually believe that they are "motivated" because every few months they reduce the price by 5% or 10% (while the actual market value is 15%-20% lower). Surprise, surprise, this marketing technique never works.

On the other hand, those that are pleasure seekers face reality and price their homes where the data shows them the market is. Some lose money, some make less then they wanted to but all move on with their lives. This is ultimately the question. When I sold my last house in 1986 I sold it for $350,000. It's worth 1.5 million now. I never look back. I never count my imagined loss. It made me able to move to my current home which I love and has now become the "family" home. I'm happy. Be happy. It's your choice.

Getting Away From It All

Everyone needs to get away from time to time and here in the northeast if you are the outdoor type you might be thinking snowboarding, skiing, hiking or some other typical winter sport, but you should know that other options are just as close and as much fun as the standard sports. Here in Greene county there are a number of large property owners that have created private cottages and camping sites available for rent at very reasonable prices. If you never thought of roughing it, don't worry, you can limit the "rough" part. Follow the links below to see spaces you won't believe available.      

One of my favorite such couples are Mark and Carin DeNat who have created an incredible country experience just 8 miles outside of Saugerties, NY called The Awakening  Garden. You will get to know Mark and Carin pretty well just from the beautiful way they have created this special place.  Carin (who was born in China and came here as a teen) is the gentle spirit that conceived and created this wonderful 98 acre site.  The zen touches makes this  a great place to breathe and retreat into yourself. Mark, a retired NASDAQ guy is the assistant who helps to manage and executes many of Carin's ideas adding his own special touches.

There are 4 options for both comfort and pricing, the least expensive being the Teepee. (That's right. If you ever wanted a completely unique experience for only $30 a night, this space is for you.) Even if you are tent people, let's face it, leave it home for this trip. If for no other reason then bragging rights, this is the ultimate tent experience. 

For a step up in comfort, take a look at the Twin Oaks Cabin. This 140 square foot cabin has a antique wood stove to keep you toasty on even the coldest winter night. The cabin includes a sleeping loft with a stained glass window that will bring the lights of the rainbow to your morning wake up. As is typical of all of Mark and Carin's spaces, this cabin has a beautiful rug and the colors of the cabin all lend an Asian feel to this space, sometimes inhabited by yogis from near and far, so the vibes are really good. The site also includes a great campfire site with barbecue. This cabin rents for $75 a night.

If you need a bit more space you might take a look at one of my favorites places, Thoreau'sCabin. Renting for $80 a night this cabin was made using many long saved recycled windows, doors and other materials, including beautiful stained glass. Spend the days under the tall tree canopy right outside your door, the evenings siting in front of the antique wood stove. With all  the windows on this cabin you'll love the view.

Finally, for total decadence try the Yurt with Bathhouse. Located on a separate parcel just 4 miles from Awakening Gardens, this is special place. Built to house family and friends, this Yurt is now available and priced at just $275 a weekend (in season plus a $30 cleaning fee). To truly understand the beauty and luxury of this yurt with bathhouse you should look at the tour to view each in the large format pictures and notice the beautiful touches the DeNats have added to this experience. (How many bathhouses have a sitting area and meditation space?) Take your time looking at this one. 

For addition information please call Carin DeNat at:(Cell) 845-706-0134  or email her at: info@awakeninggarden.com