Monthly Archives: July 2006

10 Dairy Road
This house, so suddenly vacated by its previous tenant, is back on the market for rent ($20,000 per month) or for sale ($5,200,000). A touch of psychological impact here, eh?

Broker/Buyer Etiquette
Another agent wrote to me suggesting this for a topic and it’s a good one. Except for vacant/keybox situations, house showings are done by appointment. The seller is notified, she tidies up the house, turns on the lights (if she’s smart) and clears out for an hour. So what happens when the agent and buyer pull into the driveway and the buyer says, “no way, let’s go to the next one”? At the very least, I think the agent should at least enter the house and sign in and preferably, both agent and buyer should view the house. Someone has gone to the effort to prepare for the showing and it’s just plain rude to blow them off. I’ve been fortunate in this regard and have always had clients who share my sense of courtesy but I carry a pistol just in case. I know of instances where the owner has been by the window, waiting for visitors and seen a car pull in, back up and speed off. That’s just mean, so don’t do it.

The More Things Change
From a previous column published in early February, 2005: “At the risk of offending my core clientele, the worst offenders of the “bid to lose” game are Wall Streeters who are convinced, all evidence to the contrary, that the market will soon drop and fear that they’ll look like chumps for paying anything close to the asking price.”

A year-and-a-half later many of those would-be buyers are still sitting on the sidelines, waiting for the bubble to burst. I hear from them, via Blackberry, every time the Wall Street Journal (or Barrons or whomever) runs another article on the end of the housing world. But if you read these articles carefully, you should be able to find distinguishing features. An over-building in south Florida, where a development of 500 homes is now offering a 10% discount is nothing like Greenwich, which has almost no land left for development and certainly nothing for tract homes. To repeat myself, real estate, like politics, is local. Homes should be considered places to raise a family, not speculative gambles. And, if you buy in Greenwich and stay put for a few years, history says that you’ll do just fine.

Sell That House
The market never slowed down last August but it feels as though this year we’re returning to normal conditions, which means we’re resting before September. But if you have a house to sell you might want to consider doing something to move it now: lower its price, accept a lowish offer that’s been hanging out there, paint the damn thing purple and donate it to charity, whatever. Because, come September a ton of new listings will apprear and your house is going to be at a disadvantage. So move it now or compete in September by pricing it attractively. I have heard that our average house only sells after its third price reduction. I’m not sure that’s accurate but most new listings have an element of wistful thinking in their original price and if that element has been wrung out of yours, you’ll look good in comparison.

Speaking of Wistful Thinking

A new listing in Old Greenwich appeared the other day. Just from its address, I thought that it had to be at least $300,000 over-priced for its neighborhood but I visited it to see if I was missing something. Nope; in fact, I raised my estimate of its missing the mark to $500,000. So one of us is stupid, me or the seller. I think the seller wins that contest because that same day I saw a new house, in a slightly better neighborhood, asking $200,000 less and another, far nicer renovation in what is a far better section of Old Greenwich asking $300,000 less. If an agent hopes to sell either of the latter she’ll show the first, first. “You don’t like this one? Then let me show you something better that costs less.” You won’t even need to read Real Estate for Dummies to make that tactic work.

Mysteries of the Internet
I use Googel’s free Gmail service and it does an excellent job of screening out spam and tossing it into a spam file. Recently about 90% of what lands there is Japanese spam, written in Japanese. I understand that it’s almost cost-free to send this stuff out but, even free, why would anyone bother mailing it to America? Someone has too much time on his hands.

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New Homes
I wouldn’t call it a glut, but there are 62 new (built 2005 or 2006) houses currently for sale, 44 of which are priced from $3,500,000 up to $14,500,000. Location, as ever, is the key to a builder’s success so I wouldn’t take a chance on an iffy-street right now. You’ve got a lot of competition out there, and judging from what I see going up around town, more to come.

Where Are We Heading?
An article in last week’s Wall Street Journal reported that New England is losing jobs, population and house sales. It’s a disturbing trend and I don’t think it can all be attributable to the horrendous traffic problems here in the southern tier. The Milken Institute (yes, that Milken, but never mind) ranks Connecicut as the 5th most expensive state to do business in, Massachusetts 3rd and New York 2nd (Hawaii wins 1st place but does anyone really move to Hawaii to conduct business? Aside from growing Maui Wowie?). One little bright spot for Connecticut is that last year we moved from dead last in job creation to 44th. But our Legislature will be back in session soon and I’m sure they’ll find a way to end that.

Are Prices Softening?
Lots of us realtors with buyers for clients can report that there’s a strong reluctance out there to make offers; the buyers are waiting for prices to fall. Because of our Board’s inability to match sales price to original asking price I can give you no definitive statistics but my instinct tells me that prices are still holding. Yes, a house on Riverside Avenue just went off to contract at a price at least 20% lower than first asked a year ago, but the fact that the house sat unsold for all of 2005, a strong market, suggests strongly that it was just mis-priced to begin with. Average sales price this June is 21.7% higher than June ’05 and, year to date, that average is 20.7% higher, so waiting hasn’t proved a winning strategy so far. But this much is definite: justified or not, there is no sense of urgency among buyers. Perhaps there should be.

6 Glen Court
My brother Gideon has the listing for this in-town property but I still like it. Five bedrooms, brand new kitchen and a terrific backyard, unusual for this area. All updated mechanicals, nice slate roof, asking $2,275,000. Seems about right to me.

Artificial Turf, Revisited
I heard from both the owner of the orchard Street house (not a condo, as I supposed) with the artificial lawn and its installer, Ken Gentile of Executive Putting Greens. Turns out, synthetic lawn turf may well be the future. Put it down over a 6” crushed rubber fill and you have a safe playground area that won’t wear out. Build, as Gentile’s company name suggests, a putting green that never needs maintenance. This stuff is completely different from the original Astro-Turf (which went out of business four years ago, I’ve learned). Manufacturers can replicate almost any type of grass, and do, depending on intended use. Las Vegas, to encourage water conservation, even pays homeowners $1.00 a foot to replace their organic stuff with artificial. I’m not necessarily sold on the concept but it is intriguing and if I had small kids or played golf I’d definitely look into it. You can find more information on the Web or call Gentile at (203) 496-0891.

And Speaking of Plastic
One of my clients asked if she should even consider any house with vinyl siding. It’s entirely personal, of course, but I side (pun intended) with Tom Silva of This Old House who says, “I love wood, but I’d rather spend weekends on my boat.” I think the solid panel version looks pretty good and, having spent countless hours scraping, sanding, staining and cleaning up after myself, I’d consider using it. You can’t get away with it on a high end house but I’m not a high end kind of guy, so that solves that. One caveat: don’t slap up vinyl to cover up peeling, blistered siding without first correcting the underlying moisture problem that’s causing your paint to fail. You’ll hide the symptom but rot the house.

California Dreaming
Did you see the New York Times article on Hollywood big shots erecting 30,000 sq.ft. mansions on 2-acre lots? All in one (crowded) neighborhood. Since every bad idea California comes up with – Scientology comes to mind – eventually drifts east, I have finally found something good to say about our FAR regulations.

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How Not To Price a House
I Toured a recent renovation with clients the other day that has been on the market since the beginning of the year. The clients liked the house but were worried that it hasn’t sold. “What’s wrong with it?” they wanted to know. When representing buyers, Realtors owe no duty to the seller, so I felt free to answer, “there’s nothing wrong with this house except its price.” Which is true, but to explain why the house didn’t merit its asking price, I had to point out all the cheap details that the builder had skimped on. For instance, there’s good vinyl siding: solid panels of shingle-look vinyl, and the cheap stuff: hollow, flimsy plastic. This builder chose the latter. There’s good molding, carefully installed, and cheap molding, slapped on by a butcher. Again, the builder went the meat market route. My clients weren’t deterred by all this and might even place a bid on the place but I was struck by the fact that, had the seller not tried to price his pig’s ear a silk purse, no explanations would have been necessary. “Hollow core doors? That’s what you get at this price.” End of story. So if you’re building with an eye toward resale, consider what price the location will support and build accordingly. And if you’re going for a substantial price, build a substantial house.

Riverside Lane
This street’s seeing an explosion of new construction, all priced near $2,000,000. Astonishing to me, having seen it for years as a nice little neighborhood of affordable capes. There are two houses going up right next to each other that are identical in every detail. I realize that the original veterans’ houses were also identical, so perhaps an argument can be made that the builder is simply respecting the area’s historical character but at these prices, I think he should have invested $40,000 or so and hired an architect to design two houses that didn’t jump out of the same cookie-cutter. You can get away with using a plan book when pumping out $100,000 houses but those days are over in this town, I hope.

Augustin Fund
Here’s the scoop on the fund established for John Augustin, the farmer on King Street who lost his leg last May: The First Church of Round Hill already has a charitable (meaning tax-deductible, if you care) trust established and, in the interest of efficiency, a fund to help Mr. Augistin pay his medical bills has been piggy-backed onto it. You can send checks, payable to Church of Round Hill with a notation, “John Augustin Fund” in the memo section, lower-left corner. Checks should be mailed to: June Marks, 33
Nutmeg Drive, Greenwich CT 06831.

Nice House, Gone
I meant to write about John Cooke’s (Prudential) listing at 4 Kinsman Lane when it came on the market this past February but it went to contract so quickly that I turned to something else. This was a 1910 house right off of Bruce Park. It needed some work (when you see the seller as “Estate of” you should expect that) and it had some road noise from I-95 but the house was well laid out and its location was pretty neat, assuming you like geese. In any event, the MLS reported it as sold last week. Sharon Kinney’s client won it in a bidding war at $1,361,000, a substantial increase over its asking price of $1,295,000. Smart pricing will yield that result.

Summer Doldrums?
Exactly three houses went to contract last week, signifying the start of the summer real estate market which is usually pretty slow. Of course, the week between school letting out and the Fourth of July is historically one of our slowest weeks (Christmas to New Years isn’t any more exciting) so you can relax a bit – the world is not ending. But if your own house is on the market and you’re wondering where the buyers are, here’s the answer: they’re away. But like the swallows of Capistrano, they’ll be back. Hang on.

But a slow market does make writing this column harder – maybe I’ll post the next one from New Mexico. Here are some numbers, though: 203 houses went to contract last quarter (through July 10th). That’s an 18% drop-off from last year, probably due at least in part to buyers being priced out of town (average prices keep climbing). Are we doomed? I think not, but I also wouldn’t count on seeing your house appreciate 25% this year. Which is ultimately a good thing; a dose of reality and common sense injected into the market never hurts.

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Stop Him Before He Kills Again!
In the aftermath of a Federal court’s ruling that the SEC lacks jurisdiction over hedge funds our would-be-Senator, Attorney General Richard Blumenthal has announced that he’ll seek to regulate them himself. How is this related to real estate? Simple: two-thirds of Greenwich’s commercial real estate is rented to hedge funds or hedge fund service industries, according to the recent Vanity Fair article on our town (surprisingly accurate, by the way), and 10% of all hedge fund capital is based here. I won’t try to guess how much of our residential real estate is owned by hedge fund principals and lower ranks, but it’s a lot. One of those people, a client of mine, explained that the funds moved from New York to Greenwich when New York sought to tax the earnings of non-New York residents. They moved once, they can move again. All that’s needed to trade securities these days is a high-speed internet connection, something that is as readily available in, say, Colorado as it is in Greenwich. I sympathize with Mr. Blumenthal’s desperate desire to move up in the political world, but destroying Greenwich’s economic base seems too steep a price for us to indulge his ambitions.

Insulated Concrete Forms
A reader brought to my attention a new house that’s being constructed on Bramble Lane in Riverside with what I now know are ICFs – Styrofoam molds filled with reinforced concrete. I was curious and looked the subject up on the net. While that hardly makes me an expert, this type of construction seems to hold promise. It is incredibly energy efficient and, because there’s no wood framing, the resulting house is impervious to termites and other pests. But I found enough horror stories out there to make it clear that you do not want to be the first house a builder tries this out on – there seems to be a bit of a learning curve. A Bramble Lane resident, also a builder, happened to be outside when I stopped by to see the project and he expressed skepticism while allowing that, in a place like Hawaii, where man-eating termites go through houses in a few years, it might make sense. And certainly in a place exposed to hurricanes, a house made from reinforced concrete sounds a lot more secure than a stick-built home. I’ll keep my eye on this one and tell you how it comes out.

Inventory
The single family home inventory continues to decline and is now just 9% higher than this time last year (533 vs. 488). That places us 18% higher than 2004 but, I’ll repeat, 2004 was the best year for sales in town history. I keep hearing of buyers who are “waiting for prices to fall”. They haven’t yet (we’re way above last year for both average and median prices) but buyers’ borrowing power has dropped 15% since last year due to interest hikes. So keep waiting – you’ll get less house for the same monthly payment but, by God, you won’t overpay for that muffler!

Still More Numbers
Sales this year, to date (and I dislike using sales statistics because they’re a lagging indicator) are 294 compared to 344 (all figures as of June 29) last year, or a 15% drop. Houses that went to contract between January one and now, 363 vs. 407, for a 10% decline. These are not scary drop offs, in my opinion. Price your house right, and it will sell. The only exception to all this non-alarming news might be the condominium inventory which is 78% higher than last year (160 now vs. 90 then) and sales/contracts are down 30%. There’s been a lot of new construction going on, and now might be a fine time to cut a deal with a builder.

752 North Street
When the purchasers of the beautiful 1839 home located at this address tore it down many of us were horrified. I, at least, was a bit mollified when a new, tasteful, modestly-sized house replaced it. When I toured it the other day, I learned for the first time of the ultimately futile struggle to save the original building. Sadly, the house was beyond repair and as walls were opened, new, ever more horrifying discoveries were made, necessitating still more modifications and demo work until nothing was left. But the new house is very nice and perhaps it will be as admired 160 years from now as the house it replaced. Barbara Zaccagnini listing, $4,995,000.

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