Monthly Archives: January 2007

29 Stanwich Drive
Renee Gallagher (Round Hill Partners) has just listed this house for $4,450,000. A great old house (1918) with high ceilings and very nicely renovated. It’s close to town but I think its best feature is its setting on 1.24 acres in an R-12 zone. It’s getting harder and harder to find a decent yard these days and, while I acknowledge that most kids are too busy with organized sports and Nintendo to actually play outdoors in their own yard, it’s nice to be able to offer that opportunity. Great house and, in my opinion, good price.

Poisoning our Minds
Did you see the story recently where some hapless homeowner dropped a rectal thermometer and spilled an 1/8 of a tsp of mercury on his floor? More than one hundred emergency workers responded, evacuated the family, donned space suits and cleaned up the mess, presumably using a single Kleenex. My former wife Nancy, a doctor’s daughter used to play with this stuff – rolling it into little balls, running it down inclines, etc., and so did the Fountain boys. Nancy turned out just fine, with no mutations, so the odds are pretty good that the substance is as harmless as most non-alarmists claim (we Fountain boys had other issues). I blame main stream media for collectively instilling an irrational fear in our minds of any number of toxic poisons du jour. Dan Rather, commenting on a teaspoon of dioxin spilling from a train wreck some years back looked solemnly into the camera and proclaimed, “Dioxin, of course, is the deadliest chemical known to man”. It’s the “of course” that slayed me – he was dead wrong, but anyone who disagreed was a no-nothing moron. These same people have taught us to fear urea-formaldehyde insulation, mildew, radon, asbestos, underground oil tanks, child abductions, and on and on. I think it’s time to get a grip.

Threat to Greenwich Real Estate Prices?
Okay, probably just a distant threat, but my less-than-favorite Senator, Chuck Schumer, has teamed with my favorite mayor, Michael Bloomberg, to release a report that the U.S.’s position as the world’s financial center is at risk because of the onerous effect of our strict immigration laws (prevents firms from hiring talented experts), the Sarbanes-Oxley Act (the post-Enron “reforms” that impose huge, costly accounting requirements on all companies) and a securities litigation explosion (no explanation necessary). Just as there is no longer a need for financial firms to be stuck in Wall Street’s canyons, hedge funds IPOs and other consumers of capital are free to roam the world for accommodating places to do business. I’m not advocating eliminating all regulation of our financial industry but the report’s statistics are frightening: in 2002 (these figures are all quoted from the New York Times) London hosted 3 of the largest 50 hedge funds and now has 12. New York dropped from 28 to 18, while Connecticut (Greenwich and Stamford, really) grew from 6 to 8. The U.S. controlled 16% of the global stock-offering volume last year compared to 57% in 2001, while Europe’s share has grown from 33% to 63%. Hong Kong and other Asian markets are seeing similar growth. Between 2002 and 2005, London’s financial work force grew by 4.7% while New York City shrunk by 0.7%. The two cities are now just about equal in financial service jobs: 318,000 in London, 328,000 in NYC.

While it’s true that Wall Street had a great year in 2006 and its profits are higher than ever, much of those profits were earned overseas. Greenwich real estate prices depend heavily on a robust Wall Street and if the combination of harsh national laws and increased Connecticut taxes (which are being touted in Hartford as I write) make it more convenient to do business elsewhere, the capital, and the financial industry, will move. That may please some of my liberal friends who’ll respond, “good riddance”, but it won’t help you sell your house.

Pricing Strategy
Put your house on the market in September for $8,995,000 and it doesn’t sell. Response? Raise its price to $9,995,000. That’ll teach ‘em. I’ve yet to see this tactic work.

Whole Foods is Hiring
And offering ten bucks an hour, plus benefits. We may finally see a drop in the number of licensed Realtors in this town.

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Two Nice Houses
Traci Vaccari (Round Hill Partners) has a listing at 94 Valleywood Road that I think is a good deal. Originally priced at $2,100,000, the owners have now finished the basement and dropped the price to $1,850,000, which should do it. Completely renovated in 2004, four bedrooms, 3 baths, good street and a decent, if small backyard. Only in Greenwich could this be considered a starter home but there you have it. Good house for a family with small kids.

And if, in addition to kids, you’ve got a whopping end-of-year bonus just sitting around catching dust, Mary Crist, (David Ogilvy), has listed 39 Doubling Road for $6,250,000. A 1930 Spanish style (says I – Mary claims it’s “English Manor” – go look and decide for yourself) renovated two years ago, this is a really nice place. Five fireplaces, a billiard room, for heaven’s sake, over an acre of land plus an addition acre of conservation land that’s nothing more than a huge, level yard you can use freely, pool, gardens and very close to town. Funny thing – in the early eighties I was in this house as a young lawyer conducting my first foreclosure sale. I haven’t been back until last week but the subsequent owners have obviously retrieved this beauty from its wrecked, awful condition and given it new life. Which is nice because I hate when bad things happen to good houses.

Oops!
Nationally, new housing starts are up for the second month in a row and unemployment continues to seek a new, low level, but pockets of the real estate market continue to suffer. The Wall Street Journal recently reported on a condo-glut in Naples, Florida, where speculators are stuck with un-sold units. One lady has seventeen of them – make her an offer. In Washington D.C., according to the New York Times, condo developers have also over-built and are now converting their projects to rentals, for far less profit or even at a loss. Around here, things feel much better. Maria Ruggeberg, of Raveis’s Greenwich office, represents developers of a number of Stamford condo projects and she tells me that the market is hot, with lots of pre-construction contracts, but single-family homes are languishing. Pure guess here is that USB and RBS are bringing in a lot of young, single workers who aren’t interested in settling down yet, but who knows? The Greenwich single family market continues to be robust – statistics shortly – but I’m aware of one house on Stanwich Road that, a year to the day that if sold, went to contract again for $135,000 less. This was a real apples-to-apples case here, in that the house was unchanged in any way that caught my eye, so it serves as a reminder that one can indeed lose money in Greenwich real estate if plans change and you have to get out as soon as you got in.

Star Bucks in Cos Cob
Great place, friendly staff but limited parking unless you park on Strickland Road and take a 10 second stroll through the little park. I am amused at how many drivers eschew such a simple strategy and wait, endlessly, for a parking spot to open up directly in front of the store. I’m usually in and out with my order while these guys are still sitting. Many of these drivers look as though they have at least a passing familiarity with gyms, so what gives? Exhausted from working the treadmill, no doubt.

Manners
Since moving to Raveis’s Old Greenwich office a few months ago, I’ve noticed a most unwelcome change in this end of town’s citizenry: they’ve discovered their car horns. I’m not speaking of the brief toot some people might use to alert the driver ahead that the light has changed but rather the angry, hand on the horn five- second blast, repeated two or three times to drive home the point. What gives? Do we have new, rude people in town or has something made everyone furious? I think that, in the past, people refrained from such aggressive behavior out of fear that they might be blasting their neighbor. That no longer seems to control the louts, so perhaps we should adopt Mayor Koch’s brilliant proposal and make car horns sound inside, as well as outside the car. Cool.

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We’re Back
So here we are in January already, looking forward to what we all hope will be a strong spring market. I’m encouraged because there seems to be a large group of lookers out there. All lookers aren’t buyers, of course, but all buyers are lookers (learned that one in my logic class). We shall see.

Real Estate Returns to WGCH
Several years ago the new owners of our only radio station in town dumped most of the local content, including my brother Gideon’s show, in favor of out of town business news. I never listened after that but now Russ Pruner and Rick Loh, both of Shore & Country, are coming on air. Knowing Russ, I expected the show would discuss window treatments and flower arrangements but no – they’re going to discuss Greenwich real estate something that Rick, at least, knows a lot about. Friday mornings, from 10:00 – 11:00, the “LiveInGreenwich Real Estate Hour”. Brad Hvolbeck likes to make crank phone calls to shows like this (which is why I write, rather than broadcast this column) so tune in – should be good.

Reverse Mortgages
A while back I investigated a reverse mortgage for an older family friend. We ultimately concluded that the program didn’t make sense for her but I was impressed by the safeguards built into these programs to protect elderly people from getting ripped off. You’re probably familiar with the concept: someone living in a valuable house but with limited cash can take out a mortgage that pays a fixed amount each month. Upon death or sale of the house, the loan is repaid. The borrower cannot be forced from her house, even if she uses up her equity, and the heirs aren’t stuck with owing more than the house is worth. Federal regulations require financial counseling before anything is signed and, as I noted, there are a lot of sensible protections written in. But beware: there are plenty of charlatans out there, ready to fleece you. If you’re interested in the program, check with your banker or financial advisor (that’s the guy who used to be called a stockbroker, but never mind) and, if you have a child in the financial services industry, run it by them.

459 Field Point Road
This beautiful 1888 carriage house was renovated by David Ogilvy to be his new home but a change in plans has put it back on the market. As you’d expect from anything Mr. Ogilvy puts his hand to, the renovation is terrific. Beautifully landscaped outside, with deeded winter water views, everything inside has been redone at the highest level of quality. The only thing I might change is the master bedroom. The current bedroom is fine as is but there’s FAR room to create a new master suite that would have even better views and, of course, free up another bedroom (there are already five, so you could also choose to save your money). Asking $4,350,000 which, for the Belle Haven neighborhood and the condition of this house, sounds fair.

Splash
For years, my greatest fear as a real estate agent was that a client would ask to be driven around in my car. No one should be subjected to that horror but fortunately most folks today insist on driving themselves, either because they have kids strapped in car seats or, thanks to the internet, they know a property’s location and prefer to meet their agent on site. Still, no lucky streak lasts forever so it was a great relief to receive for Christmas a gift certificate for a detailing at Splash (thanks, Nancy). I told the manager that I didn’t expect miracles after four years of spilling coffee, riding my poor Honda hard and putting it away wet but he smiled and said, “I think you’ll be surprised.” Wow. It’s as close to new as an old car can get. It’s an expensive, four + hour procedure but what a result. Every nook and cranny is spotless – they even take the seats out so they can clean the grunge out of the runners. The seats are clean, the carpet shampooed, etc. I don’t expect its new, pristine condition to last through the winter (if winter ever comes) so if you ever wanted to tour the town with me, now’s the time to call.

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Not All Bleak News
Back in May, Francine Colby listed 50 Dingletown, a beautiful old house on six acres, for $9,850,000. It sat through the spring and summer markets but in October a bidding war broke out and it sold last week for $10,250,000. Odd how that happens but this phenomenon of no one wanting a house and then two or more buyers appearing simultaneously occurs in all price ranges. Joan Crossman’s listing at 11 Center Road in Old Greenwich sat for three month this fall before three different buyers appeared at once. Nice for sellers when that happens, of course, but it’s a lesson for buyers: if you’re seriously attracted to a house, make the bid – you never know how much time you have, regardless of how long a house has languished.

Wall Street Follies?
Far be it from me to criticize Wall Street, the source of so many of my buyers, but the recent announcement that Reology (formerly Cendant’s real estate division) is going private in a leveraged buyout has me scratching my head. Reology holds under its umbrella several of the country’s largest real estate firms, including Century 21, Coldwell Banker and Soetheby’s. It was created just last August (?) when Cendant spun off its real estate business and now its President has suddenly discovered that the publicly traded marketplace doesn’t like cyclical businesses. Shouldn’t he have noticed this during the years when Cendant owned them? Realogy shareholders will receive a nice premium but both Moody’s and Standard & Poors are knocking Realogy’s credit rating to junk status while Realogy’s President is walking away with $135,000,000. To this non-expert, the deal seems to more about bankers’ fees and cashing in on stock options than about business, but I guess we’ll see. My guess: look for them to go public again in a couple of years, thereby generating another round of fees.

Cos Cob
There’s a nice house in Cos Cob that sold two years ago for $2,312,500. Its owners returned it to the market this spring at $2,675,000 and now, two expirations (and three brokers) later, it’s still unsold, asking $2,449,000. Even if it sells for anything close to that the owners will not stand to gain much after taxes and commissions are deducted. I don’t know if there’s a lesson here, other than it can be tough to buy at the height of the market and have to sell when it’s down (they did teach you in school that real estate is very much not a liquid investment, didn’t they), but the house’s travails caught my eye. I know that the Cos Cob market has been particularly slow this year – the same house in Riverside or Old Greenwich would almost certainly have appreciated – but still a surprising predicament for Greenwich. Oh – there is at least one more lesson here: if your house isn’t selling, you’re better off lowering its price rather than firing your broker. All the marketing in the world won’t move your house if it’s over-priced.

Starting Over
If you’re planning to sell this year, now’s the time (well okay, enjoy New Year’s Eve) to start getting it ready. Historically, the third week of January sees the start of the spring market and there will be a new crowd of buyers (we all hope) getting out and about, seeing what’s available. Your house will certainly show better when its gardens are in bloom but by then you’ll have missed a lot of buyers. Betty Moger, who ran Cleveland, Duble & Arnold forever used to preach, “if you wait for the dogwoods to bloom, you’re too late.” What was true for her long career still holds, in my opinion.

What if your house sat unsold for the fall market (or since Spring, like that Cos Cobber)? Now’s an excellent time to sit down with your agent to discuss what you can change. Price is always a good place to start, but is the master bath a wreck? Kitchen obsolete? I’m not suggesting you sink a ton of money into a sinking ship, but $10,000, say, in improvements might be more effective than dropping the price that amount.

See You Next Year
So that wraps up 2006. Not a terrible year for real estate – some of us had our best year ever – but it certainly saw a significant drop from 2004, the all-time high. Don’t panic and remember, as Realogy’s President just discovered, real estate’s a cyclical business. Happy New Year.

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