Monthly Archives: March 2008

Arrgh!
No, it’s not Pirate talk day, that’s an expression of remorse for moving Chuck and Nancy Standard from Druid Lane, where they’ve been since 1954, to Hearthstone, one street over. I heard from a Hearthstone resident that the guy building a new house on that street is not nearly as accommodating as Tom Brandenburger, who is building on Druid next to the Standards (where they remain). So if you want to see what a good builder does to take care of the neighbors of his building site, drive down Druid, not Hearthstone.

Watch out below!
Some new construction on North Street, originally priced at $9.5 million, has just been relisted at $7.2. That may still be too high – we’ll see – but it does reflect a refreshingly objective view of the market. This is not the time to attempt new highs. In the same vein, I saw a mediocre assemblage of new construction in the mid-country the other day: a Westchester builder, using a Westchester agency, asking what they obviously feel is an appropriate Greenwich price. Wrong, by at least $1.5 million, in my opinion. I happen to have just sold a house for this one’s asking price and I’ve got a pretty good feel for this particular slice of the market. There’s no way I could have sold this house for the price the builder wants, even before Bear Stearn’s collapse.

Finish what you start
I saw another house last week, asking a bunch of money for an uncompleted project. I’ve been through this myself, so my sympathies lies with the seller, who is attempting to recoup his expenditures but, generally speaking, either finish the job or resign yourself to losing most of what you’ve put in. This one’s probably going to sell for its land value, and not much more.

Market Conditions
The calamity befalling Bear Stearns has hammered our market. A number of agents report that their house-hunting clients are now out of work and I know of at least one builder who isn’t even looking at potential projects until this all sorts itself out. I think we’ll all be just fine, eventually, but there’s a lot of nervousness out there, and buyers aren’t jumping out of the gate to get the house of their dreams. Still, what better time to strike a deal? Assuming you still have a job, of course.

School admissions

Private school admission decisions are forthcoming and they usually trigger a fresh flood of home buyers; Manhattan residents whose precious, two-year-old geniuses failed to make the cut at Toddler school start thinking about suburban schools and parents of would-be Brunswick kids suddenly lose interest in moving closer to King Street and start investigating houses in Old Greenwich and Riverside. It’s all good; the kids will be fine, but we Realtors appreciate the new blood.

Lost Deal
I recently pitched for, and lost, a listing here in town – the owners had a friendship with another agent and didn’t want to jeopardize it. I regret the loss of business, of course, but what I really regret losing is the chance to work with this high-class couple. The husband called me to inform me that they were listing with someone else and that’s a tough, embarrassing call to make; I’d equate it with having to call clients in my past life to tell them that the judge had ruled against us – thank God for answering machines, and the prescience to know when those clients wouldn’t be home! But really, it’s much nicer to learn of the loss personally, rather than see a hoped-for listing pop up on the MLS under another broker’s name. I used to work for another firm whose agents mostly dealt with polite, Back Country clients. Whenever we’d see the florist arrive in our parking lot we’d know that one of us had lost another potential listing. My advice is, skip the flowers, but a phone call is always appreciated.

Taxes
I read an interesting study published by the Tax Foundation the other day, comparing the tax burdens imposed on corporations by states and federal governments. Turns out that Connecticut, combined with our friends in Washington, taxes these entities at a 39.9% rate. That compares to a 34% rate in France, 28% in Sweden, and 12.5% in Ireland. Guess whose economy is growing fastest? Guess who wants to raise taxes further?

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Bear Stearns, R.I.H.
That would be rest in hell, if it weren’t for my having friends who worked, honorably, for this firm. Back in the 90’s, I argued with those friends that, notwithstanding their own blameless activities, they worked for an enterprise that profited from providing financing and clearance service for corrupt penny stock – boiler room fraud machines like Stratton Oakmont, R.H. Baron’s, and the like. The SEC eventually shut down the penny stock firms, Bear Sterns paid some $48,000,000 in fines and, I hope, my friends all left for better firms. Bear Sterns itself moved into the subprime mortgage market and basically went bankrupt this week – couldn’t happen to a nicer bunch of guys. Of course, for those employees engaged in the legitimate side of the banker’s business, it may be just a bit galling to learn that, while their stock investment evaporated over the weekend, Jamie Cayne, Bear Stearn’s last corporate chief, resigned in January and closed last week on a $28,000,000 unit at New York’s Plaza Hotel.He “earned” $38,000,000 last year for guiding the firm into this mess. When all else fails, flee the ship and buy real estate.

$28 million and worth it?
I can’t guarantee that, but Helene Barre’s new listing for that price in Conyer’s Farm at least seemed reasonable. I may be nostalgic here – the house abuts the lake where we used to skip school and swim (another agent, older than I, used to “park” here” – if only Eliot Spitzer had known of the place) but the house sits on 22 acres, was magnificently built by Hobbs and, all in all, gives the impression that a huge amount of money and care went into its production. Not to cast aspersions, but that sets it apart from some other houses I know of in this price range. In addition to the fantastic trim work, I particularly liked the filtration system that whisks cigar smoke from the house: I was recently amused to see a very nice outdoor porch, with fireplace, labeled a “cigar patio”, but true masters of the universe just flip a switch and stay right in their comfy chair, puffing away without anyone complaining. Cool.

Smart Builder
Chuck and Nancy Standard, of Riverside, recently contacted me to compliment Tom Brandenburger (203) 912-2136, a Greenwich builder who’s been constructing a new house next door to them on Hearthstone Lane. It looks like a very nice house, but what the Standards liked was the care and attention Brandenburger bestowed on the neighbors. Trees that buffered the adjoining properties were encircled with orange fencing and posted (in both Spanish and English) “Area de la Proteccion del arbol – no entrar”, driveways were plowed, friendly greetings exchanged and concerns addressed. I work with a builder who does the same sort of thing but it astonishes me to see so many builders who ignore these common courtesies and run roughshod over neighborhoods while pursuing their projects. Dumb, because good will is invaluable.

When bad prices happen to good houses
Here are some recent asking and selling prices of perfectly good houses that sat forever on the market before finally being sold: $3.095 asking price in March ’06 sold for $1.980 March ’08. I could go on (in fact I did, in an early draft of this post but libel laws concerned me), but you get the message: the best house in the world won’t sell if it’s over-priced, so don’t do it.

Canada free trade
Did you catch the flack between Obama and Clinton over who was going to be hardest on Canada and our mutual NAFTA agreement? Someone smarter than I am (a low hurdle) points out that Canada has universal health care, a high minimum wage and environmental protection laws that would keep Dick Cheney sleepless at night, so if these two are really intent on enforcing a fair trade bill they aren’t, as they claim, interested in “a level playing field” but rather just want to shut down all trade. The last time this was tried, vie the Smoot-Hawley tariffs of 1930, things didn’t work out so well, so if either of these two is elected, I suggest you sell your real estate (especially you, Mr. Cayne), buy gold, and hunker down.

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Smaller Houses
I receive a fair amount of email traffic from readers wondering why I devote so much attention to high priced houses when most of us poor slobs can only afford modest ones. The easy answer is, what passes for an “entry-level” house in this town is rarely interesting or new. But some great, small houses do occasionally come on the market and when they do, I write them up. Hendrie Lane in Riverside was a recent example: here are two more:

7 Osee Place
This is a 1927, 2,400 sq.ft. house off of Valleywood that was completely renovated about 4 years ago and is currently listed by Elizabeth Dagnino (Prudential) for $1,550,000. I really liked it. It’s been done up in what I suppose is Craftsman style but don’t rely on my skewed understanding of architectural styles- the point is, it’s absolutely beautiful, in mint condition, with a nice back yard on a great, quiet street that’s kiddie heaven. Wonderful neighborhood, really nice house, good price.

26 Spruce Street
Okay, you pay more for Riverside, but Pam Chiapetta’s new listing at $2,045,000 seemed well-priced for the quality offered. I liked this house when it was on the market a few years ago; the new owners have redone it and it’s even nicer now. I doubt there’s a scrap of extra FAR space to expand, but it has five bedrooms (I might want to sacrifice one to make an additional room) and a decent yard, all within walking distance of the schools and train. There’s good value here, in my opinion.

Apples to apples
Another complaint I get from readers is that we rarely compare actual sales of existing houses. It’s all well and good to learn that the average house price increased 7% last year, but that number is skewed by the many renovations and new construction projects: what’s happened to houses that have simply been lived in, with no new kitchens added? How have they fared? It’s hard to find such houses these days – as you know, we’re all living in a perpetual construction zone and it seems that every house is being added on to, every day. But Mandy Fry (David Ogilvy) has listed 4 Gisborne Place for $2,065,000 and this house offers a neat example of an unchanged property. It sold for $1,915,000 in August 2006 and, to the best of my memory, remains unchanged. If so, and assuming there’s some slippage between asking and selling price, then its value has remained flat for the past 18 months. That’s probably about right: I certainly wouldn’t counsel a seller to add much, if anything, to the price he paid a year or two ago. Not a disaster for the homeowner: rental value for this house would have been between $7,500 – $9,000 per month and the tax benefits accruing to mortgage payments should offset real estate commissions and other transaction costs, but the past few years were not a period in which to make a killing in real estate.

Changing Times
Average time to prepare dinner in 1930: 150 minutes; today, 15
Consumers prefer mixed, pre-washed lettuce 2:1 over conventional heads.
Pre-cooked, frozen meals and take-out sales at an all-time high.
Biggest consumer add-on to houses these days: the “gourmet” kitchen, replete with professional cooking ranges and commercial grade refrigerators.
We’re selling perception, not reality.

Plastic Bags, revisited
Did you catch that story in the Times of London reporting the consensus of a number of environmentalists that the banning of plastic shopping bags was a useless exercise in feel-good environmentalism? Turns out, we’re not choking 100,000 seabirds, whales, dolphins etc. on the things – the experts couldn’t come up with a single instance of a death occasioned by the bags- and, as usual with this kind of gesture, a ban only encourages people to think that they’re doing something significant to save the world while permitting them to ignore the truly harmful acts that we all engage in. The trouble with this sort of nonsense is, when it’s exposed as folly, it makes people like me even more cynical towards the entire environmental movement and depletes energy that might otherwise be expended on real change.

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Over-priced houses
Two more houses went to contract last week, each at more than $1,000,000 below their original asking price. This is not an example of the Greenwich housing market collapsing but rather, a reflection of crazy pricing to begin with. I saw three new listings last week that, in, my opinion, will suffer the same fate, long after their owners have been driven to distraction trying to keep their homes in showroom condition, for months. Don’t do this to yourself – price it, sell, it, and move on. This is not the market to toss something out there to “see what happens”: nothing will.

But then …
There’s Jane Gosden’s listing at 123 Zaccheus Mead Lane, for $7,250,000. This one ought to go. It’s a 1923 classic, completely updated, with a new pool and pool house that look like they’ve been there for the past 80 years, all new electric and a furnace that could easily service a nuclear submarine, new windows, kitchen, etc., all on one of the best, most convenient streets in town. I thought it was a terrific house, sensibly priced, compared to others in its range.

29 Irvine Road, Old Greenwich

A long time ago a Realtor I admire tried to sell me on the merits of split-level houses. As we were in a tired, decrepit example of that style, I wasn’t buying, but Lillian Fong’s new listing in Old Greenwich has opened my eyes. This house has been completely redone in a Craftsman style by Greenwich architect Paul Peters (new to me, so I took down his contact information: 325- 1110, pjpdesign@aol.com) and it’s a real beauty – one of the nicest houses I’ve seen in years, in fact. Plenty of space, five bedrooms, great street, asking $2,695,000. I think it’s a good deal, and, if you have a split level or are considering one, you should see this so that you’ll appreciate the possibilities.

No Energy
Our awful attorney general, Michael Blumenthal, has scored yet another triumph in delaying a cross-sound electrical cable underneath the waters of Long Island Sound. I saw this man on TV last fall, harrumphing that we don’t need a Compressed Natural Gas plant 10 miles off shore because there are so many alternatives to bringing energy to Connecticut. Fine, except that this aspiring senator has done everything he can to stop any such alternative, from power lines to pipelines to nuclear reactors or even conventional power plants. The man obviously believes that fairies will circle our state, holding hands and singing Kumbaya while delivering clean, non-polluting energy to our state, all for free; the moron will be grievously disappointed when that doesn’t happen. He’s a Harvard man, naturally.

John Tesei
I don’t know if our new First Selectman went to Harvard, but he acts as though he did. He just approved, based on the plea of a thirteen-year-old boy, a plan to spend $50,000 to buy “green” energy for the town, claiming that it costs so little to send an important signal that Greenwich is environmentally conscious. I’ve come to expect that our representatives in Washington and Hartford will hold in contempt the effort citizens expend to earn money, but I’ve hoped for better from our local politicians. $50,000 represents the earnings of ten average Greenwich homeowners whose entire tax bill will be fretted away on a feel-good “symbol” that achieves nothing, all so that our First Selectman can hold his head high at the next meeting of Connecticut mayors. Jim Lash rejected this nonsense for what it was; is it too late to invite him back? Failing that, can we at least agree not to set our budget priorities on the importuning of children? Other than the occasional Christmas present, it’s not how I set our household budget and it seems a poor way to run a town.

Book SigningDiane Dutcher has invited me to sign copies of my book, Greenwich Mean Time at an open house at her listing at 7 Irvine Road, Old Greenwich, Friday night, March 14, at 6:30. I don’t expect to sell many copies, but I respect a Realtor who thinks outside the box, which Diane certainly does. Come and be feted and, perhaps, entertained.

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