How Not To Sell a House
A house in “the Golden Triangle” of Greenwich came on the market just this spring asking $6,950,000, a ridiculous price for a house on 0.6 of an acre in a 1 acre zone – no room for expansion, among other problems. It didn’t sell – there’s a surprise – and there followed a rapid series of reductions all the way down to $3,695,000, still pretty strong for this neighborhood and this house, but at least some sort of reality seeped in. But that initial price killed it I think – we agents see it, dismiss it, and forget it exists. At that point, we don’t follow its reductions, we just move on to another house with a more realistic owner. It’s now been withdrawn from the market. We’ll see what price it reappears at, if it does. I’m just speculating here, but this misadventure has the earmarks of an overly optimistic owner, rather than a deluded broker – a broker/agent would have kept the high price going for far longer, if only to justify his original opinion. But it points out the danger of taking over-priced listings just to get the listing (we’re all tempted by the reasoning that “if I don’t take it, someone else will”). It’s just a waste of time and money and, since I stopped succumbing to that temptation, I now enjoy a certain amount of schadenfreude when passing houses I rejected sitting forlornly on the market, forever.
Monthly Archives: June 2008
How Not To Sell a House
To tell the truth
I got in trouble last fall when I took on a local real estate firm for falsely reporting a house on Thunder Mountain as “sold” for $7,500,000 (or somehere close to that figure) when in fact it sold, unfinished, for less than half that sum. The agngry brokerage firm (Greenwich Fine Properties, in fact – isn’t it fun not to have to worry about annoying advertisers anymore?) yanked all its advertising from my paper and explained that the larger price was what the builder estimated the value would have been had it actually been finished. Well his project next door, pretty much identical to the first one, just sold Friday for $6,495,000. Not a bad price at all, but if a selling broker had used the $7,500,000 price as a comp, she would have cost her buyer a million dollars. And wouldn’t she have looked stupid?
It’s back in the news again. Greewnich, under state law, must provide a certain number of affordable housing units for its population. Not surprisingly, in a town where a single building lot can easily cost $1,000,000, we’re not in compliance. The latest plan to add a couple of hundred units (elderly and moderate income) in Byram has met fierce resistance from that neighborhood and, I suppose that if those same units were proposed for Riverside, I’d howl too. But where else can we build? Someone suggested highrise apartments in the back country which, while amusing to contemplate (perhaps just off Round Hill Club’s 18th hole?) isn’t going to fly. I’d suggest that we forget the whole thing but again, there’s a state law in the way, which can basically override our zoning regulations and force construction anywhere a developer likes (again, wouldn’t it be fun to see moderate income folks belly up to the bar at the Round Hill Club?) McKinney Terrace and Quarry Knoll, properties already owned by the town, have the space, if not the local good will, to accommodate a large number of additional units – I can’t think of another area that does, withe possible exception of the idea being floated for building a high rise on stilts above the Island beach parking lot. Heck, they’d do that in New York, but I suspect that the cost would be way beyond our means. Intriguing idea, though.
But why is our housing so expensive?
There’s not enough land, obviously, but we can also look to our restrictive zoning regulations. I recently read that an economics professor in Seattle examined the rise in average Seattle area house prices from $230,000 to $460,000 and concluded that $200,000 of that rise was directly attributable to the strict zoning rules imposed by the city – lot size, house size, etc. The professor happened to be a proponant of those regulations and wasn’t advocating their repeal; he was just monetarizing their cost. Life is full of choices. I, for one, would prefer that Greenwich not become the next Riverdale, but I wonder how long we can insist on minimum lot sizes and low height restrictions before we run afoul of our friends in Hartford. Vote Republican, is my advice.
Some houses are selling, even at (especially at) the higher price ranges, by which I mean $11,000,000 – $7,000,000. I notice though that of the 10 sales reported yesterday all but one had sat on the market for 12-18 months, and almost all sold for substantially less than their original asking price. Hmmm there may be a lesson there. One exception: 56 Rockwood Lane, a teardown on a nice street, was listed May 12 of this year for $2,250,000 and went to contract May 20th. It sold yesterday for $2,610,000, showing that (a) you can still generate a bidding war if you price things right and (b)you can’t underprice your house, even in this market. If you undershoot the right price, there are still buyers out there willing to correct your “mistake” or your smart move. Forget Casey Kasin and don’t reach for the stars.
Okay, so I’ve been remiss
I’m in the middle of what promises to be an exciting (to me, at any rate) new website with a number of webdesigners, columnists, reporters and editors (the free time of all of whom has been blessedly freed up by the ever-increasing rapidity of newspaper cut-backs, and blogging has been none-existent. Details forthcoming soon, but, if there are still any readers out there for this blog, here’s some information you probably already knew: the market is in the tank.
A handful of houses have gone to contract in the past 21 days, some at impressive prices, but the trend is dismal. 215 house price reductions, some by millions of dolllars, vs. 44 contracts. Interestingly, and as a sign that sellers new to the market still don’t get it, 205 new listings have come to market in that same period and, to my eye, the vast majority are grossly (which I define as in excess of 10% of their eventual selling price) over-priced. I’ve finally gotten smart and started refusing over-priced listings – why waste time and money marketing them when they aren’t going anywhere? There are still agents out there who will take a listing, any listing, at any price. One house I turned down because I valued it at $1,495,000 to, in their dreams, $1,695,000, was just listed by another agent at $2,000,000. That’s just crazy, and I want no part of it. A house I mentioned in an earlier column as insanely priced at $6,000,000 finally went to contract somewhere in the $3,000,000s. That agent spent over a year holding open houses, paying for full-sized ads and showing the damn thing when the only thing that was ever going to work was getting the price to its proper level. Buyers aren’t stupid and in fact, they’re growing more stubborn every day, no doubt because they go home each night and read more scary headlines about the housing market. We’re not in a free fall, but if ever there was a time to aggressively price your house, this ain’t it.
UBS Leaving Town?
That’s the rumor that’s reported in today’s daily and if it’s true (or even if the prediction of a 500 employee layoff s true), it doesn’t bode well for our immediate future. Lots of the support staff for UBS probably lives in Shelton and points north, but a lot of the higher level folks bought homes in Greenwich. Just what we need: more inventory.