120 Milbank, a nicely renovated single family house, sold for $2,465,000 on January 4, 2007. It sold again yesterday, unchanged, for $2,500,000, or 1.4% more than originally paid. While that’s technically a gain, it’s a nasty bite out of someone’s wallet when you deduct commissions, conveyance taxes and lawyers’ fees. Despite what many folks believed until this year, real estate is not the same as money in a savings account. In fact, it’s more like auction rate securities which our friends in the financial services industry said were like money in a savings account.
Monthly Archives: August 2008
Why I won’t be going out to open houses today
Because there’s nothing to see, basically. One house says it’s newly staged and offers a 3% commission. I hope I’m not stupid enough to be impressed by some rented furniture that will disappear with the seller and if I’m ever swayed to recommend a house to a buyer because I’ll receive an fattener in my wallet then it will be time for me to quit.
Another house bills itself as “new construction” which would be true if this were 2004 but last time I checked, it isn’t. It also doesn’t help that the asking price is $400,000 more than what the sellers paid for it 4 1/2 years ago. I don’t think the market is now where it was then.
So I’ll save my gas. I’m going fishing next week because, if this week’s dead, next week will be six feet under, so blogging will be a little sparce,
unless some large tuna cooperate.
No kidding – he calls it the “BS-II”
OwlGore can disembark now
No need for this modern day Noah to fear rising water levels, at least for now. The WMO says that global temperatures are cooler than they’ve been in five years. Here’s an astonishing concession, even if it is followed by the obligatory warning that we’re all gonna die soon anyway:
“Global temperatures vary annually according to natural cycles. [emphasis added].For example, they are driven by shifting ocean currents, and dips do not undermine the case that man-made greenhouse gas emissions are causing long-term global warming, climate scientists say.”
Global temperatures can be affected by natural causes. Who’d have thunk it:?
Watch out below!
The Greenwich Post, my former paper and now not much more than a lightweight vehicle for advertising, has run a cheery article on those new condominiums on the Byram River (I’d give you a direct link to the story itself but the Post hasn’t figured out permalinks yet or else they fired the guy who had). “Greenwich Landing Makes a Splash”, cries the headline and I suppose that if that term brings to mind the noise accompanying a dead sailor being slid into the waves it’s accurate enough; so far as I can tell, reviewing the Greenwich Multiple Listing Service records, out of the twenty proposed units none have sold or are under contract, six are actively listed for sale and thirteen are presumably still under construction.
I had high hopes for this project because I thought it would help revive Byram but so far, things are looking a little depressed.
For sale by owner
I was prowling around Overstock.com just to see what they have in the way of real estate listings and came across this listing for 9 Fitch Lane in Riverside . I don’t know if its seller/owner has taken the wisest course of action here. This is a perfectly nice new house, cheek by jowl with the Post Road but with a decent view of Cos cob Harbor. I liked it, especially when its price dropped from $1,295,000 to $1,099,000. Apparently I was alone in that admiration because the listing expired unsold after a year on the market in November of last year. The owner pulled it from our multi-list system and relisted it himself on one of those for sale by owner sites at $1,175,000.
It seems to me, and I could be wrong, that if 1,000 agents couldn’t move this place at $1.09 million the owner himself is unlikely to achieve that goal by pricing it for $85,000 more. If I were a buyer, I’d automatically discount the asking price 5%, figuring that the seller wasn’t paying a commission, and then I’d want to look hard at that asking price. If the house didn’t sell before, isn’t that a sign that it’s worth less, not more than $1,090,000? Just asking.
Applications for refinance and purchase money mortgages are dropping. Bad news for agents and real estate lawyers as well as sellers. Check the article for current interest rates (higher, duh) and all sorts of other useful information.
He forgot to say grace
The Greenwich Time reports that
the Dinner Time Bandit has been convicted.. Good. he was a scary guy in that he broke into people’s homes while they were there,which is never a good indication of non-violent intentions. In fact, this man was previously involved in a botched break-in in New Jersey (?) where a homeowner was shot and killed.
Years ago there was another band of thieves operating in town, raiding waterfront homes that they reached by boat. They confronted a friend of mine and his wife and locked them in a closet while they ransacked the house. My friend’s wife, an elderly woman, never recovered from the trauma and died a little while after. The crooks were caught and convicted but not of murder. They should have been.
Buy my mistake, please!
A builder with a lot on Mary Lane, not one of our preeminent addresses, offered a new, to-be-built house for $2,950,000 back in February. No one bit so today he’s re-listed it as a foundation with house plans for $1,375,000. You could probably finish it for a little under $1 million so it may be a good buy, but that’s still a lot of money to plump into this neighborhood. And if the original builder doesn’t want to do it, why should you?
There’s a movement afoot in Massachusetts to repeal the state income tax. There’s even a good chance it will pass, saving each taxpayer an average of $3,700 per year – compare that to Obama’s stimulous plan of $1,000 (which, of course, won’t go to actual taxpayers – we’re too rich but instead to the “needy).
Could we get rid of the income tax here in Connecticut? We’ll never know, unless we change our constitution, because ballot inititives aren’t allowed. Nutmeg voters might support a repeal but it’s a cinch our legislators won’t because they’re the ones controlling all the money it sucks in. There’s a chance to amend our constitution on this November’s ballot and guess who opposes it? the teachers union. Quelle surprise.
Another Job Killer
Thanks to Greenwich Roundup,I was steered to a story about states, including Connecticut, that are pushing for mandatory sick leave for hourly workers. It’s a popular move (one that will almost certainly be preempted by Congress if Obama and his crowd wins this Fall) and the linked article really tugs at the heartstrings – a school bus driver who can’t recover from his cold because he can’t stay home – but, just like raising the minimum wage, it will kill jobs. Small businesses generate more new jobs in our economy than any other source, with the possible exception of the ever growing public service sector, yet, year after year, legislatures find new ways to torture them.
A higher minimum wage was passed by the federal government and Connecticut this year and unemployment rose. There’s been no discussion that I’ve seen even exploring the question of cause and effect – instead, it’s all blamed on that debbil’ Bush (I actually heard a radio caller propose that the current economic woes are the product of Bush and his old money crowd deliberately setting out to push the new money types back to their proper place).
You can read Connecticut’s proposed legislation here. Judging from the support it has, I do believe that our politicians won’t rest until we’re all on the government payroll.
New Yorker Article on Greenwich
There’s a terrific article in the New Yorker this week by Nick Paumgarten that captures the town nicely – its Old money (which was new not so long ago) its new boors and their flashy houses and all of us middle class schnooks in between. The article is not available on line but, and I would almost never say this, the piece is worth the news stand price of the entire magazine. Read it.
Here’s a real disappointment
The Big Foot found in Georgia (the state, not the country – my previous post on this subject was a lame joke turns out to be a cheap rubber suit. Who’d have guessed?
Why I prefer to have my teeth filled in Old Greenwich
From Exeter New Hampshire news: Core Dental first in state to use porous paving material
How not to sell your house
Buy a house for $4.25 million in the Spring of 2006, change your mind and put it back up for sale three months later and ask $5.2 million – no one will notice the difference. Except in this case, they did, so today, 2 1/4 years after first being put up for sale, the price dropped to $3.95 million. I don’t know the particulars of the pricing decisions that went on here and it’s possible that gold-plated fixtures were added during the three months it was off the market but apparently would-be buyers in 2006 failed to see the increased value and balked. And now, of course, we’re in an entirely different market.
Slow day for real estate news
In fact, I can find no real estate news, so instead I offer this story of riots planned for the Democratic convention. I don’t think this is going to help Obama – in fact, the Chicago riots in 1968 got Richard Nixon elected (or helped achieve that dubious result), but I suspect that the loonies planning all this don’t care. “Bring on the Revolution, man” or some such rot. Should be fun.
Try this line out during your next traffic stop
I’ve been attempting to lighten the burden of a friend of mine who’s homeless. That’s a fruitless endeavor but I was struck by what he was told by a Greenwich cop last week while being rousted from a park bench: “Get a job, pay taxes and then you can be my boss.” I have my issues with our police force so I don’t dare use this but if you’re feeling brave, be my guest. Let me know how it works out.
A view from the trenches
I just spent much of the morning listening to Nora King, owner and president of the appraisal company Nora King & Associates. She looks great but her news was ugly. 50% of her firm’s Greenwich case load is now devoted to pre-foreclosure or work-out notes, compared to zero last year, and 34 homes in town are now in foreclosure with, as her caseload suggests, more on the way.
This isn’t necessarily bad news for buyers, of course, because it means some sellers may finally get serious, and real, about their pricing, and your “low ball” offer might now be heard by a receptive ear. Or not, depending on the seller’s state of delusion.
Other tidbits: condo sales are not only way down, underwriters hate lending on them (which may be the cause of the effect). As King explained it, an underwriter in, say, Ohio, sees that 1/2 of its troubled loans, nationally, are arising from condos, and they don’t want to hear about what the condo market’s doing in Greenwich; they just don’t want anything to do with any of them. There are still loans available but King suggests, as I did here last week, that if you’re putting your unit on the market you take the last comparable unit sale for your compplex and price yours 10%less than that. This is not the time to stretch for a new price – your buyer won’t get a loan.
Nationally, 1/3 of all single family homes sold within the past few years are underwater, or worth less than their buyers paid for them. Greenwich hasn’t reached that stage, but it sure makes lenders nervous.
Appraisals are taking at least 7-10 days now – they one day turn-around time is gone, so make sure your mortgage contingency (yes, they’re back) is for at least 20 and preferably 30 days; you’ll need the extra time. Sellers, be aware of this new reality and don’t be inflexible.
Buyers, go out and get pre-qualified now if you’re even thinking of buying this Fall.
Sellers, know that the comparable sales your buyer’s lender wil look at are no older than 90 days (30 days in depressed and falling markets) instead of the 6 month window used before. So if your neighbor down the street sold his house for $X back in March, don’t count on your own house appraising out for the same amount.
Oh – “fixtures”: pools, new kitchens, great new master baths etc. are not considered to add value to your house these days. Your house will probably sell faster but, as far as the lenders are concerned, you might just as well have saved your money (that’s a bit of an overstatement, but generally true).
There’s more, but how depressed do you want to be? The upside is that buyers should start seeing some decent opportunities if they haven’t already. Sellers should start adjusting mentally to a down market, and hope that things get better next year. According to King and some other pundits there are some faint signs of a recovering market but I don’t anticipate much good news in the immediate future. Especially if, as rumored yesterday, Fannie Mae has to be bailed out by us taxpayers. Wall Street’s gonna hate that.
They’re kidding, right?
Today’s Greenwich Time headline announces that the town will now more closely monitor the spending on the Hamilton Avenue School project. This after spending $31 million on an unfinished project that’s over-budget and way, way overdue? Now they’re going to watch how our money’s spent? I’m no financial wizard but prudence suggests that the time for monitoring this project should have started before the contractor was selected and certainly should have continued while the dollars were flying out the window. I think we need someone watching the watchers.