Daily Archives: December 14, 2008

Mad Money

Forbes has lots of good stuff on Bernard Madoff’s crimes, including this one. Call me a cynic, but I particularly liked this guess by the author:

And now we are to believe that Madoff’s sons acted out of principle by shopping their father to the Feds. Is it possible, that once Madoff saw the end was nigh, he began orchestrating his own demise? That he decided the timing? It wouldn’t surprise me in the least if the lawyers sorting through this debacle find that in the days leading up to this, Madoff’s remaining wealth headed out to safe havens, untouchable either by his investors or the authorities–but perhaps one day accessible to his family. It’s just speculation, but Madoff is clearly a man who knows how to work a system.

Have you been following how many hedge funds and money management firms are owning up to having entrusted Madoff with their clients’ money? I understand the allure of a good fee, but these guys are going to go down in a hurry when they’re asked to repay their clients’ losses. I wonder whether the Antares boys are still boasting of a 100% occupancy rate for their UST project? It was supposedly fully rented out to hedge funds but if those funds are defunct, who will pay the rent?

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A change in perspective

I showed 136 Cat Rock Road today – I wrote about this house previously, noting its drop from more than $3.0 million to its current price of $1.895 and opined as to how I thought it was a bargain. I take that back. Looking at it now, especially after touring some other new construction that’s available for about the same price, it still seems overpriced, to me. For one thing, because it sits on a one-acre lot in a 2-acre zone FAR mandated a carport instead of a full garage (if you’ve ever wondered exactly how absurd our FAR regulations are, go see this house and tell me why it must be smaller than a house in the one-acre zone. Then go thank Franklin Bloomer for bringing idiocy to our zoning laws). I’ve done without a garage my entire car-owning life so the absence of one doesn’t strike me dumb but to a buyer who is prepared to spend $2.0 million, no garage is a non-starter.

Then there is the quality of the house itself. It’s okay, I guess, but the house is a renovation of an older house and it doesn’t have the solid feel of some of the better new construction that’s out there going begging. It’s certainly better than the prefabs being offered for more, but those aren’t going to get what they ask, either. Not when there is excellent construction available. 

What really struck me, as we examined a number of houses this morning, is that there are a lot of older houses on the market that aren’t going to fetch anywhere near what their owners hoped for. Prices that a year or two ago seemed sensible now seem hopelessly out of date and out of touch. My sense of the market is that there are people holding on to their prices in the hope that things will dramatically improve on January 20th when Obama takes over. It could happen, I suppose, but it’s far more likely that it won’t and conditions will continue to deteriorate. If so, watch out below, come spring. And my advice, again, is that if you have to sell your house, drop its price now rather than wait until the entire market does in three months. Apparent bargains that can be sold now won’t look so rare when they’re sharing their price level with 100 newly-reduced houses.

One final thought about Cat Rock: who the heck ever thought to price this at $3.0 million?

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Filed under Buying/Selling Greenwich Real Estate, current market conditions, pricing

I left my house in San Francisco

San Francisco housing market is just beginning to feel the pinch. 

[E]xecutives at the helms of the city’s biggest brokerages say they’re preparing for an unpleasant and unprofitable 2009, although it may turn out to be the best year that buyers have seen in more than a decade.

“When we get to the end of 2009, I’ll have a smile on my face,” said Bill Drypolcher, owner and founder of San Francisco’s Zephyr Real Estate. “I don’t know if I’ll have any money in my pocket, but I’ll have a smile on my face.”

The downturn that slammed other parts of the Bay Area and the rest of the country didn’t really begin inflicting serious pain on San Francisco until the second half of this year, real estate experts said. And while no one expects San Francisco to see the kind of foreclosures and bank sales that have become common in the East Bay, the city’s real estate market is clearly suffering.

“San Francisco had managed to fool itself through most of 2008 into thinking that it wasn’t going to suffer the same sort of issues that have hurt other places in the state,” said Christopher Thornberg, an economist with the consulting firm Beacon Economics. “The last four or five months of the year, San Francisco has seen price declines that have been quite prominent. You can’t have prices fall as much as they have across the bay without some impact on San Francisco itself.”

The median price of a single-family home in San Francisco fell 16.6 percent to $702,000 in October, the most recent month for which data are available, according to the real estate information service MDA DataQuick. The October drop compares with $842,000 in October 2007. The median price is now 22 percent below its peak of $900,000 in May 2007.

Sounds like us.

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This is disgusting

Governor Palin’s church destroyed by arson.

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Something else coming to Greenwich?

Fascinating article (warning – totally unrelated to real estate) in today’s Times on a gang of Serbian ex-soldiers who are wandering Europe’s poshest cities robbing diamonds. They hit Harry Winston’s Paris store December 4th. We’re not Paris of course, but we do have expensive jewelry stores and we could use an upgrade in thieves after that gang went to the trouble of setting a SUV afire on Greenwich Avenue, hitting Betteridge’s in the ensuing confusion and then attempting an escape on a moped, for Crissake, and dropping the loot. We deserve better.

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Gay Marriages in Greenwich

Greenwich Time has an article today on Greenwich serving as a new mecca for gay marriages.   That’s fine with me – I’m a divorced father of three so you won’t find me pontificating about the sanctity of marriage. And I remember tales of my movie star grandmother ‘s friends zipping out to Greenwich for quickie marriages and then divorcing almost as soon as they returned to Hollywood, so it’s not as though the town hasn’t seen all this before.

I also wasn’t offended to read of a wedding planner in Cos Cob who refuses gay patronage because she “totally disagrees” with the concept. It seems to me she should be as free to act on her beliefs as a gay couple is to act on theirs. What I really would like to see is for the state to get out of the marriage business altogether but that’s unlikely, so … cheers to all.

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