What are they going to do with this inventory?

Driving around in the snow today (my theory about mounting snows on my car keeping storms away let me down, this time) I was struck by the number of new houses still under construction, many of which are spec projects (as an aside, my guide to all things real estate related, Frank Farricker, tells me that those two new houses on the Merritt, one on North Street the other on Riversville, are both owner built. How odd.). I understand that, once you’ve started construction you can’t just stop because market conditions have changed but the last thing we need right now are more new houses on more bad lots and most of these are on bad lots.

So what happens to all these houses no one wants? Some are bound to be bought, eventually, by lucky homeowners who will get something originally priced at $5 million for $1.5 million and live there happily. Others will be tied up in litigation for years as lenders, builders and limited partners duke it out and fight over who should take the loss and some will, I think, never sell. Would you pay $1 million for a house if, as an article I read recently suggested, it was going to cost you $500,000 to heat it and maintain the landscaping? I think not, if you have a $1 million house type of income. And those few remaining rich individuals who are undaunted by that size of bill will insist on, and will be able to get, a house on better land. I think a number of these houses are going down, eventually.

8 Comments

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8 responses to “What are they going to do with this inventory?

  1. InfoDiva

    Just out of curiosity, what does it cost per annum to maintain one of these new 12,000 sq ft houses?

    Just wondering how the other half lives….I’ve seen the results, but I don’t know what the monthly checkbook looks like.

  2. Anonymous

    Any recommendations for someone to plow my driveway and shovel the walk. I am 5 months pregnant with twins and my husband has thrown his back out. Also as new to the area how much should we expect to spend?

  3. christopherfountain

    I really don’t know – I have actually heard of $500K landscaping fees, which is why I tossed it out there but $10,000 a week? Seems excessive. Let’s assume $1,000 a week – that seems ah, “reasonable”, so you’ve got $50K there. God knows what it costs to heat and cool 12,000 sf – painting a place that size is what, $100K? I’ve read of $100K for new carpet just for a master bedroom, there’s the pool to keep up, $50K a year in property taxes, etc. etc.
    It’s more than I can afford. Any rich readers who care to chime in with actual knowledge? Anonymity assured.

  4. InfoDiva

    When you say “going down,” do you mean torn down???

  5. anonymous

    Could you give us a link to that article?

    It is mind- boggling what it costs to maintain a home in Greenwich. Our latest electric bill was $1200 for a 5,000 sf house, plus a $600 oil bill!