“Say, you didn’t really come here to hunt bear, did you?”

That’s the punch line to a crude joke that circulated on Wall Street maybe 20 years ago. This is a family- safe blog so I can’t tell more than the punch line but it involved a man, purporting to be hunting bear, who has a series of humiliating things happen to him during his quest.

I was reminded of the joke this morning while speaking with Rick Loh, an agent with Surf & Turf whom I respect and admire. He said something like, “well sure, there’s tons of inventory, but most of those houses aren’t really for sale.” I absolutely agree with Rick, but I wonder how many of the owners know that that’s the market place’s reaction to their pricing? Perhaps not many.

Rick, by the way, had another observation, namely that, for houses that haven’t been renovated since their purchase, we’re back to 1999 price levels. I’d been saying 2003 (and before that, 2004) and the leap from 1999 to 2003 levels wasn’t as great as in later years, but that’s still a significant drop. Is he right? Well he suggests that I pull out an old sold book from 1999, look at the prices and see how many that I nod my head at and say, “yeah, that’s about what it should sell for today.” great idea and I’ll do it. My guess? He’s right.

6 Comments

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6 responses to ““Say, you didn’t really come here to hunt bear, did you?”

  1. W.

    “well sure, there’s tons of inventory, but most of those houses aren’t really for sale.”

    Great observation. Most current asking prices are nothing more than a signal that the seller is delusional. It is a complete waste of time to bid on these places.

  2. anonymous

    Recall in mid-’90s that many <40yo I-banking MD’s paid cash for a ~$3MM house in Greenwich; had no second and third houses; no NetJets habits, etc etc

    Depending upon one’s view of IB/PE/HF cash compensation (and employment nos.) over next 2-3 yrs, would not be surprised if Greenwich pricing reverts to mid-’90s levels

    No doubt un/underemployed house sellers will hold out for 1-2 yrs w/unrealistic pricing, until distressed….after all, denial is powerful…and house price negotiations often reveal serious emotional flaws in otherwise economically logical sellers (and buyers)

  3. Towny

    22-30+ % across the board

    As per pricing:
    Unfortunately whats overlooked is lots of people borrowed against ,or used defered comp/options/ect as collateral. An awful lot around here got almost zero equity in their over priced homes. They are taking hits from all sides. Its a shame….to be stuck in a house one “cant afford” to sell.

    But then again, Greenwich has more than its fair share of VERY deep pockets. So all is not lost.

  4. Limestoner

    1999? Nah….can’t be. Impossible. What % drop would this be from the highs of ’06?

  5. Towny

    Dont pull it. It may not be good news to seller clients, but it is closer to the truth -than has been posted before……in my opinion.

    With 100% cash……..anything is possible.

    Otherwise what someone can afford to pay depends on VERY conservative lenders. Nobody, lenders included, have a clue of what the near future is going to bring. There is no basis in which to guage risk in the current economic condition. All the indicators are so skewed that some say wiping out 7-10-12 years of gains isnt far fetched.

    I heard 33% off 2006 prices and buyers better come to the table with 30-40% cash down or T bill collateral to offset the artificial high price. Is this far fetched? I dont know.