Daily Archives: April 20, 2009

So what’s this all about?

I have heard nothing about this case in the New York media but down in D.C. comes a story about a “key witness in State Department passport fraud case shot to death”. Police heard “multiple shots” which, were it a Greenwich murder, wouldn’t rule out suicide but the D.C. cops have les imaginative minds and are treating it as a homicide.

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Is anyone keeping track of George Lindemann, Jr.’s whereabouts?

I was so hoping that Walter could keep Georgie occupied.
I was so hoping that Walter could keep Georgie occupied.

Twenty-one polo ponies dead in Palm Beach.

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From the horse’s mouth (no, not one of Walt’s daughters)

A builder I’ve written about before in a disparaging tone and then met, and liked, sends the following (edited sightly to avoid identifying him, although I don’t think he cares).

I am just checking in, I love the headline on the [XXX]  post, LOL.
Since I listed it, I figured I would give you first hand  information about what is transpiring.  The minute [XXX] went on, there were a flurry of calls, and I have some plans out, but nothing concrete yet.  But I would like you to know what the majority of people said about the new spec homes on the market in Greenwich. 
basically the homes that are sitting, the majority have been sitting for over a year, and at what point does it become not new, and simply called, just never lived in.  Seems that the people that are out there in the 7 and 8 range want something new, as in just finished or just being finished.  Its very possible that a good majority of these houses completed in 07 will be almost 3 years old.  That’s hardly new.  Anyway, be well, just wanted to give you something to think about.  I am here for a few more months, lets get together and have another drink. [Ed. note - that's coffee for me, no saying what my builder friend will consume]. 

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Spring Thaw, part II

Okay, the rumored sales I’ve been hearing about haven’t materialized, but there’s a resurgent spring market nonetheless, according to the Greenwich Time and realtors it found to quote. Call me contrarian, but when a newspaper almost entirely reliant upon real estate advertising runs a puff piece on what a strong market we have, I’d say that’s a pretty good sign that the market is dead or dying. Maybe not, but to its credit, Greenwich Time did dig up a banker who told this truth, which seems to say it all:

While interest rates are lower, mortgages for new homes don’t seem to be on the upswing.

“I can’t speak for every other lender, but we’re not getting any requests for mortgages on purchases,” said Jim Calkins, executive vice president of lending at The Bank of Greenwich. “Within the mix of applications a year ago, there were a number of people purchasing real estate.”

That would be no requests for purchase mortgages. If there were accepted offers out there waiting for mortgage approval, you’d kind of expect someone to be applying for a mortgage, wouldn’t you?

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Know when to fold ‘em

It’s hard to believe in this market, but there are spec builders out there, dragging by their their fingernails as they slide toward oblivion, still turning down offers. I know of one guy who’s watched his brainchild slide from $12 million plus into the $7s and the best he could counter a $6 million no contingent offer was $6.6. Trying to get that extra ten percent? At this stage of the game? You’ve lost the game, bro, and you’re out millions. The next offer you receive will be lower, not higher, because that’s the direction the market’s going.

Another builder turned down $5 on his own $7 million project because he owes $6.5 on the mortgage. So okay, he’s delayed facing the inevitable since that offer was extended in November but how much has it cost him to pay that mortgage, and what’s happened to his house’s price since then?

And yet another builder has received six six-month extensions on his loan, with a final one in December at 11% interest, expiring June 1st. I don’t know if anyone has offered him anything on his house – a beautiful project wildly over-priced for its location – but come June 1st, his equity will be zero. I’d bail now, if I could.

I could go on – the landscape’s littered with these failed houses – but you get the idea. Builders and sellers are still in the denial/anger stage and I suspect that by the time they reach acceptance, they’ll be too late. 

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We still don’t get it

As of four o’clock this afternoon we have one contract reported and one sale. The contract is for a co-op unit at Putnam Hill, under $400,000, and the sale is for a cottage on Pleasant Street in Cos Cob for $680,000 (the seller paid $666,000 for it in 2004, so he probably made out better than many homeowners these days). Of the eighteen new listings, almost all have been put up for sale by delusional owners, agents or both. $1,000 sq.ft. for a used, old house on Druid? $1,000 sq.ft. (if calculated by the space above ground) for new construction on Stanwich? $6 million for a house that has failed for two years to fetch that price? This latter seller is saddled with an IRS lien and various other troubles but by God, no one’s going to steal his house! Good for him, but no one’s going to buy it, either – he’s surrounded by new construction going down, either via foreclosure or fire sales and even if he were lucky enough to find a sucker willing to meet his price, it will never pass muster with a bank appraiser. And, trust me on this, anyone who is a $6 million cash buyer has a choice of better buys in this market.

One seller who seems to have gotten religion, perhaps because he’s in jail awaiting trial for manslaughter, is the wayward chiropractor at 12 Wyckham Hill Road. This guy has been trying to sell his house for $3.375 million since may, 2005. Today he (or his lawyer) dumped the original agent and price and brought it on for $2.195. Wyckham Hill has never been my favorite street, but this house might be approaching bargain status. 

So perhaps that’s the answer to our real estate woes: arrest our owners for criminal stupidity and see if the sound of jail bars clanging shut doesn’t force them to face reality. Harsh, perhaps, but if it does the job ….

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