Price Cuts – getting there

Heard of a sale today up the line: seller paid $3.6, had it on the market for two years and sold it today for $1.6. We haven’t quite reached that point here in Greenwich but I am seeing more and more houses at least approaching reality. Three today of note:

99 Husted: Asked $5.250 million in ’08, now $4.150

11 Pinecroft: Asked $4.350 million in 2007, now $3.295

180 North : Asked $5.495 million in 2007, now $4.495

Eventually, these will all sell. If your house still occupies their original price point, you might want to consider what will happen to a bank appraisal should you be lucky enough to find a buyer. Because if your house doesn’t compare to what the lender’s appraiser considers a comparable house, there will be no financing.

4 Comments

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4 responses to “Price Cuts – getting there

  1. REF

    Dear Chris,
    Speaking about appraisals the Home Valuation Code of Conduct (HVCC) went into effect today. Brokers (or anybody compensated on a commision basis upon the successful completion of a loan) may not choose appraisers to be used for loans they originate and may not engage in any communication with appraisers. Choosing appraisers and all communication with appraisers is delegated to lenders. Independent appraisers must use AMC’s(Appraisal Managenent Companies) meaning independent appraisers are forced to join an AMC and give 40% or more of their income to the AMC. This probably means
    many experienced appraisers will leave the industry altogether. AMC’s are not regulated by the way.

  2. Old School Grump

    Don’t you think a drop from $3.6 to $1.6 signals an individual situation of extreme distress, rather than a representative transaction in today’s market? Do you have any take on the merits of this particular house? Not meaning to be argumentative, just curious. P.S., REF’s post at 1:56 sounds pretty ominous; would like to hear your opinion.

  3. christopherfountain

    it was never worth what they asked for it, so no, I think the price cut merely reflects a more realistic view. I draw your attention to 20 Cornelia Drive, a spec house that has (slowly) dropped from $11 million to below $7. The builder may be feeling desperate, but he still hasn’t gotten close to what his house is worth. Dumb.
    And yes, REF’s news about appraisers is ominous. I’d heard this was coming but hadn’t focused on the implications. I’ll post on it after I dig around a little.

  4. PoeticJustic

    Ok, but lets interject a modicum of taste into the discussion. Look at 180 North. Looks like a 1980s builders special with a funny little pointy tower topped entry, and what is with the little dormers that look like eyes stricking out of the roof? Did Home Deport have a special on little ugly windows that week? And how about Pinecroft. Were they having a special on double wide trailers that could be strung together to lay out a long narrow tunnel with surprising turns? Maybe could be a Haunted house at Playland? Nice jigsaw puzzle pool though. Wear a mask if you swim laps. Come on, bad price points- marginal houses will always get marginal prices except at the top of a bubble.
    And Cornelia Drive…good feedstock for waste to energy..in fact they all would be…$100/ton is probably the going price. Hey Chris- a new metric, dollars per ton as a fuel source for all the crap they have built in the past couple years…