More on the great disconnect

As of this writing, we have 724 single family homes offered for sale in Greenwich. This compares to 542 in 2007 when, as you may recall, houses were actually selling. The 2007 market easily absorbed 724 houses in the year, whereas, unless we see a sudden and dramatic turn-around, we’re looking at about 4 1/2 years of inventory. And come September, the start of the traditional fall selling season, you can expect to see more houses added to the inventory as sellers who have been waiting for a better market will (some of them) lose patience.

So, faced with this reality, you might think that we’d be starting to see a number of houses come on for sale that were priced to sell. With rare exceptions, we are not. So we’ll all just sit around here, waiting for Alice’s Restaurant to come around again on the guitar …..

This irrational phenomenon can be blamed, I think, both on sellers, who can’t give up the memory of what their neighbor’s house sold for three years ago and simply refuse to admit that the market changed completely last September, and realtors who have the same rosy memories of the past. I keep hearing from my colleagues that it’s the buyers who are out of step, expecting fire sale prices when there’s been no fire.

I’m with the buyers – I look around and see nothing but charred acres. But so long as sellers and their qagents deny this, we’re in a standoff, and maybe we’ll stay in that standoff for the next decade, with a few houses selling as their owners hit financial difficulties, or divorce, or change jobs, and everyone else sitting on the sidelines, waiting for the other guy to flinch. If so, I’ll have time to resume my novel writing, which will please me.

30 Comments

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30 responses to “More on the great disconnect

  1. anonymous

    As the recent personal liquidity issues of many senior GS partners have vividly illustrated, many personal balance sheets in Greenwich are far less sound than claimed via empty rhetoric or “appearances”

    Chances are far more sellers have greater liquidity/timing issues than do credible, cash-rich buyers who survived the meltdown of ’08….a classic supply/demand imbalance which prices have yet to sort out…

  2. Riverside Dog Walker

    Walking the dogs yesterday I noticed that 65 (?) Meadow Road was having an open house. Nice piece of property, though the Tudor on it looks dated. I looked for it on Zillow, not being interested enough to try to get MLS access. I couldn’t find it, but did find the tudor on Meadow next to the hill to Willowmere (which I can’t find now),vacant now and asking I think $2.8M.

    There are about 10 houses in Riverside that I know of without really paying attention selling for around $3M. Doing the math, it means that a buyer paying anywhere close to asking is looking at a monthly payment for P&I, taxes, and insurance of $20k/month or more.

    Man, does that sound like a lot of risk to take on in this environment, without even considering if the property will hold its value over the next few years.

  3. Wally

    Chris – you would presumably be in a position to know, but today I heard a rumor that several very high end houses were either under or close to contract. By this I mean north of $15M. Any truth?

    • christopherfountain

      Wally, I believe 253 Round Hill has a contract – that’s been asking $25 million, although I doubt it will fetch that much. I’m not aware of any others, but that doesn’t mean there aren’t any. There’s a lot of money making its way through town, offering low bids on big houses. Somne of those bids may have hit home.

  4. anon

    253 Round Hill

    ZESTIMATE®: $7,041,500

    • christopherfountain

      I think that’s way off, anon, even in a dead market. 7 acres, 12,000 sq. ft. of good construction (plus 6,000 in basement, plus guest house, etc.) – I’m sticking with an estimate of $12 -$15 million. I may be wrong, but at least I’ve walked the place several times and personally compared it to other houses like it, someting the Zillow computers can’t do.

  5. hunkereddown

    Get cracking on the novel Chris. Sellers are holding the line. Buyers either need to step up or get used to their musty rentals.

    • christopherfountain

      Hunked down in a fox hole that’s filling with water gets uncomfortable, hunker – just ask the builder of 477 Riversville.

  6. SizeBuyer

    or your musty over priced 50 year old split level

  7. SizeBuyer

    zillow computers don’t walk the property or get inside the homes?

    • christopherfountain

      Their robots do, of course, but they worry about alien attacks and meteors all day-affects their judgment

  8. SizeBuyer

    i think i’d be more comfortable in a musty rental knowing that the greater fool theory has gotten me yet

  9. SizeBuyer

    hunker down for what? days long gone never to be seen again? go back to sleep rip van winkle….

  10. SizeBuyer

    I am reading the description for the new listing on pinecroft which states : “EASY 1 FLOOR LIVING” and the design is listed as a colonial. Am I missing something?

    I see this all the time… I love it when I walk into a split level and it being sold as a colonial on the listing sheet and I always call the broker out on it and i get blah blah blah blah blah.

    Where is the president of GAR when this happens?

    I get it:

    CF = informing buyer = bad for real estate = GAR gets involved

    Other Realtors = try to fool buyers = GAR stays quiet = all is well

  11. haveanotherdrink

    How about $17.75 million………Your not even close to the market………your doing a great service to your clients……..underbid the market by 40 percent and get nothing done………..congratulations, your waisting everbodies time

    • christopherfountain

      “You are” is abbreviated “UR” – “waisting” refers to fat dummies.”everybodies” – oh, never mind. f you have time to expand your “waste line” eating dreamsicles, fine. But do try to improve UR spelink, then kome bak. And while we can all admire your zesty pen name, “Have another drink”, I believe you’ve had quite enough for today. Thankx

  12. kidding really?

    Since all of you act like 5th graders… Let’s all remember…
    Everyone is entitled to bid whatever they want and everyone can accept, counter or decline to counter. For any seller to be surprised at low bids – they should read the news! If you think your house is worth more then hold out for the buyer willing to pay you what you want.

    The housing market like other markets are driven by supply and demand. From the looks of things there is more supply than demand. That’s when prices tend to drop. Now everyone it’s recess time.

  13. hunkereddown

    Touchy, touchy. I thought this blog embraced alternative opinion. I am not suggesting that all sellers blindly stick to their asking prices. There is an obvious discord between most sellers asking price and what buyers are willing to offer but in my opinion the gap needs to be closed more on the buy side. Those who think they are going to get the deal of the century circa 1990 prices will not. Greenwich Real Estate like most other markets varies by neighborhood. No way distressed spec house transactions will dictate the overall values of Greenwich Real Estate. Yea, Wall street jobs have been significantly impacted but nowhere near the levels you write about. I still see plenty of my obnoxious neighbors in their Range Rover’s and 911’s zipping by in the AM going to their jobs.

    As for Sizebuyer, maybe you should just buy a house and stop trying to compensate for your other inadequacies.

    • christopherfountain

      This blog doesn’t embrace alternative opinions, hunker, just posts them for others to agree or disagree.

  14. Kidding Really??

    Hunkerdown – “Wall Street jobs severely impacted”? Dude – market was cut in half and most of the financial firms (if still in business) are down well over 75%. Lending (yes some still need a loan) has been equally crushed. So you think buyers should come up with all the inventory not moving? OK I will if you say so…

  15. digler

    Many would-be sellers will have to unload their second homes before they sell their primary residence. There is a significant amount of inventory building up on the eastern seaboard. Nantucket has 700 plus homes for sale. So does the Hamptons. What effect will this have on the disconnect between buyers and sellers in Greenwich?

  16. SizeBuyer

    hunkerdown,

    who’s compensating I am having a little fun. You on the other hand sound like a little disgruntled cheated man perhaps your “inadquacy” forced you to overpay yet still “short changed” at the same time. Just settle down and enjoy your 50 year old split level.

  17. SizeBuyer

    and how is not buying a house compensation for an “inadequacy” that’s what your porsche is for tiny tim

  18. SizeBuyer

    The ultimate in stupidity…729 houses on the market and sellers feel it’s the buyers that need to make the first move.

    right…..

  19. SizeBuyer

    CF,

    are you not posting my comments?

  20. Ron

    I just heard that only 37% of homeowners in Greenwich have a mortgage…so the pressure to sell or sell for a fair price…just isn’t there.

    • christopherfountain

      I’d be awflly surprised if that were true, Ron. In my experience, all cash buys are the esxception, not the rule. It is true that a lot of high end homes took just a $million mortgage for the tax deduction, but a lot of high end homes are owned by people who are no longer high end themselves. But certainly, if you can hyang on for five years, this is not the time to sell if you don’t have to and don’t want to move.

  21. Two thoughts…

    1. Many of the higher end homes in our area are purchased by cash buyers. No loan.

    2. Zillow is for entertainment purposes, in my opinion.