The Sound of Crickets

(Pictured somewhere on this page, the empty stadium where once sat thousands and thousands of Chris Fountain fans)

Gideon Fountain writes:

Well, it’s just you and me talking here, Frank old chum, since you pissed/scared off all of Chris’s loyal readers, but on the off-chance my Mom still checks in, I’ll respond:

You create a straw-man when you suggest I am arguing that sellers should hang in there, “waiting for the right buyer”.  That is precisely what I’ve argued against my entire career, for the simple reason that it never, ever, ever works.  What you and Chris can’t seem to grasp is that there are markets within markets. The section of town called “Riverside”, for a variety of reasons, is selling very well this year.  Are there some over-priced properties in Riverside that are not selling?  Yes. But are Riverside prices holding up much better than the rest of town?  Unquestionably.

P.S.  We probably should just switch to voice-mail, what say?

Who has the money

I truly wish Gideon is correct, and that Greenwich is a deep pond of wealth and success in real estate. And I also concur with the notion that if one were to just drop 25% off the asking price, the odds of success are not great. I don’t think the issue these days is the buyer being too greedy, thinking their money is somehow worth more than the seller’s money. I think we are at an expectations juncture that has to be broken somewhere, and when it does I believe prices will either fall rapidly, or solidify quickly.

In Greenwich, there have been 65 sales in the $4-$7 million range – same as Gideon’s Club Road property – in the past year. However, there have only been 26 in 2011, and there hasn’t been a closing since July 29, almost two months. Of these 65, five sold for the asking price or slightly above, most traded for between 6-11% of the LAST asking price.  Three houses have contracts reported, but continue to be shown, meaning there isn’t even a written contract being executed yet. Yet there are 99 houses active in this same price range. This is a multi-year backlog, with evidence of slowing possibly pushing out more.

Additionally, time on market has been exceptionally long. While pulling on and off the market makes reporting time short on your computer, it is long in real life. Some properties in this group have been on and off for six or seven years. 404 Round Hill Road, for example, was first listed for $8.5 million in 2005 before selling in 2011 for 5.0 million.

It might be easy to decide there is no slowdown in this price range if your sellers seem content to have people tramp through their houses for years until someone “pays their price”, then someone who has $5 million cash in this market goes ahead and just does it because of a water view, or a great kitchen, or an address. But the numbers would indicate that, if you’re waiting for that greater fool to sell your house, it may be you and your pool is diminishing rapidly.

Fudrucker’s Advice

This Club Rd property sold for $5.3M June 2011

(Pictured above, CT Lottery Spokesman Frank Farricker)

Gideon Fountain writes:

Leaving aside the bitter, bitter irony of a CT Democrat like Frank Farricker advising readers to “hold on to their wallets”, what does Frank, or, for that matter, Chris Fountain, mean when they say I am “optimistic”? I can trigger this accusation from either of them by predicting a much higher sale price for a particular property than they can imagine.

Let’s consider my previous post about that Club Road property. It’s not on the market but based on a couple of recent Club Road sales, I confidently predicted that it would sell for as much or more than it sold for in 2007.  How do I know? Because unlike Frank or my brother, I have been in all three of these examples and I have shown them to real live buyers. I know what my customers bid, or would have bid, so I have better market knowledge in this price category.

If the Club Road property I used as an example (sold for $5,350,000 in 2007) actually did suddenly come back on the market, a typical buyer-broker, armed only with the “knowledge” that Greenwich real estate values are down 25%, would take out his little calculator, multiply $5.350M by .25, and proudly advise his client that the place “isn’t worth a penny over $4,012,500″. Great advice, he’s just saved his client $1,337,500!  But his client’s bid will not result in a sale.

This Club Rd property sold for $4.3M in December, 2010.

On the Road Again

Off to do the people’s work in Hartford today (or the People’s work, for some of you), so I leave you in the capable hands of the most optimistic agent in Greenwich today (please sell our listings, Gideon. They are lovely homes. 1093 King Street – ML#79953 - is the nicest renovation I’ve ever seen in that range).

So watch your wallets until I return, and maybe think of this alternate house in Riverside. 10 Lake Drive South, it has all the best of Gideon’s house on Club Road, just a few million less – and closer to the train. These people seem to feel a downturn, because they reduced the price from a 2008 “ask” of $2,295,000 to a more reasonable $1,795,000. Seems that, like Rick Perry, Seller got religion. ML#80452 for all you Zillow-heads out there.

Downturn? What downturn?

Riverside property worth as much or more than what it sold for in 2007

Gideon Fountain writes:

By January 2009, Apple’s share price had dropped to $78. Today, two years and eight months later, Apple reached a mid-day high of $422.77, finally closing out at $413.45, representing a 530% increase since those dark days of ’09.

Has Greenwich real estate done as well in that period?  No. But real estate, at least the type I sell, first and foremost provides a place to live. It’s not supposed to surge in value like the stock of a well-run, profit-making enterprise. During that period, in fact, a lot of properties in town dropped about 25%. An $8,000,000 back-country Greenwich mansion, for instance, is now worth around $6,000,000.

So is it safe to say that Greenwich real estate is down 25% from its peak? No. Here’s an example of an exception:  The property pictured is on Club Road in Riverside.  It went to contract December 14, 2006 and closed January 31, 2007.  The asking price was $5,500,000 and the selling price was $5,350,000. But if this property were to come on the market today it would sell for at least $5,350,000 and, more likely, as much as $5,800,000. The reason is, there’s a scarcity of this kind of property in Riverside, but there are presently too many 10,000+ square foot mansions available in other parts of Greenwich. 

An example like this shows that you can’t make blanket statements about even one town’s real estate values, so consider how pointless it is to make blanket statements about real estate nationally.

C’mon, really. You like this guy?

Rick Perry is a lot of things, one thing he is not is coherent. Huntsman could beat Obama, although he’s dead in the water, Romney is a real threat, but this guy?

http://www.businessinsider.com/rick-perry-basically-emceed-a-pro-israel-rally-today-to-get-cozy-with-new-york-jews-2011-9

I guess Chris’ credit cards aren’t working

http://www.bankrate.com/financing/credit-cards/waitress-scams-bad-tippers/?ec_id=m1078091

When it it just a nice place to live

This house at 37 Ridgeview has a lot going for it. It is in a neighborhood that people ask me about all the time, it is close to Town – which seems to be in demand these days – and it appears to be well kept. However, because of the lot size and regulations, you got what you got. +/- 2,000 square feet, 3 bedrooms, you’ll need P and Z permission to stick your pinky out of the window.

If you’re a dreamer, thinking of kids, like to have big throwdowns, the place probably isn’t for you. However, its good shelter, and comparable in price to smaller condominiums in town. Priced at $1,295,000, that number is almost exactly a 3% annual increase from its 1994 sale of $795,000. Since I tend to trust 1990′s sale numbers, I’m willing to say that the house has kept up with inflation, but just that.

If you want a nice place to put your head down at night, don’t need or expect to make profits, and are comfortable with depreciation and/or mortgage interest deductions, you should look at this place. If you even know what CNBC is, its probably a pass

While I was away

Since Greenwich real estate isn’t moving much this week (15 new properties, 12 price changes, 2 contracts), I’ve been busy selling condos in Manhattan. I have some Israeli clients who appear to believe that NYC is a great place to purchase. Its fascinating what metrics drive their decision-making, as a 4-5% return and unspecified tax advantages seem to be pretty attractive. Israel appears to be a far more liberal place with their finances – when I stayed there in 1986, monetary policy was so tight they practically made you turn out your pockets so you couldn’t leave with any money. Now, to my benefit, not so much.

Anyway, they are buying here www.thealdyn.com. Good thing I kept the New York license

 

Frank

 

Shameless Plug

For those who like all things Indian, one of my cricket “mates” (Americans aren’t allowed to say “mate”), here are a couple of restaurants to consider. Spice Affaire (www.spiceaffaire.com) is the finest Indian in Stamford, in the Hampton Inn, just around the corner from Bloomingdales/UCONN. Tell Shelly that Frank sent you – and not at your own risk.  If you get out into NYC, Ravi offers a brand new spot, Indian Creperie, on MacDougal and Bleecker. They open in a week, so be the first to know!

If you have the slightest interest in cricket, check out www.thirdmancricket.com . Bet you didn’t know the Chennai team in the Indian Premier League imports its cheerleaders from America and the Ukraine. Exports! http://www.youtube.com/watch?v=_7vWVnG6B3c

Rent Stabilization

Frank here…………Here is where I agree with my more conservative bretheren – rent control laws are plain idiotic. I confess to onetime thinking it a great thing, a way of equalizing. Of course, I was probably just angling for a cheap apartment. Nonetheless, 8-10 years working within that system made it pretty clear that controls actually choked out the working poor, rather than reinforced their ability to live in New York (or Port Chester, for that matter. New York is stabilized almost throughout). This rule http://greenline.stnicksalliance.org/?p=83 was by far the dumbest. If somebody moved out of a rent stabilized apartment, you could only return it to market rates if you did enough repairs inside the unit so that 1/40th of that work, added to the exiting rent, exceeded $2,000. Then, of course, you could rent it for whatever you want. The result was a building with slums door to door with apartments so costly they had to rent for 15-20 times what the neighbor did to break even. That was an investment spiral that could never reverse, so inevitably the whole building would go ultra-expensive. Boom, no affordability. So, housing advocates figured they would stop owners from doing this by making it more expensive to “deregulate” by increasing the fraction to 1/60. Makes no logical sense. If Cambridge MA could do away with controls, anyone can.

Actual Real Estate

Frank here…………..Spent the weekend actually working. As it happened, three clients were buyers of small multifamily houses. Two and three family houses are pretty much the same anywhere in Connecticut, so the trips through Greenwich, Stamford and Bridgeport kind of looked the same. Problem was that it didn’t seem that any of the owners had the slightest grasp of basic math. Rent + rent – property taxes – maintenance and management is supposed to not = a loss. Pricing seems to be based upon a combination of “what I paid”, “Greenwich never loses money” and “you could convert it to a lovely single family”. The last one is code for “through economic principles out the window because it has a lovely front porch”. Stamford is no better prospects, as the amount of overpaying in 2005-2007 has left a lot of economic wreckage with radically lowering rents. You can buy a three family house in Bridgeport for $30,000, however you would have to live there to be closer to Housing Court. We keep looking, but these are barren days for actual real estate investors around here, at least until sellers learn the difference between facts and fantasy

Greenwich Police Raid “Illegal” Republican Clambake

Happy Repubs enjoying annual clambake at Tod's Point.

Local Democrat leader Frank Farricker, riding an electric moped, firing a starter’s pistol, and waving a light blue United Nations flag, staged a bold, early afternoon raid at a gathering of Cos Cob Republicans holding their 81st annual clambake at Greenwich Point, Sunday.  Police appeared to be following  Mr.Farricker’s lead, although it was later learned they had come only to warn Republican officials that cars parked in the road would be ticketed.

Not to be dissuaded by the lack of police interest, Farricker reportedly rode his moped directly into the crowd, briefly scattering some clambakers, until he was wrestled to the ground by a group of 6-year old Republicans, angered by the disruption of their game of tug-o-war.

Mr. Farricker, unhurt in the struggle, then proceeded to announce a “citizen’s arrest” of State Representative Freddie Camillo, on the charge of improper recycling (Camillo was apparently observed placing a plastic cup into a container clearly marked “cans only”).

When last seen, Farricker, screaming “Fascists! Greedy Billionaires! Comes the revolution, you’re the first to go!” was being lead away by police.  His whereabouts this evening are unknown. He is considered armed (sort of) and extremely silly.

Wish I had this problem

I’m supposed to be one of those small business job-creators that the Republicans talk about. If they like, I’d be happy to switch places with a millionaire and I promise  to pay the new tax, and I would be able to create about 10 new jobs. Seems fair

 

http://www.foxnews.com/politics/2011/09/18/rep-ryan-accuses-obama-waging-class-warfare-with-millionaire-tax-plan/

 

Veterans Housing

I’ve worked with a number of groups to try to build housing for Veterans in Connecticut. Quite complicated, as there are multiple situations that Veterans, depending upon their personal circumstances, face. They’ve done a lot, but they ask little. But its hard to build a house they can buy for $200k. Going to the VA in West Haven can be complicated. So, would you accept a subdivision far larger than those around you in your neighborhood if it was reserved for Veterans?

 

http://www.rebuildingtogether.org/section/initiatives/veteran_housing

 

Your Liberal Wisdom for the Day

No Lamestream media here, ya betcha’.

 

http://www.dailykos.com/story/2011/09/16/1017452/-Scott-Walker-retains-lawyers,-stays-silent-in-FBI-corruption-probe?via=blog_1

http://www.balloon-juice.com/2011/09/08/tonights-speech/

http://www.washingtonmonthly.com/political-animal/2011_09/when_the_parts_are_more_popula032267.php

Name, Rank and Serial Number

Not wanting to weird out the assembled readers, I’m trying to get WordPress not to put up Chris’ name all the time. Naturally I can’t figure it out. So I am waiting for my 10 year old son to come home. Patience.

Short Sales

You are trying to sell a house. Seller acts like a jerk – he holds out for $5k, $10k when the place has been on the market for 3 years. You wonder why. Then you stroll down to Town Hall and find out that Mr. Jerk – and its always the dude – is so under water he’s hanging out with Jacques Cousteau. Liens from credit card companies, hasn’t paid in 18 months. But damn, you’re not getting my house for any less than its worth, he says. Finally he gives in and signs a contract. Then, you go to a short sale.

Then, you spend 6 months on the phone speaking with people who were hired because their boss rooted around the McDonald’s dumpster fishing for rejected applications. You think government bureaucracy is bad? Try Chase, Bank of America, Litton Loan. They make DMV look like the Swiss

http://processingshortsale.com/blog/2010/09/dealing-with-the-banks-your-horror-stories/

I may be arrested for posting this

Remember that cute “bill guy” from the Schoolhouse Rock cartoons? “I’m just a bill, yes I’m only a bill……”He made perhaps his first appearance in years yesterday on behalf of “patent reform”. As I understand it Amazon has a patent on “one-click shopping”, meaning you need to make a useless “second click” before buying something online as to not pay a royalty. This is, of course, stupid. And the bill doesn’t do anything about “patent trolls”, people who either buy up vague patents or launch them themselves, then wait in the weeds until some start-up is primed to be sued out of business.

Wish the government had done something about this competiteveness-killing practice, but instead we get this. Never be wary of what Congress does, always be wary of what they don’t do.

 

http://www.cnn.com/video/#/video/politics/2011/09/16/bts-obama-patent-act.cnn?iref=allsearch

Ice Cream: Second Best To Candy

Alright, second best I know, but I understand the very powerful need to avoid making fun of Ayn Rand. I give you one dull post then I’ll let loose so the blog will be as abjectly wrecked as Fountain’s office desk (don’t ask). So that you may have some idea of where I come from, I’m born in Greenwich, GHS Class of 1982, Chinese Studies major at George Washington University, former resident of New Zealand, Australia, Israel and Ireland, MA from Columbia in Real Estate (i.e.dirt).10 years in NYC real estate with the irrevocable scars to prove it, 4 years here in Greenwich selling property and creating real estate projects. I’m the Chairman of the Connecticut Lottery Corporation and of the Greenwich Democratic Party, Treasurer of The Mary Fund, a hospice charity founded in 1979, Board Member of CTE, a liberal conspiracy in Stamford. I’m on the board of the Mad Dogs Cricket Club where I act as sometime wicketkeeper, have twins (Christian and Alexandra) who swim and play water polo at Rocky Point and a wife, Cathy, who clearly has issues to have been with me since 1994. When I’m not doing the above, I meet with my secret cabal to fix real estate prices for the benefit of welfare queens and actively subvert the original intent of the constitution. You can find me at ffarricker@ebtrealty.com or at (203) 554-6140.