Will Someone Stop This Madness??

Gideon Fountain writes:

Well, this damn good news just keeps pouring in!  Despite all the efforts of local, state, and federal government to hobble American businesses, things are improving anyway! First General Electric and United Technologies, then today, the worst news yet: Caterpillar reported a 44% increase in quarterly profits* and the hiring of nearly 5,000 people!  What the hell are these people doing hiring workers when they should be out buying canned goods and gold bars in preparation for the next crash??

And then, just when you thought Monday could not get any worse, Greenwich home buyers had to chime in with their “good news”: Reported today…

7 accepted offers, with asking prices as follows…

$14,000,000

6,000,000

3,300,000

3,000,000

2,000,000

1,100,000

800,000

Those numbers have been disguised somewhat to protect these new, still “fragile” deals, but the properties are located throughout the town, from the northwest corner, all the way to the southeast.

This is only Greenwich, I know.  There’s a whole lot of hurtin’ real estate out there in places like Nevada and Florida, but it is often said that towns like Greenwich lead the rest of the country out of recession, so…we shall see, shan’t we?

 

 

* “Profits”…ewwww! Evil! Bad!

 

40 Comments

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40 responses to “Will Someone Stop This Madness??

  1. The Duke of Deception

    The real question is…

    Can you get more stupid?

  2. Inagua

    The other question is…

    Why do posters like the Duke deny reality?

  3. xyzzy

    ok, lets play both sides of the game.

    22 Cherry Tree Lane Riverside. Just cut its price from 6.9m to 5.9m.

    Ouch.

    • Gideon Fountain responds….
      “xyzzy”: Regarding Cherry Tree Lane, I’d give the same advice to any property seller: Pick a number of showings or an amount of time that you are willing to sit around on the market…20 showings? 6 months? Whatever it is, after that, start lowering the price!

  4. Cobra

    “…they should be out buying canned goods and gold bars in preparation for the next crash??”

    Don’t forget to stockpile plenty of ammunition in useful calibers/gauges.

    • Gideon Fountain responds…
      “Cobra”: Ha! Some financial writer was being interviewed on [Doom&G]loomberg Radio last year, and they asked him if people should be buying and storing gold coins in case of “the big crash”. The guy said, “If you’re expecting a big crash, don’t buy gold, buy ammunition!”

  5. Rose- Colored Lenses

    Dead right Gid!
    Don’t forget there was an $11,000,000 land sale in town last week!
    The 1% are rolling along……
    LMAO
    The rest of us are screwed…

    • Gideon Fountain responds…
      “Rose- Colored Lenses”: You’re referring to the “1%” that pay most of the taxes? The “1%” that do all the hiring? If you really want to get away from “the 1%”, there are numerous countries to move to. All over Africa, South America, North Korea, Cuba…there’s no “1%” to oppress the poor, all you have is…the poor.

  6. Kimmy

    Did you reach the Greenwich Time article on Sunday about the
    Greenwich Reform Synagogue backing out of the Stanwich School deal? Could it be true that the Town of Greenwich is building low-income housing on the 11 acres owned by the synagogue? What are you hearing? Thanks.

  7. Cos Cobber

    Switching topics, I find it interesting that the Gwich times has not posted to their website their featured story on the Stanwich school financing/construction troubles. The standard operating procedue for the local Hearst newspapers is to post the featured story to the web the following Monday. I wonder if the paper has decided against posting due to the heat applied by the parties involved.

    If anyone cares to re-iterate the story, I’d appreciate it.

  8. Cobra

    “The guy said, ‘If you’re expecting a big crash, don’t buy gold, buy ammunition!’ ”

    The wisdom of stockpiling ammunition is two-fold:
    - The obvious functional advantage of having adequate means to defend yourself or to engage in offensive strikes to achieve one’s objective;
    - For use as bartering wampum. When the defecation hits the rotation, cash and gold will likely not be the most desirable “currency” with which to influence the behavior of others or to obtain required goods or services.

  9. Stan II

    Kimmy, I’m with you. Love to hear an explanation of how you can build condos and/or townhouses in 1-2 acre zoning. Can you give us a reading of applicable zoning rules in that area, Gid? Also, can’t wait to hear the reaction form the NIMBY neighbors

  10. Anonymous

    This post offers no insight bc it offers no analysis. Some houses sold. So what? Standing alone, the posted numbers posted offer zero information about the state of the market. How close to the asking price was the accepted price? Were the house/s that sold aggressively/properly priced for this market? How do the # of house sales at these price points compare to past years? I highly doubt any of these houses sold in one week after a bidding war circa 2006.

    • Gideon Fountain responds…
      “Anonymous”: Those “sales” are just accepted-offers. No one but the immediate parties involved know what price has been agreed to. On the other hand, I have recently posted large numbers of actual, closed sales. If you study those, you can see what the first asking price was, the last asking price, days-on-market, and finally, the sale price. Contrary to your opinion, when there are seven accepted-offers, across a broad price-range, in one day, that’s important news. This site is brought to you, by the way, free of charge.

  11. Anonymous

    Can we please have Chris back.

  12. Inagua

    “Some houses sold. So what?”

    So far this year over 475 houses have sold, which is more than last year, which was more than the year before.
    —————————————————————————-
    “I highly doubt any of these houses sold in one week after a bidding war circa 2006.”

    Nice Strawman Argument. No one says the market is as hot as 2006; only that the market has been remarkably active with firming prices since last summer. Why do you continue to deny the obvious? I understand being pessimistic about the future, but I do not understand denying the reality of the present.

    • Gideon Fountain responds…
      “Inagua”: Dude, right on! There is this weird, angry reaction from some readers to optimistic real estate news…what’s that all about? I’m stumped.

  13. thanking you

    Guest:

    Thank you, I appreciate your efforts, different but certainly not worthy of nasty comments. Those who don’t like your posts could of course just stay away.

  14. Daniel

    Charge for it and NOBODY will come. I kid.

    • Gideon Fountain responds…
      “Daniel”: Ha! But seriously, my point was, here’s this chap complaining because, gosh darn it, he wants real estate analysis…for free. I’m giving him/her loads more info then he/she had before but, well, it’s still not enough!

  15. Anonymous

    Responding to Gid 4:38
    Yeah but…….. You do have access to price reduction history. As a matter of fact, there are a number of properties that you listed as closed sales, that had substansive asking prices years ago, but were not listed as asking price on the cheerleader cheat sheet you presented. We dont expect you to do work on this blog but we do expect accuracy.

    • Gideon Fountain responds…
      “Anonymous”: All the listings show the “first” asking price during that listing cycle. Many listings go through two, three, even four brokers before finally selling and yes, their REAL first asking price, from years earlier, is not shown on the listing when it finally sells. As a paying-member of the Greenwich Multiple Listing Service, I have access to the full history of each listing but when I post, say, 32 recent sales, I simply cannot give historical background on all of them. If there is a specific listing that you want to know more about, just ask.

  16. The Duke of Deception

    So start charging a fee for content. Then, well, you know…

    “towns like Gereenwich lead the rest of the country out of recession” may be the single dumbest thing ever written, closely followed by all of Farricker’s “thoughts”.

    • Gideon Fountain responds….
      “The Duke of Deception”: Dukie, old chum, you’ve been crying out for attention and I’ve been ignoring you, I am so sorry! Maybe it’s because most of your comments are so…so…what’s the polite word for “moronic”? But seriously, you may have blundered into a good point with your caustic reaction to my statement that “Towns like Greenwich lead the rest of the country out of recession”. Perhaps I could have been more clear. I should have said that wealthy towns like Greenwich can act as leading economic indicators. When there are signs of renewed spending enthusiasm among the wealthy, that is always good for the rest of us (contrary to the usual liberal sneers about “trickle down”, it actually works quite well).

  17. Anonymous

    This is great info! Thanks so much. Any chance we can get the final missing puzzle of $500k-1 million?

  18. Daniel

    “but when I post, say, 32 recent sales, I simply cannot give historical background on all of them.”
    Why not? And don’t you think it would be nice to open up the MLS?

    • Gideon Fountain responds…”Daniel”: Researching and posting the actual original asking prices is time-consuming, that’s why. Still, it is important, so maybe, if you’re very nice, I will go to this trouble. As for “opening up the MLS”, it is a privately owned organization that collects and disseminates information to its paying members. If all the information was “free”, us paying members would immediately stop paying, and then there would be no money to pay the people who collect the info! (Think twice before making your next sarcastic remark. Remember what I said about being nice).

  19. Inagua

    Gideon – I hope you are right that the real estate market in wealthy towns is a leading economic indicator, but I suspect that this is not the case. It is also possible that the reduced number of substantial citizens is still willing to pay for places in paradise, while the vast majority of citizens are struggling with heavy debt and an inability to earn much in a stagnant economy.

    • Gideon Fountain responds…
      “Inagua”: Sadly, we’re both right. There is most certainly a “reduced number of substantial citizens”, but those that remain do seem to be spending more. The really frustrating part is the economic illiteracy of the President. He really, truly doesn’t have a clue how to motivate, inspire, and encourage business owners. All he can do is propose one worthless give-away scheme after another; debt forgiveness, meaningless short-term tax cuts, subsidies, all crap that ends up leaving us right back where we started. Phaw!

  20. Anonymous

    @Gideon, I’m with “thanking you”. I like your content even though I enjoy Chris’ wider ranging posts and more frequent updates and comment releases (you’re getting better!).

    I like the specific links to data that you provide, if somebody wants to they can spend a very long time analyzing the sales information in the last several links you’ve provided.

    As an aside, one of Chris’ sidebar links goes to Bubbleinfo.com run by a San Diego county realtor named Jim Klinge (Jim the Realtor). I first ran into him on various housing blogs starting right before the California housing market began to crash, I know him to be a longtime housing bear (if you will). A few weeks ago a short video he uploaded to YouTube was picked up from his blog and posted to the widely read CalculatedRisk blog and from there BusinessInsider picked it up and posted it. If you want to see somebody gutted as a know-nothing, scummy, lying, RE whore, go look it up. Even on CalculatedRisk, where he comments and many of his other videos have been posted over the last 5-6 years where commenters should know better. I just shook my head because most of the time he sounds more like Chris than you do. :lol:

    If you’re bored and looking for some time to kill, go watch some of his videos on foreclosures he’s handled, short sales, trashed houses, and overpriced houses decorated badly.

    Wow, sorry for the long comment!

  21. Appreciator

    Gideon, this is now truly a real estate blog! Thankyou! Bear in mind, though, there are always those wanting more, no matter that this is way more RE data/ discussion than they’ve ever gotten and unlikely to get on any other blog or other media source!

    Dang, in fact I couldn’t even get this comprehensive from my buyers agent

  22. Inagua

    Gideon – Yes, Obama is an economic illiterate, but so is John McCain, both George Bushes, Bill Clinton, and most members of Congress.

    But, IMHO, the two people most responsible for the crisis were Paul Volker and Alan Greenspan, both excellent economists, and in the case of Volker, a real hero for curtailing inflation in the early 1980s. But they both failed to treat mortgage backed bonds like corporate bonds and impose margin requirements. This is what allowed many financial institutions to turn themselves into mortgage hedge funds at 33 to 1 leverage. All Volker or Greenspan had to do after Lew Ranieri invented mortgage backed bonds in the mid-1970s was say that member banks could not loan more than 65% against these bonds.

    • Gideon Fountain responds…
      “Inagua”: That’s fine. As far as I know,, “margin requirements for mortgage backed bonds” might very well have been extremely preventative. But what started this whole disaster? It was unquestionably the infamous Community Reinvestment Act, signed into law by President James Earl Carter. This law “encouraged” (i.e. forced) banks to lower or just suspend their lending standards, all in the name of “helping the poor”. Banks made these bad loans and quickly realized they could unload them on (tax-payer backed) Fannie Mae and Freddie Mac. President Clinton kicked CRA into over-drive, and the rest, is history, sad, sickening history.

  23. Inagua

    Gideon – Everything you say is correct. There were many contributing factors, most of which were poor government policies. How else could half of all mortgages be sub-prime, but rated AAA? In contrast to our poor policies, consider Canada, which requires by law a 20% down payment. (There are work arounds, but the point is that all Canadian homeowners have real skin in the game.) Result? Ownership rates comparable to ours and no housing bubble or bust. That is intelligent financial regulation, something we are unlikely to ever have.

    BTW, here is an excerpt from an article on George Bush’s contribution to the bubble and his personal celebration of it at the time. Do you remember him touting “The Ownership Society?”

    >>Darrin West could not believe it. The president of the United States was standing in his living room.

    It was June 17, 2002, a day Mr. West recalls as “the highlight of my life.” Mr. Bush, in Atlanta to unveil a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.

    Mr. West had patrolled there as a police officer, and now he was the proud owner of a $130,000 town house, bought with an adjustable-rate mortgage and a $20,000 government loan as his down payment — just the sort of creative public-private financing Mr. Bush was promoting.

    “Part of economic security,” Mr. Bush declared that day, “is owning your own home.”<<

    George Bush's Administration gave this guy 100% financing because he was Black. I bet you can imagine how that worked out.

  24. Anonymous

    @Gideon, here’s the post on Jim’s blog that will link you to both posts on CR and BI that set off the latest rounds of RE agent bashing.
    http://www.bubbleinfo.com/2011/10/12/another-day-in-the-life/

    Also, if you go to his blog, he’s good about using his tags so if you find one REO post with video then you can click the tag and pick up most of them. He makes great use of both video and photos on his blog and by his tone, knowledge, and online “voice” he could be a long lost Fountain cousin. :lol:

  25. Anonymous

    @Inagua, have you ever read Liar’s Poker and, if so, what did you think of it? Your mention of Lew Ranieri made me think of the book, I have no financial background so I found it fascinating and pulled it back out to reread in late 2008.

  26. Anonymous

    Dang! Now if u could only be as honest and forthcoming about greenwich real estate as you are about politics

  27. Anonymous

    CRA had nothing to do with it. Yeah it was a bungled program, but a moderately sized blip compared to the overall market.

    Biggest driver was expansion of agency (Fannie/Freddie) bal sheets that drove both resi portfolio lending as well as explosion of securitized markets from all manners of lenders, both financial and non-financial.

    Risk transfer en masse was a natural outgrowth of that, i.e., it became a treadmill that could never be stopped unless something like events of the past few years took place.

    And the advent of synthetic markets that allowed shorting didn’t help either, because whereas borrowing the cash bonds to short required someone actually getting a hold of the damned thing(s), both CDS and the later ABX indices allowed folks to get their shorts on IN SIZE with less than a shorthair in real equity behind it. Thus that market became much, much more lopsided and no longer a zero sum.

    The broker dealers had their hands on both sides of the trade on those synthetic plays, because out one bunghole they yapped to certain market segments about locking in a spread to cover long term rate risk, yet the other bunghole allowed targeted shorting to their more lucrative clients.

    Oh well….life goes one.