Buyer/seller disconnect

A house at 11 Brown House Road in Old Greenwich sold for $1.665 million in July, 2009. It’s back on today – no improvements mentioned – for $2.050 million.  Hmm. Sellers seem to think prices have improved since 2009 while buyers think prices are down and going lower. This all makes it difficult for agents to effect a sale.

16 Comments

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16 responses to “Buyer/seller disconnect

  1. anon

    It is fair to say that overall values have continued to deteriorate since 2009, but if a sale occurred in 2009, it was likely a distressed deal. No one was selling even near peak numbers then. As such, I don’t think it is crazy to presume some appreciation.

    • But Anon, what was considered a “distress price” in 2009 (and Brown House did sell for $300,000 less than its asking) becomes the new market value and then proceeds to follow the market down. Sellers refuse to acknowledge this – for example, the builder of 25 (?) Beechcroft saw a similar spec house across the street sell for $6 million from an asking price of $8.25 but stubbornly refused to drop his own price of $7.9 because the lower sale was a “distress sale’. 25 is now, four years later, going off in its own distress sale somewhere in the $3s, which will pay off the construction loan and nothing else (like the millions advanced from the builder’s own pockets or the interest and other carrying costs incurred over all those years). Live and learn.

  2. Anonymous

    Given transactions are up from 2009 and prices are flat, I don’t really think facts agree with your statement.

  3. Anonymous

    Nope, facts are stubborn things…

  4. Anonymous

    The market is not liquid enough to do a comparison of ’09 buys verus ’11 sales of the same house. The sample size is way too small to be meaningful. However, are you disputing the numbers of sales are not up from 09? Or that price/sf is not basically flat to up slightly? Not sure what you are arguing. It’s like arguing 1 +1 = 3. You’re not going to win.

  5. anon

    From this chart, it appears that prices in the Fairfield County area are lower than two years ago. Maybe Greenwich is an anomaly? A builder who tried to get me to invest money in a spec house he built in 2007 told me, “real estate prices in Greenwich NEVER go down.”

    That guy is no longer in business, and my neighbors who insvested with him lost their shirts…

    http://www.zillow.com/local-info/CT-home-value/r_11/

  6. Anonymous

    You can look at Greenwich values in that chart, they have been flat to up since bottoming late in ’09. Ditto for Darien and Westport. If there is data showing otherwise, please post. But please don’t repeat it’s true because I said it is. It’s just not compelling.

  7. Anonymous

    The tax assessor dropped values for 2011 with a 2010 assessement that showed values were down 11-15% from the last assessment in 2005. You’ll see the same data in the Zillow charts showing a decline in home values in 2010 compared to 2005.

  8. Anonymous

    Folks, this debate will seem like just a lot of hot air next year. It will take decades for real estate to trade back to it’s old high and most likely we have another major leg down. There is absolutely no stability in the current world. There is a lack of political leadership in the USA and Europe. In many ways, the current environment in the USA is eerily similar to Germany during the Wiemar Republic. Historically, these types of financial problems are solved by Wars. When the angry (and armed) mob heads to Greenwich, the only real estate that will command any premium will have safe rooms, bomb shelters, electric fences and armed turrets. Architectural Digest cribs won’t mean “jack” after the revolution and you may not want to tell people that you are from Greenwich!!

  9. Anonymous

    Chris,
    Have you seen the house at 353A Sound Beach? What do you think that’s worth. I’ve heard it may be a short sale.

  10. armonk

    In 2009 brokers were saying that we were at the bottom. I guess they were right.

  11. Anon

    Having sold a house in 2008, and then bought/sold a house in one of the nicest suburbs of Boston in 2008/2011 (mind you, a region that has held up BETTER than the NY suburbs to include Greenwich), I can honestly say that sellers in this area do need “religion”. I truly believe this town, particularly the Riverside/OG area, is one of the most beautiful as well as preserved “small town” areas on the East Coast. Still #s are #s, and specific to my experience, Boston #s are down nearly -20% from ’08 list prices to ’11 sale prices and have declined further from Spring to Fall 2011. NY ‘burbs have been on avg -300bps weaker to Boston (see Case Shiller data index for support here) and NY area “sale” price levels will be even lower come the Spring of 2012 as Wall St bonuses are undergoing a permanent re-set courtesy of DC regulation. What this all means is real estate in Greenwich remains a price discovery experience until a home sells. Realtor agents may well need to look back 10 years to see where prices are going to end up on a per sq ft basis. Why? Because Wall St pay and overall consumer deleveraging is also going back to the levels of a decade ago. Bottom line is that real estate here is concretely tied to Wall St. As pay there permanently re-sets (not to mention employment levels materially drop off), real estate prices here will be forced to adjust. This is the cold reality of the world we all now live within. It’s pointless to argue “assessor” figures, as when has a government office ever estimated real time market prices correctly (see Fannie Mae, Freddie Mac and DC free $$$ hand outs in 08-09 to Wall St for data pts of support here). In the end, real estate in Greenwich is in for a severe price correction. The headlines on Wall Street and for that matter Main St say so…..