Monthly Archives: June 2005

Beware of Bidding Wars!

Not long ago, at the height of the spring market, the owner of 20 Partridge Hollow Road conducted a bidding war for his property. Several buyers bid, one won, the others lost. But one of the losers, frustrated at not getting what he wanted (a situation buyers in this price range rarely encounter) contacted the seller directly and offered to top the winning bid. The seller reneged on the first deal and accepted the loser’s offer. Not nice, perhaps, but certainly entirely legal – in real estate, no deal is final until both parties have signed a contract. But now the property has been returned to the market so I presume something went wrong. I wish no ill to the seller or his buyer (who is rumored to have forfeited a $700,000 deposit) but the original wining bidder could surely be excused some small measure of shadenfreude here at other’s discomfort. Morals of the story are one, curb your enthusiasm and, two, if you’re dealing with people who don’t like playing by the rules, don’t be too surprised if they walk. Good faith goes a long way in this business.

Market Conditions

I just reviewed this May 1- June 14th’s sales activities with the comparable period from last year and, all in all, I think sellers should be reassured. We’re not in any sort of boom but neither are we slumping. In essence, sales activity is just about where it was last year. A couple of exceptions: thirty-three houses went to contract for under a million dollars compared to twenty-five last year; sixteen went in the $1-$1.5 this year, thirty-three last; and ten went for $2-2.5 vs. only five last year. Other than that, there is not much difference. A total of one hundred ten houses went to contract in the past six weeks compared to one hundred nineteen last. Top price this year was $18.750 (asking – originally priced at $44,900,000!). Last year, $15,000,000 (from an original price of $25,000,000). Neither a bubble nor a bust, in my opinion. And as always, well-priced houses move quickly, pie-in-the-sky houses linger.

Case in Point

510 North Street was originally placed on the market September 30, 2002 for $11,500,000. After a long series of price reductions and a change in brokers it was finally marked down to $6,850,000 and was sold (by Diddle McCalister of Round Hill Partners – yeah, Diddle!) for $6,550,000. September ’02 to June ’05 is a long time to keep your house in showing condition, in my opinion.

Beechcroft Road

A friend of mine who lives on Beechcroft Road recently showed me three neighbors’ houses all of which are scheduled for or in the process of being replaced with larger homes. At least two of the projects are being done by the owners themselves, who have rented elsewhere for the duration. I think these are smart people. Beechcroft is a very nice street with a great location: far enough off North Street to escape the noise, close enough to town to be really convenient. In effect, the street’s value has grown past the houses originally placed there in the 1950s.

Where’s Herbie?

The retirement of Herbie Salamon from our police force removed the last traffic cop who was willing to yell at errant pedestrians. This is too bad, for a number of reasons. One is that I miss the street theatre – nothing more fun than watching Herb bark at breezy jaywalkers. Another reason is more serious – when I’m in a car and am directed to proceed across the Avenue by a cop, I don’t (or didn’t) expect to encounter any obstacles in my way, like mothers pushing their kids in strollers right into my path. But they do so now, without so much as a harsh word from the cop controlling the intersection. I really don’t want to run over a small child and I wish we’d get back to enforcing street crossing rules.

Do It Yourself

I see in the paper that the owner of a small house in Riverside sold it himself for $665,000.00. That move saved him from paying a real estate commission, but I wonder how pleased he’d be if he knew that his house was worth, at least in my opinion, somewhere close to $750,000? We’re hardly geniuses in this profession but what we can bring to the game is experience and knowledge. If you’re tempted to sell your house yourself, at least make a diligent effort to learn what comparable houses are selling for. Owners can over-price their property just like Realtors, and then the house will sit, unsold. But if you under-price the place, then, unlike what happens to a house exposed to the market on the Multiple Listing Service, someone will snatch it for a bargain price. And you’ll never know it.

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Summer Market

69 new listings came on the market last week, 57 houses dropped their asking price and 26 listings went to contract. That’s pretty slow, compared with earlier in the year. But the market’s not quite dead – I hear that 272 Riverside Avenue, property that can be split into two lots, is going to sealed bids on Monday noon. Asking price was $3,000,000 and presumably it’s going to sell for more than that.

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For Sale By Owner
I saw in the paper yesterday that 21 Thornhill Road, in Riverside, sold for $665,000. The seller did it himself, by God, and saved paying a commission. That’s nice, but his property was probably worth $750,000 for its land value alone. If so, then our seller saved $37,500, but lost the $47,500 extra a competent broker would have netted him. His choice, of course, but I think it was a bad one.

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For What It’s Worth – June 17th

Caution: Geniuses at Work!

Our Legislature racked up a surplus of $700,000,000 this past year due to a recovering economy. Some people would interpret that as a sign that the tax rate was too high, and would advocate adjusting taxes so as to return the surplus to those who over-paid. “Some people” are not the folks in Hartford. They didn’t return any money. They didn’t hold spending at its current. Instead, they committed the entire surplus to brand new spending in the coming year and, not content with such small potatoes, whooped through another $700,000,000 in new taxes. Besides prolonging the “temporary” business profit surcharge, they reinstated the inheritance tax which had finally expired this past January and, while they were at it, jumped it to a whopping 16%. Sound scary? Does it seem that the lunatics have taken over the asylum? Well don’t worry, this is all aimed at those people Howard Dean’s labeled “Fat Cats” – rich, white Republicans who all look alike, to Dean and the yahoos in Hartford. Own a house in Greenwich? Have a life insurance policy? Then welcome to the ranks of Fat Cats. Next year, the “millionaire’s tax” – you’re one of them, too.

In a news story concerning the new business taxes a Verizon executive was quoted as saying that Connecticut is already one of the most expensive states in which to do business. If people can’t afford to run businesses here and can’t afford to die here, I wonder where the Legislature will find the wherewithal to fund all its magnificent new spending? Connecticut is rapidly becoming a kleptocracy, an oligarchy of thieves that preys on Fairfield County and treats it with contempt. I’d say that we deserved better but, since we keep returning these pirates to office, I suppose we don’t.

And Yet Another Einstein

Finished with ripping off citizens, our leaders turned their attention to another serious matter and banned the use of hand-held cell phones. Our own representative, Bill Nickerson, pressed to distinguish between the distraction caused by eating a Big Mac and speaking on a cell phone, pointed out that when you press a hamburger against your ear it is really messy, so the distraction won’t last as long. I have absolutely no doubt that Mr. Nickerson made this observation from personal experience but I do wish that he and his colleagues would at least occasionally depart from enacting laws based on anecdotal evidence and try using informed fact, instead.

We’ve all been annoyed at some idiot on a cell phone cutting us off or wandering across traffic lanes but every study that has looked at the matter has concluded that it is the distraction itself that causes accidents and not the source of that distraction. That is, arguing with your kids in the back seat, tuning your radio, even stuffing hamburger patties in your ear a la Nickerson are all equally likely to cause an accident as a hand-held phone. This is known. But knowledge and the Connecticut Legislature rarely intersect.

And Finally

Did you see that our friends in Hartford passed a law exempting their email from disclosure under the Freedom of Information Act? Did it in the dead of night, tacking it onto another bill. They claim it’s a service to their constituents who will now feel free to communicate personal problems to their representatives. Right.

Rant Over, Back to Real Estate

So much for the legislative summary (it’s been a slow week in this business). You ask (I do, anyway), what’s the best value on the market? Perhaps it’s Joan Epand’s listing at 20 Interlaken, off of Taconic Road. This is a 9,000 square foot contemporary on six acres of land that includes a separate lot of three acres, a pond with canoes racked and waiting on the shore, a guest/bath house with a huge fireplace (I’d be content living in just this structure alone) and a great pool. The house itself is of beautiful design and in very good condition so I’m a bit irked that it hasn’t sold – the Greenwich market just whacks contemporaries. Its price has been reduced from $5,999,999 to $4,300,000 – that’s the value of the two lots. You could sell off one lot and get yourself a terrific, huge house for just the price of the land it sits on. Free house – an unusual opportunity in this town.

Also On the Market

I liked Jim Foote’s listing at 24 St. Claire Avenue in Old Greenwich. It’s a six bedroom 1950’s house renovated ten years ago. Not the quality level you’d find in, say, Conyer’s Farm, but decent enough, and the resulting house is bright, airy and roomy. $2,695,000 – which I think is in the ballpark for this area and this house.

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44 Riverside Avenue sold yesterday for $890,000, down from its original price of $1,290,000. Why? Because, although this was a very nice house, you could practically reach out your window and pat the tops of trucks rushing by on I-95. What I find impressive is not the low price but rather this demonstration that, at some price, anything in Riverside will sell, regardless of its location.

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Price that puppy right!

510 North Street finally sold yesterday for $6,550,000. I’m sure the owners are relieved. They originally listed it, way back in September 2002, for $11,500,000. When they dumped their broker and priced it better (last asking price was $6,850,000), it sold. Quell surprise.

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Revenge of the Buyers!
A few weeks back the owner of 20 Partidge Hollow Road conducted a bidding war for his property. One buyer won, others lost, but one of the losers called the owner directly and offered to top the winning bid. The owner accepted that offer and reneged on his deal with the winning bidder. Well, something must have gone wrong because the house has been returned to the market today. I don’t wish ill on the owner but the people who engaged in that bidding war in good faith surely must be feeling a certain smug satisfaction. And who can blame them if they hope that the house lingers all summer, now that the spring market has ebbed?

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