Buyer’s Market? No, A Return to a Normal Market

Year-to-date, sales of residential units in town are down 6% from 2004 but cash volume was up 1.6%, for an annual appreciation rate of 7.6%. Nothing awfully alarming here, but there’s another statistic that ought to give Greenwich sellers pause: the “wishful appreciation” gap, or the difference between what new listings asked for this year (17.7 % higher than 2004) and the actual appreciation of 7.6%. In other words, home sellers over-estimated the value of their house by 10%. Until that is acknowledged, houses will linger on the market (inventory is up 16.4%). If yours is one of them, you know what to do.

The Market has Moved Online

A recent analysis by Real Trends reveals that, for every marketing dollar spent by the real estate industry, 39% goes to newspaper advertising and only 11% for online marketing. The company suggested that the industry model reduce newspaper advertising to a mere 10% and bump online expenditures to 52%. I think they’re right; more important, so does my employer, who is already all over the internet and committing to more. Homeowners want to see their house advertised in print, so we all do it, but it’s not an efficient way to distribute information to buyers. The current model for advertising in Greenwich is this: each house is showcased, in a cycle, every few weeks, for one day each time. Open houses are advertised in row after row of small photos and the consumer must wade through them all to find houses in her price range that appeal to her. If she could instead specify a price range, click a button and immediately find every relevant open house that day, with directions, or every listing, wouldn’t that be easier? That’s why the industry has moved online and that’s how your house is going to sell. It’s all about price and accessibility of information; not about how beautiful your house looks in print.

Contra Dancing Right Here In River City

Although the history is murky, the name “Contra Dance” probably began life in 17th Century England as “Country Dance”. The dance form was adopted by those cheese-eating surrender monkeys, the French, who changed the name to contre dance and tried to claim it as their own. Ha!
Or so says the Oxford English Dictionary (sort of). Regardless of the difficulty in tracing its name, however, the dance itself is rather simple to describe: dancers form a series of lines next to each other, males alternating with females. A “caller”, backed by musicians –a fiddle, often a clarinet or accordion and other instruments, depending on the style of the band – explains each new dance’s moves – usually four different moves to a cycle, or about 30 seconds spent with each partner. The dance couples practice by completing the moves – the final is a spin – and then switch partners, with the male moving down the line, the female up. When everyone is somewhat confident that they know what they’re doing, the caller strikes up the band (which plays reels and jigs) and the dance begins.
Often, there is a lot of confusion at first, especially when the lines are filled with inexperienced dancers like this writer. But by the time everyone has worked through the line, their moves are less awkward and fewer mistakes are made. So, moving back down the line a second time the dancers really begin to have fun; they don’t have to think so carefully about what they’re supposed to do and can just enjoy the music and the movement. Of course, when that dance finally ends, everyone has to learn a new series of moves for the next one. Life is like that.
Its fun, great exercise (you’ll be sore for days), a teens-to-octogenarian activity and you can find it right here in town at the Round Hill Community Church where they’ve been holding such dances the second Saturday of every month since 1974. By tradition, and because many of the earlier dancers were Brunswick and Daycroft grads who wanted to see their friends, there is also a Thanksgiving weekend dance, tomorrow 8:00, with a beginners’ class at 7:30 (there’s an “experienced dance” from 4-6 but if all this is new to you, you probably aren’t going to that). Cost is usually $10 but it’s $15 tomorrow, which covers the cost of the band, use of the hall, etc. You’ll spend more than that at your Lotte Berk class. Come as a single or a couple – you switch partners after each dance, women and men ask each other to dance and age, size or pulchritude is irrelevant, lucky for me. Www.Roundhill.net for further information.

Thanksgiving

While there isn’t much going on in the real estate world this week before Thanksgiving, a lot of people associated with the industry are showing their gratitude. The Greenwich Association of Realtors, no slouch during the rest of the year in raising money for, among other organizations, Greenwich Red Cross and Kids in Crisis, has raised something like $25,000 for hurricane relief. Considering that many agents had already contributed independently, it’s an impressive sum. The Realtors in town are really good about giving back. My old firm, Round Hill Partners and the people at Shore & Country participate in “Christmas in April”, fixing up houses for those who can’t afford to. My new firm raises (a lot of) money for the Breast Cancer Alliance as well as being a soft touch for just about every charitable organization in Greenwich. Other firms are just as generous. My point here is not to blow my horn (too loudly) for the wonderful folks in real estate but rather to suggest that, just like so many of their fellow residents, they appreciate their good fortune to live here. Besides the high-society fund raising parties (which, wisely, no one invites me to), a lot of people in town work in the trenches: Dr. Rob Michler and his volunteer team who travel to Central America to perform heart surgery on children; drivers for Call A Ride and Meals on Wheels; Red Cross volunteers, and on and on. Despite our image around the rest of the country and excepting access to our beaches, we are a generous town.

Green Demolitions

Here’s another organization I like. Steve Feldman, its president, came up with the idea of homeowners donating their (soon-to-be-demolished) kitchens and baths to his non-profit charity which in turn sells the countertops, appliances, whathaveyou to the general public and building trades. The proceeds benefit a non-profit organization, The Answer to Addiction, which claims a very high (no pun intended) success rate. What do you, the homeowner, get out it? Plenty. First, a nice tax-deduction based (your choice) on your own assigned value or, because Green Demolition keeps meticulous records on every item contributed, its actual sales price. You save on dumpster fees which are about $700 per these days. You save on your contractor’s labor fees because Green Demolition uses its own trained, insured workers do the demolition. You help keep things out of landfills, as well. And, of course, you’re doing a good deed. Not bad, when you can have a feel good experience and put money in your pocket at the same time.
This is not a call for someone’s twenty-year old Kenmore range, however; there has to be a resale value or it doesn’t work. It would shock you, though-or perhaps it wouldn’t – to know how many nearly-new, top end kitchens and baths are tossed out by new owners who want to start anew. In fact, you may be more interested in buying what your neighbor threw out. Either way, Steve is in Riverside and can be reached at (203) 969-4345. Greendemolitions.org.

Blue Grass

One of the projects Green Demolitions supports is a blue grass band, Basket Landing, comprised of five young people 15-30 years-old. They’re playing a repeat performance at Arcadia Coffee House in Old Greenwich November 25th. I missed them the first time through but they got rave reviews then and will presumably do so again. 7:00 pm, admission five bucks.

Real Estate, Finally

There is still some life in the market, of course. Thirty-two houses went to contract last week, including 11 Red Coat Lane which I liked very much. Thirty-eight price reductions, one price increase (20 Church Street – there’s a contrarian!) and sixty-six new listings (even if a lot of those are retreads showing up with new agencies). So if you’re already bored with holiday preparations, go house looking.

25 Shore Acre Drive

This new listing of Doug Fainelli, our former beloved school principle now working at Shore & Country, was my favorite of the week. It’s a small cape just right for a single person or a couple, on one of the nicest streets in Old Greenwich. Very private back yard with pool and, if you must, expansion room for more bedrooms upstairs. $1,795,000 which, for Old Greenwich, is probably about right.

Would You Buy a House From This Man?

So an associate of mine is selling her Stamford condo and the buyer brings in a house inspector. Former cop from Stratford, for what that’s worth. He’s inspecting away and comes across the alarm system. “What’s this?” says he, and he pushes the “help I’m being attacked and set on fire so send the SWAT Team, firemen and EMTs” button to see what happens. What happens is just what anyone else would have expected so, as the alarm shrieks and the response teams gear up, this former cop rips the wires from the alarm to stop the proceedings. That works no better than his first attempt, naturally, so everyone shows up at the party. Don’t know whether the buyer paid him for his time.

Different

We realtors all get a little bored (well I do, anyway) touring what is essentially the same house: massive new construction, identical floor layouts, etcetera so I took real pleasure from seeing Suzanne Wind’s listing at 250 North Street. This is a five-year-old house that has been on and off the market for almost all of that period but I somehow managed to miss getting inside it until now. It’s a neat house, carved into a steep hillside (with a perfectly adequate, flat back yard atop the hill) and completely different from ordinary new construction. Twenty-five-foot high floor-to-ceiling windows, sixteen different kinds of wood used for flooring and trim, a huge kitchen, fireplaces everywhere and a master bedroom shower that will accommodate forty of your closest friends. It is quite obviously a house designed to suit the tastes of its owners (one agent, who liked it very much, said it was “a guy’s house” and I suppose she may be right) and that may account for why it hasn’t sold before this. Another reason, of course may be that the original asking price was as steep as the cliff the house sits on but that has now been corrected and, at its new price of $4,750,000, I think it ought to go. The quality of the finishes in this house is astonishing and I doubt you could duplicate it today for anything close to this price. Close to town, totally different, go for it.

The Market Gets Ready for Bed

Buyers are still around (twenty-one listings went to contract last week) but the annual Thanksgiving-to-late-January lull approaches. There were fifty-eight price reductions last week, compared to fifty-five new listings and I suspect that that ratio will grow as the holidays get closer. It’s a good time to shop for bargains because, while many owners remain adamant that their pricing is correct, others don’t look forward to heating and maintaining a vacant house over the winter. So, in honor of the holidays, go shopping.

Alex Kaali-Nagy

Summers during college I worked for a Russian contractor who built miserable houses in Greenwich. My suggestion that he might improve his product if he used the services of an architect met total scorn. “Waste of money – I have plan book, cost me hundred bucks”. That builder’s long gone (although his houses, sadly, are not) but his spiritual heirs live on, building ever larger, ever uglier houses. So when I saw that one of my favorite architects, Mr. Kaali-Nagy, had completed his latest effort at 13 North Street, a brick Georgian, I was happy to tour it. This man does beautiful things. He consistently nails the proportions exactly right and every one of his houses is just exactly the right size. This one is no exception. $5,395,000, Ed Mortimer listing.

Thomas Sowell

“People who decry the fact that businesses are in business ‘just to make money’ seldom understand the implications of what they are saying. You make money by doing what other people want, not what you want.” Mr. Sowell was not referring to house sellers but his insight into how the marketplace works is nonetheless applicable to this business, no?

Boys & Girls Club

The Greenwich Board of Realtors sponsored a tour of the newly renovated clubhouse recently and I was thoroughly impressed both by the facilities themselves and by the club’s Executive Director, Bob DeAngelo. The club charges kids just $20 for an annual membership and provides in return a huge, brand new swimming pool, two gyms, a hokey rink, after-school homework assistance, tutoring, countless sports teams, and on and on. For that same $20 membership families can show up for weekly family swims and free-skating sessions. (Adults, by the way, can get an annual swimming membership for $250). This club does so much good in town that we might all want to support it. How? By volunteering, like Daniel Claroni – the club needs coaches, tutors, mentors, you name it; by financial contributions, like David Ogilvy (who spearheaded the $15,000,000 fund raising drive that paid for all these improvements); by renting the facilities for private parties- Bar Mitzvahs, say, or pretty cool corporate parties – here’s your chance to body check your boss off his skates and into the boards- or even donating used sports equipment (not junk, please, kids will be using it) like baseball gloves and skates. Presumably you know where the club is located (104 Field Point Road) but, if it’s easier, drop off equipment at Raveis’s 30 Milbank Avenue branch and we’ll deliver it the rest of the way. Here’s another thought: the club runs a summer camp, Camp Simmons, off of Riversville Road, and charges $50 for a week’s attendance. You could help a kid enjoy a unique experience for a pittance of what you’ll be spending to send your scion and heir-apparent to professional soccer camp.

Statistics

A total of 260 single family houses sold in town this 3rd quarter, compared with 299 in the same quarter last year. Once again, nothing was sold (or available) for less than $400,000 – surprise! On the other hand, we saw a significant increase (28 vs 20) in houses sold for more than $5,000,000. In the $2-3 million range, 41 houses sold this quarter against 53 last year (there are 8 more that went to contract but have not yet closed this quarter). You might think that inflation just bumped more houses into the next category, but no: 26 in the $3-4 million range this year compared to 24 last. Go figure.
So is a 14% drop in houses sold significant? Probably – not quite the headline grabbing news mainstream media would have us believe, but certainly evidence of a cooling market. So price your house right and don’t count on a rising market to help you achieve your dream price.

Smart House

My former law colleague turned builder Peter Thalheim is putting the finishing touches on a new house at 151 Riverside Avenue and I’ve been enjoying watching his progress (even if he did list it with our mutual friend, Bill Fossum). The house itself is gorgeous, with Brazilian cherry floors, coffered ceilings, six bedrooms and all the trimmings but something else sets this house off: Peter designed and built it to be super energy efficient. It’s been qualified in the CL&P “Energy Star Program” which, in return for a builder installing and employing all sorts of energy saving devices and construction techniques, provides some fairly modest cash credits and certification to the building’s buyer that he’ll continue to save money over the years. Peter used the Icynene foam insulation system (link on my weblog) which is a vast improvement over fiberglass batts because it fills every nook and cranny and, unlike fiberglass, can’t be cut, pulled out and shoved aside by the trades when they install plumbing and wiring. So no drafts or air leaks, plus sound-deadening qualities and no mold. Energy saving is estimated by Icynene at 50% and nothing I could find on the web contradicted that; in fact, all the articles I could find praised the product and its performance. Peter has installed two, two-speed Carrier furnaces (they don’t have to run at full speed when its not necessary) which carry an efficiency rating of 90+ % (old furnaces were 65%), a tankless hot water heater, low “E” argon filled windows, etc. etc. All of these features cost extra money and when I first toured the house last spring I applauded the effort on environmental grounds but wondered customers would consider them a selling point. Now that we’re facing a 50% increase in heating and cooling costs, Peter is looking pretty smart.

Pricing

Many sellers seem to establish the selling price for their home by looking at their basis, deciding how much they want to net and, after building in all the transaction costs like taxes and commissions declare “voila!” and a price is born. That’s fine but, sadly, their desires don’t dictate price: the market does. All the color brochures in the world and all the full page advertisements in the paper will not sell your house for more than the marketplace decides it’s worth. This simple truth, so easily understood in general, seems forgotten in the emotions churned up by selling something so personal as a home. But it’s true, all the same so, if you want to sell your house, work with a realtor who is thoroughly familiar with market conditions and follow her advice. Of course if you really don’t want to sell but just want to open your home to a (steadily diminishing) stream of lookers, then you just set that price anywhere you want.

Get it Right
I was behind an SUV in Riverside the other day and noticed that its license plate frame proclaimed the driver to be a “University of Connecticut Alumni”. As a graduate of that fine university’s law school and the nephew of the last man to deliver Yale’s Valedictorian speech in Latin (Dr. Gerard Fountain, Yale 1936? ), I was a little embarrassed for my school. Unless both the driver and his spouse were UConn graduates, the plate should read “Alumnus”. Which is all the Latin I know.