Birds of Prey
When John Augustin, proprietor of Augustin Farm up on King Street, lost his leg in a tractor accident this spring he received a lot of support from friends and customers. What he probably didn’t need was a barrage of calls from Greenwich real estate agents, all seeking to buy his land for their developer clients. “They’re like a bunch of buzzards flying around a dead carcass” he told Greenwich Time, and I share his disgust. It’s this kind of behavior that’s earned Realtors a reputation right down in the sewer with politicians and lawyers (well okay, I considered laminating my lawyer business cards so I could scatter them around accident scenes, but I didn’t do it). Mr. Augustin doesn’t want to sell; he would like some assistance in paying his huge medical bills. A committee is being established to accomplish just that and, when it’s up and running, I intend to contribute. Perhaps some of those ghoulish callers might do the same.
I see that, after two years on the market a certain house finally sold this week for $2,500,000 less than its original asking price. I’m sure the unhappy seller is convinced that this is proof that the housing bubble has burst but I remember touring it back in July 2004 and, while I like the house, I thought that it was at least $1,500,000 and perhaps as much as $2,000,000 too high. In a super-hot market, comparable prices might have risen during those two years to catch up with the owner’s desired price but that market doesn’t exist today (and it would never have caught up with the 50% premium this one asked) so the seller had to come down to catch it. I don’t see the final sales price as evidence of anything except what has always been true: if you over-price your house it won’t sell and, eventually, you’ll pay a penalty for being exposed to the market for so long.
On a related matter, the listing for a renovated house in Cos Cob has expired and the house remains unsold. I heard through the grapevine that its builder could have had a deal but refused to correct some open construction items which violated our building code. This is not the market to play hardball, especially if you’re quibbling over details that, under law, you’ll have to fix anyway.
“Nervous about the Market”
Many agents tell me that their buyers use this phrase to explain why they are unwilling to bid on houses. If you’re among that crowd I think you’re missing an opportunity. The market is not dead, nor are prices falling. Your braver competitors (and when you’re looking for a house, you have competitors) are picking up some very nice houses at reasonable prices while you sit on the sidelines. Are there over-priced houses out there? Sure, but you and your agent can sort those from the good buys and proceed. I realize that Wall Street is determined to see everyone pull their money from real estate and invest it with them but I hunted stock brokers for a long time and watched their shenanigans and pure stupidity (best example, the fellow who pitched Winstar Communications as “that GM company that puts call buttons in cars”. SmartMoney.com called WinStar “a prime example of the tightrope financing, shameless stock promotion and blind faith in the future that ran rampant across Wall Street over the past few years.”). In short, these are the same folks who brought us Enron, Pets.com and chains that (briefly) sold fifty varieties of popcorn. I don’t trust their financial advice and I certainly don’t trust their supposed knowledge of the current Greenwich real estate market. If you do, you may end up like the plumber I met who was still renting an apartment because, when he had a chance to buy a house for $15,000, was told by his father to “wait for prices to fall”. He is still waiting.
To update some statistics from two weeks ago, 177 houses have gone to contract since April 1, in all price ranges. We’re on track to equal last year’s volume and last year was the second best year (surpassed only by 2004) in Greenwich real estate history. And, finally, I’ll repeat that houses are not “investments” – they’re a place to raise your family. It’s just a nice bonus that, over the years, Greenwich homes have returned a sizeable premium for money spent.
Do As I Say …
Saw a cop using a hand-held cellphone the other day as he cruised the Post Road. Do you suppose that he turned himself in when he reached Headquarters? Neither do I.