Monthly Archives: August 2006

High End Downtown Condos
One can’t drive down Milbank Avenue these days and not notice the huge number of new condominiums going up, all at huge prices. I wonder whether the market is deep enough to support all these projects. Not counting those still under construction and not yet offered for sale, there are twenty-five condos currently offered at $2,495,000 and up. In the history of Greenwich, twenty-eight such units have sold. Total. Now admittedly, this is a relatively new price category so we’re certainly not looking at a lifetime’s supply and as a matter of fact, one of those twenty-eight sales occurred just last week, in a bidding war at that But when I add up all the yet-to-be-completed units, those currently for sale and the thirty-four former Fareri projects on Idar Court and East Elm, I conclude that Mr. Fareri knew exactly what he was doing when he sold out to an investment group. Some famous Wall Street contrarian explained how he got rich by saying, “I bought when others wanted to sell and I bought when others wanted to sell.” Exactly.
38 Parsonage
When this house was built in April, 2002 it was originally priced at $9,950,000. That was a reach, apparently, because it didn’t sell until January, 2004, for $6,650,000. Two years later, the new owners but it back on for that same $9,950,000 and this time they got it, in just thirteen days. Lessons here are two: (a) don’t overprice your house if you want to sell it and (b) we’ve had some significant appreciation in the past two years. It’s not quite apples to apples; the house was improved during that period, but still.

Price it, Sell it
I angered a builder a year or so ago by suggesting that there were other new houses comparable to his that I liked more, at half the price. I’m no genius and the builder has been hugely successful in town so who am I to opine on value? Nonetheless, I thought to check on his progress the other day and discovered that his creation has been marked down almost 50% and remains unsold. Oops.

9 Indian Head
This property, listed by Ginny Hamilton for $2,200,000, currently holds a legally non-conforming two-family house. You could build a new two-family, each unit around 4,500 sq. ft., or build a very large single family on its 0.79 acres. Personally, I’m dubious about the prospects for a two-family in this neighborhood but if you’ve been looking for a large lot in Riverside to accommodate your mansion dreams, this is one of the few remaining.

Best Value in Old Greenwich?
Probably Barbie Jackson’s (Cleveland, Duble & Arnold) listing at 23 Tomac Avenue. It’s a very nice house with not too much of a yard but this is, after all, Old Greenwich. Started in 1988, finished in 1994 (the original builder got a bit over-extended during our last slowdown and took a flyer, so to speak, to Europe) and it needs some freshening up by way of paint, wallpaper and, if you cared to go to the expense, some updated kitchen countertops. I’d skip that last step as unnecessary but your call. The point is that, at $2,325,000, I think it compares favorably with other Old Greenwich houses asking $300,000 – $400,000 more, meaning you could spend away here to your heart’s content and still come out ahead.

And in Riverside
Don’t miss John Cooke’s (Prudential) listing at 23 Willowmere Avenue. This was originally priced (not by John) at $3,595,000 and, not surprisingly, it’s now owned by a relocation company and has been lowered to $2,750,000. I think that’s about right. Its builder went cheap on cosmetics like trim (plain) and interior doors (flimsy plastic) but, while it’s astonishing to think that you could pay this much for the output of a vacuum plastic machine, this location makes an interior upgrade well worth it. Deeded water rights and views, five bedrooms, nice yard, good deal.

Did you see that poll showing that 1/3 of all American adults think that our government brought down the World Trade Center towers? I realize that the same proportion also believes that Elvis is alive and living on Mars but, when coupled with another poll showing that 70% of Americans can identify at least two of Snow White’s seven dwarfs but only 21% two of the nine Supreme Court Justices, 73% all Three Stooges vs. 42% the three branches of government, it makes me wonder about the usefulness of the “get out the vote” campaigns run biannually. Do we really want Larry, Curly and Moe running our government? Then again, would we notice?

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Realistic Pricing
Last week a house finally went to contract at somewhere close, I presume, given its last asking price, to $2,000,000. Nothing unusual about that, but it originally came on the market a year ago for $2,850,000. That’s a long time to try to sell your house. Try any price you want – it’s your property, after all – but remember that you have just one chance to be “new”. If you don’t get offers right away, start whacking that price or your house will look stale and unwanted, all to your disadvantage. Case in point is a really nice house I’m aware of that came on for close to $7,000,000 over two years ago. It is now priced at $5,300,000 and remains unsold. The scary thing about this is that the owners paid more than $5,000,000 for it in 2001. Ouch.
Twenty houses asking $7,000,000 and up sold this year vs. twenty-four during the same period (January-July 31) last year. But things have slowed down in the nosebleed range: only three sold in June and July this year compared to eight in the same period last year. Forty-two in this price range sold in all of 2005 while there are sixty-seven available today. If the three vs. eight is a harbinger, I detect a glut.

An Interesting Market Technique
A newly constructed house that hasn’t sold was just bumped up in price by a couple of hundred thousand dollars. This tactic always intrigues me – if it isn’t selling at the lower price, how will a higher price do the trick? People do try this from time to time and I suppose it must have worked, once, somewhere. I’ve never known it to, though. Recently a rental that was going nowhere jumped its price from $11,000 to $13,000 a month. The listing expired last month.

And Here’s another Interesting Pricing Decision
Buy a house at the end of January for one price, change your mind and put it back on the market in May. How much has your lordly presence added to its value? One seller set his worth at a cool million. The marketplace seems to disagree, because it remains unsold.

Tuesdays, Thursdays

Broker open houses are divided between Tuesdays and Thursdays. North Street and west on Tuesdays, east of North Street, Thursdays. It always surprises me when I see, say, a house on the far western edge of town being shown on a Thursday “due to client’s request”. Request all you like but you’d be better off saving your breath. No agent I know of is going to schlep to your side of town when he’s down in Old Greenwich. If a particular date is inconvenient or impossible, postpone the open house.
Speaking of the Western Side of Town
I recently saw two very nice new houses there at 5 Comly Terrace (Barbara Zaccagnini’s listing) and 15 Canterbury Drive (Lucille Skorvanek) and priced at $1,549,000 and $1,435,000, respectively. If you’re priced out of eastern Greenwich, where new construction now begins at $1,750,00 or you just prefer Glenville (yes, it happens), these would be very much worth considering.
And Still Further West
I was showing an Old Greenwich house to a prospective buyer (okay, he’s a “prospect”, but that sounds so mercenary) from New York and he asked about closing costs. I started rattling off items like pre-paid interest, attorney’s fees and so forth until he interrupted me and said “no, I mean what’s the mortgage tax?”. I had forgotten, until then, that New York imposes all sorts of taxes on buyers: buyer’s tax, “mansion” tax, county tax, etc. The difference between the two states, on a $2,000,000 house, is over $45,000. Yes, the same $2,000,000 will buy more house in Westchester but, when you also compute an annual tax bill that’s twice as high, Greenwich still looks good.
Terror in the Sky
The recent incident in London has sent all good Pcers scrambling to find some inoffensive term to describe the perpetrators. CAIR goes crazy when someone refers to an Islamic Terrorist or even terrorist (one man’s terrorist is another man’s freedom fighter and all that) yet “suspects” (The New York Times’ preference) or “detainees” (Mother Jones) are a bit, er, vague. So it was with great relief that I stumbled across some moonbat’s website and discovered the phrase “Faith-based, would-be martyrs”. I assume that, had they succeeded in their quest to blow a few thousand passengers to bits, we could drop the “would-be” modifier. How sweet. I have incorporated this into my new vocabulary and will offend no more.

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Historic Preservation
Riverside architect Jay Haverson has a problem: he purchased a two acre lot on Round Hill Road in the four acre zone and, thanks to the inexplicable rule that penalizes undersized lots, he is only allowed to build a 5,445 sq. ft. lot instead of the 7,840 sq. ft. otherwise permitted on two-acre parcels (and 5,880 on a one acre lot – go figure). He’s okay with that, but the lot has a very old (1827) cottage on it that he’d like to preserve. He’s stripped off all later additions and preserved the original, 1,650 sq.ft. structure and would like to keep it as a guest house. Under our FAR rules, however, the area of the cottage is deducted from the permitted size of the new house so either the cottage goes, at great loss to the streetscape, or something else has to give. Haverson has proposed that it’s the FAR that should give. In two and four acre zones, he suggests that the already-existing Historic Overlay process be applied, on a case-by-case basis, to review applications for an exception to the FAR rules. I’m simplifying things here but basically, the rule change would create a process whereby the owner of an existing, antique house could apply for relief from the FAR so that a modern house could be built and the original preserved. There would be nothing automatic-the Historical Commission could deny an application, demand that the new house reflect the style of the old, whatever it deemed necessary and appropriate.

I know of three similar situations right off the top of my head and I’m sure there are many more. The houses in question are obsolete as that term is used in real estate and we’ll eventually lose every one of them if some incentive isn’t found to encourage their owners to keep them. It’s not just builders who tear these houses down; new owners do it too because, except for nuts like myself, people don’t want to / can’t live in them. Excluding their area from FAR calculations seems like a sensible way to accomplish this, all without dipping into taxpayers’ pockets for special tax credits, etc. I know Jay Haverson and like his work and I’m absolutely certain that the house he’s building will be a beautiful addition to Round Hill. But how much nicer if, in addition to the new house, the old one could also be preserved. The next hearing on his proposal is scheduled for September. He already has the support of many preservationists in town but if you’re interested in that goal, you might want to attend and learn more.

Further Broker Etiquette Lessons
Turn out the lights, lock the door. It drives me crazy when a client reports that some unthoughtful agent has shown a house and blithely moved on without re-securing the house and shutting off the lights. It’s both unprofessional and rude to be so careless and it gives all of us a black eye.

Whatever happened to Travel by Shank’s Mare?
I happened to be at the Riverside Yacht Club the other morning when a huge crush of cars arrived, almost all SUVs and each bearing children (one car per family, damnit, no carpooling here!). As I left and headed up Club Road I didn’t spy a single kid walking or riding a bicycle to summer camp. I’m not picking on this particular club by the way – I’ve seen the same phenomenon at our local schools around town – but I do wonder what happened to kids getting around on their own. Is it fear of kidnappers? Too many hours in front of Gameboys rendering leg muscles useless? Inquiring minds want to know.

Beach Read
I just finished “The Ethical Assassin” by David Liss. What a hoot. Liss wrote “A Conspiracy of Paper” a few years ago and won an Edgar Award for his efforts. This one is far loonier and tracks its characters as they romp through Florida in all sorts of improbable ways. I loved it but its black humor may not be for you. Try this passage concerning the reflections of a hit man: “Knowing that the body was but a shell and the soul lived on had helped him in his enforcement work in Vegas. It’s not so hard to beat someone to death if you know you’re not doing any permanent damage.” Those two sentences made me put the book down and say, “damn, I wish I’d written that”. Your reaction may differ, naturally. If so, you won’t like my upcoming novel either so you can save your money twice. Is this column useful, or what?

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More Statistics
The New York Times ran yet another article declaring a recession in the housing market the other day so I thought I’d see how we’ve been doing in ours. As always, it depends. Overall, we’re off 32% in contract activity for the period I surveyed, June 1 – July 25, 2005 and 2006, 106 units (single family and condos) vs. 154 (all of this year’s numbers are probably skewed a bit towards the downside because there are bound to be properties currently under contract that have not been reported due to outstanding contingencies).Single family homes did better, down 21%. It’s the condos being whacked, selling at just 43% of last year’s pace, 19 vs. 44

It also depends on what neighborhood you look at. For single family homes, Riverside is untouched, 20 now, 20 last year. Old Greenwich is up, 21 vs. 16, Greenwich proper, down, 38 vs. 57 and Cos Cob, down, 8 vs. 17. It’s these latter figures that explain why some of my builder clients only do business in Old Greenwich and Riverside.

Inventory is up substantially. 181 condos now vs. only 89 the same time last year. 526 single family homes available now vs. 444 last year. In case you’re wondering, 261 condos sold in all of 2005 and 738 single families.

Builder’s Profit?
I’ve noticed that a number of tear-downs are coming on the market at a price that allows no profit for a builder. For instance, one I know of is priced at $1,200,000. At that price, when you add another $1,000,000 for building, plus commissions, taxes etc., the resulting house would have to sell for at least $2,500,000 just to break even. All this in a neighborhood of, at best, $2,000,000 homes. I don’t necessarily mind this trend because I’m tired of watching the houses of my childhood friends disappear but if you hope to cash in on the lack of land in town by selling to a builder, remember that he or she is not a non-profit organization. Not deliberately, anyway.

No Clutter
I recently toured two houses at opposite extremes of home decorating. One was a mansion that had exactly one personal photograph, a formal, posed family portrait and nothing else. It struck me as awfully cold and I wondered if the lack of family snapshots indicated a family in trouble or an over-bearing interior decorator. We advise “de-personalizing” a house to make it easier for a potential buyer to imagine themselves as the next owner but banishing all memories of your kids and pets seems excessive. Don’t be bullied. At the other extreme was a very nice house that had dozens of photographs on every level surface. That, plus the presence of too much furniture, made the rooms appear small and cramped when in fact they were not. So listen to your agent, clean out the place, even if temporarily, and go sell your house. But don’t forget you have a family, too.

Minimum Wage
Did you see that Chicago has passed (an undoubtedly unconstitutional)law mandating WalMart to pay its workers a minimum wage of $10 per hour plus $3 per hour in benefits? This kind of whacko economics is always popular with uneducated people which explains why the Democrats are pushing it so hard, but I don’t get it – if raising the minimum wage is the solution to poverty, why stop at ten bucks? Wouldn’t $100 per hour help even more? And if it were raised to $1,000 per hour these folks could buy (modest) homes in Greenwich, all to my own enrichment. Go for it!

9 MacKenzie
Nick Barile, of York Builders, builds a great house. I’ve admired some of his previous projects on Tomac, Hendrie Avenue and Pell Place, and now he’s just finishing up his latest on MacKenzie, off of North Street. A great entrance, graced with a 150-year old newel post (Barile always adds antique touches to his houses, to good effect) and a really nice, curving staircase. Another agent/friend though the rooms to either side of the entrance were too small – not to my eye; I find them perfectly proportioned and large enough to entertain an entire mob of Conyer’s Farm polo swells or whoever else comprises your social circle. Slate roof, built-in desks/bookshelves in the childrens’ rooms, over an acre of land in an R-12 zone (a smart move – this neighborhood has gone upscale and 12,000 ft. lots won’t cut it), great finish work and on and on. $5,595,000 – unlike some other new construction I’ve seen recently, this one’s quality at least gives you the impression that you’re getting what you pay for. Diane and Russ Dutcher, of Coldwell Banker, have the listing.

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