My friend John Cooke at Prudential has sent me some statistics showing that unit sales for single family homes are down 39% compared to last year. That’s a big drop, but from conversations with other brokers and my own observation, it seems that sellers haven’t absorbed the information. Houses are, in general, ridiculously overpriced – apparently, buyers are taking 2004 prices and adding 10% appreciation for each year since then and expecting to sell them for a huge premium. Sorry to tell you this, but that’s not going to work. We’ve been in a flat market for some time now – don’t be thrown off by the average price increase, because that reflects new construction selling, not your tired old cape – and you should price accordingly. Unless you really don’t want to sell your house, in which case, why is it on the market?
The New York Times reports that Europe is suffering even worse that we are, with prices in Ireland and Spain, for instance, dropping way off from last year’s pricing. Well, what goes up, goes down. Greenwich has usually withstood these market fluctuations but we’ve certainly witnessed years where what up stays flat, and I think that’s where we are now. Again: don’t get out your whiteboard and chart a neat graph of appreciation to arrive at your asking price because you’re doomed to disappointment.
47 Shore Road, Old Greenwich
Beautifully built new house, constructed by John Routh, of Coldwell banker. Top quality construction in every inch, including a terrific utility sink – you laugh, but most builders I know stick a $3 plastic sink in the laundry figuring that even buyers of $9,000,000 houses won’t notice. Mr. Routh obviously does and here, as in every other detail, his care shines through.
Riverside Association, property values
I was once a member of the governing board of this association so I intend no ill will towards the group, but its recent survey of residents bodes nothing good. They’re asking questions about new construction, excessive house size, tree cutting, too lenient FAR regulations, etc., all of which makes me suspect that they’re back, as they were when I served with them, to attacking new construction. Look: if you want to return to the 1950s, when new houses in Greenwich were 1500 square feet (twice the size of the national average, by the way) go ahead, but be aware that you will be paying for it. There is no market, now, for a house less than 3,500 sq.ft and in fact, 5,000 sq.ft is about the real minimum for new construction. You can indeed create moderate income housing in Riverside by limiting house size, but know that, if you do, you won’t be able to sell your house for anything like the price your neighbors received for theirs. A 1,500 sq.ft. new house is worth, I’d guess, about $750,000, so if you’re selling to a builder, calculate $250,000 for the value of your land. A 3,500 sq.ft. house might net $1,800,000, so you can maybe sell your land for $750,000. It’s your money, and your house and if you feel the impulse to subsidize poor folks who can only afford a $2,000,000 house, God bless you. Just be aware of what you’re doing when you vote to shackle your land with these kinds of restrictions, and hope that your IRA will carry you through your retirement.
The driving force of Greenwich real estate has always been the quality of our schools. So it’s a shame that we are turning against them. Stanwich School’s expansion plans seem to be foundering on the shoals of NIMBYism, our new public school superintendent is doing her best to dismantle the talented and gifted program and, I hear, we have at least one avowed communist teaching our kids Advanced Placement history in our high school. Unsophisticates might think that the place to serve the oppressed poor would be inner city high schools, but to really stick it to the Man, you want a tenured position, paying $150,000 a year, in the belly of the beast, where there are no knifings, shootings, or 275 SAT scores to distract you. Right on, brother! We can’t fire these people, but perhaps the administration could be more selective in hiring them in the first place. Which will happen only if we get rid of our current superintendent, a denouement we should all feverently wish for.