Daily Archives: August 11, 2008

Who’s out there lending?

Not Fannie Mae. I’m still searching for the article on brave investors pitching to buy entire portfolios of foreclosed homes from banks but here’s a bit of gloomy news from last weekend, just in case you missed it. You can use the link for the full article but this sums things up rather nicely:

Fannie Mae executives, in a conference call with analysts on Friday, said they intended to reduce the growth of the company’s loan portfolio and stop buying riskier so-called Alt-A mortgages by the end of the year. Fannie Mae will also begin charging more to guarantee loan repayments, a step that is likely to push mortgage rate higher.

“Fannie and Freddie’s decision to curtail support of the mortgage market is going to make mortgages more expensive for potential home buyers, which is going to hurt the overall economy,” said Howard Shapiro, an analyst at Fox-Pitt, Kelton. “They’re the only real buyers in this market, and they’re going to buy less. That’s really bad news.”

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Distressed loans

There was an article in either Bloomberg or the NY Times yesterday about vulture capitalists buying huge chunks of foreclosed properties from banks. I haven’t found that article yet but while I was looking I came across this related story (see link above) about investors buying bad loans and mortgages. What I found interesting was that leon Black, principal of Apollo Group and owner of Realogy (which, in turn, owns Century 21, Sotheby’s and Coldwell Banker) is NOT interested in buying bad mortgages, even for pennies on the dollar. Does he know something he should be telling us? A little buyer’s remorse going on? We’ll see, perhaps.

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Cars in Greenwich

The web site I link to above may or may not be accurate – I don’t think its calculation of median price is on target, for instance. But if you jump around to all five of our zip codes (tat would be 06807, 06830, 06831, 06870 and 06878) you can compile the number of motor vehicles it thinks are in town. Or you can trust my math (always a dangerous thing to do) and learn that we have 43,917 motor vehicles kicking around. That number includes motor scooters, mopeds and the like, but it’s still a lot of steel on our streets, given that 25% of our population of 62,000 is under 16 (roughly). No word on how many landscapers, cement trucks and the like fly through our town every day but I do notice, I think, a lessening in their number. If you want a taste of those numbers, park near St. Catherine’s at the intersection of the Post Road and Riverside Avenue at 8 in the morning and count how many turn into Riverside. Multiply that by 5 and Bob’s your uncle!

Here’s another neat trick. Use the website above to navigate and see how many households in Greenwich proper have 5 or more cars: 199 households(owner-occupied and rental) 995 cars. Remind me to stay away from the Back Country on Sundays.

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population growth or lack thereof.

Click on title above to reach some interesting data on how Greenwich hasn’t grown since 1970, when our population was 59,000 to today, 62,000. Might make you wonder why we have so many moretown employees, but ….

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Come on, you pikers!

A Russian, taking time off from militarily invading his neighbors, has just bought a house on the Riviera for $500 million Euros which, assuming 1.49 dollars per Euro, works out to about $750 million of our pathetic greenbacks. And you’re worried about stetching for a measly $30 million mansion? Heck, Helmsley’s digs for $125 million look positively cheap.

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Decent house in Riverside, cheap!

Well, for Riverside. A couple of price reductions have been taken on this renovated carriage house and at $1,495,000 I think it offers good value. Of course, times being what they are, you might want to try negotiating a price even below “good value”.

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August doldrums

Town Hall Municipal parking lot, Thursday, 1:30 p.m. Town employees may be at work but the builders and homeowners they usually serve are obviously out of here.


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Public hubris

Our First Selectman has chastised the Public Housing Authority for keeping residents in the dark concerning its plans to add new housing units in town. The full article is linked above but I think this quote, as lifted from Greenwich Time, sums up the attitude the head of the housing Authority holds towards lowly citizens and neighbors:

Jonathan DuBois, the Housing Authority’s chairman, said the agency had wrongly been under the impression that it was responsible for developing such plans, and that elected politicians were in charge of coordinating the public vetting of them.

We worked with the town agencies for more than a year before the development plan was announced to the public. When it was announced to the public, I expected that the process of public disclosure and explanation would be directed by the Board of Selectmen and the first selectman, who would tell us what meetings to have. That was a mistake,” DuBois said.

I’m really not interested in Selectman Tesei’s interpretation of what the Housing Authority’s up to and apparently neither is he. His demand that they speak, openly and publicly, is a good move. Should be fun to see the fireworks at the first public hearing, a show that, I suspect, the Authority was hoping to avoid.

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Current Inventory

John Cooke of Prudential has emailed me the current inventory as of July 31st (click on image to enlarge).

What are we to make of this? Eh? Inventory’s up, but we all knew that. I can find some comfort in the fact that the market is not entirely dead. From June 1 to July 31 this year 115 units (30 condominiums, 85 single family houses) went to contract. Among single families,six were priced at $7,000,000 and above (no guarantee what they sold for)three in the $5’s, seven in the $4’s, nine in the 3’s, eighteen in the 2’s and twenty-two below $2MM.

Ignoring that June-July isn’t our busiest period (nor is August, come to that), we can extrapolate to some dismal figures if we’re so inclined. According to Cooke, we have 76 homes available priced above $8MM. Take the 3 contracts we actually had in the two month period, multiply by 6 (that would yield 18) and we have a 4.2 year supply of mega mansions. Boo hiss.

The $7-8MM range isn’t so bad – about a year’s inventory, assuming no one else decides to list their house in this range for the next 12 months.

We saw no contracts in the $6-7 range so John’s inventory of 33 either suggests an infinite supply, you should drop your house out of this price bracket or hope that things will get better come September – probably some combination of all three, I suspect.

$5-6MM, we have 33 houses to unload, and 1.8 years to do so.

$4-5MM, 43 units, 1 year’s inventory.

$3-4MM, 62 units, 1/2 year inventory – price your house here!

$2-3MM 105 units, 1 year’s inventory

$1-2 139 units -not so bad, but don’t count on moving next month.

I repeat, June and July are usually slow months so we can hope for a rejuvenated market come fall. If so, this inventory will shrink faster than I’ve just extrapolated. I’d feel better about predicting such happy news if the credit market were stronger, Russia weren’t invading Georgia (that’s Europe Georgia, lest you totally panic) and there weren’t an election coming. But all these interesting things are happening, so I’m guessing we’ll see a period of hesitation among buyers as they wait to see how things sort out. Bad news for sellers and real estate agents, but what are you gonna do?


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