Daily Archives: August 18, 2008

Sounds like Greenwich: coddled princes. Except many families in town have the resources to pull it off.

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Why I don’t like the Olympics, especially when hosted by China.
There’s bad sportsmanship in baseball;
cheating about girl gymnasts’ ages;
cracking down on dissidents;
and
massive cheating in general, in all sports.

I’m pleased that Mr. Phelps won his eight gold medals and I’m sure NBC is delighted by the record size of viewership for these games, but I won’t miss them when they end, notwithstanding the warm feelings and peace on earth that they are supposed to be engendering.

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What’s an ugly Greenwich woman to do?
Assuming there is one, she can move to Australia. No such invitation for me. alas.

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Save your money?
44 Greenwich Hills Drive, a 3 bedroom condominium, was originally listed for $849,000 in October 2006. It didn’t sell so it was pulled from the market in March of 2007 and renovated: new kitchen, new baths, hardwood floors, etc., and returned to the market in July, 2007 at a new asking price of $1,100,000. It sold last week for $835,000.

So did the sellers (heirs, in this case) waste their money performing all those renovations? On the one hand, it didn’t sell in its original condition at $849,000, so perhaps renovations were called for. On the other hand, judging from the new price of $1.1 million, a lot of cash must have been poured into this place. My hunch is, and I have no personal knowledge to support it, is that the heirs would have been better off slashing the original price rather than throwing good money after bad.

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For What it’s Worth – ahead of the Wall Street Journal!

The link is to today’s WSJ’s editorial denouncing the Green’s efforts to block any sort of transmission of energy whether produced by windpower, solar or cow farts. We said it earlier here, repeatedly, but perhaps the WSJ says it best: “The only energy sources they seem to like are the ones we don’t have.”

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Nalgene update
I mentioned a week or so ago that my favorite plastic water bottle, manufactured by Nalgene, had been pulled from the market due to hysteria – “if it saves the life of just one baby” sort of stuff. Friday, the FDA concluded that the stuff is safe. Not soon enough to save my water bottles and, naturally, not sufficient to quell the hysteria. This country’s in trouble.

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Why didn’t I think of this instead of real estate?

Some corporation (link above) is selling off the Macaroni Grill, a chain I’ve never heard of, for $132 million. Pretty impressive, considering that there’s no macaroni on its menu!

Update
Here’s a fascinating tidbit from a Phoenix, Arizona diner: “The calamari at Macaroni Grill was tender and fresh….” In Phoenix? Really? Why do I suspect that this poor benighted soul has eaten nothing but frozen seafood her whole life? Of course, my ancestor, Albert Fountain, who spent most of his adult life in New Mexico and Arizon fighting Indians (and who was murdered in the White Sands of New Mexico) would probably have been grateful for any seafood, fresh or frozen. But I’m holding out for macaroni.

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Slowly, oh so slowly
44 Calhoun Drive sold Friday for $4,041,050. It was originally listed on the Ides of March back in 2006 for $6,200,000, so I suppose its sale was a relief to the sellers, even at 1/3 off.

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For Sale by Owner

The city of Bozeman, Montana has put its city hall up for sale and isn’t using a Realtor. This has the local real estate organization up in arms but what the heck, they can always try again with professional help if they need to. Bids are due this Friday. So far, no bids have been received so if you’ve always had a hankering for a municipal building in the shadow of the Rockies, now’s your chance.

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Nantucket blues?
A reader who’s hiding up in Nantucket sent this link – to my eye, things don’t look any worse (or better) up there than they do down here. Which makes sense, sort of, because the island is more or less just an adjunct to our town (which is why I rarely visit, but nevermind).

“Chris

Long time reader and vacationing up in Nantucket… Seems the real estate envirnoment is not so good here either… Thought you might find this link interesting…

Update:

Link was bad before – sorry

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See what happens when you don’t have Bush to kick around?

For some reason that eludes me the blogger at Greenwichroundup.com chooses to link to a story today about poverty in Fredericton, Canada. I’d never heard of the place but it turns out to be in the middle of nowhere in New Brunswick (redundant, I know) and is even the capital of that sorry province. All very educational, but the question that struck me as I read an interview with the director of some soup kitchen was who he would blame for the sorry plight of his clients. I figured it couldn’t be Bush or those wicked Republicans so I guessed global warming. I was wrong – he said it was all due to globalization but that, as my college-educated daughter would have been happy to tell him, is all Bush’s fault; so I was close.

Here’s a map of Fredericton – don’t you think the best way to end poverty there is to encourage the inhabitants to get the hell out of Dodge and move someplace where there are more jobs than peeling birch trees and turning moose antlers into coat racks?:

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Does this mean that A Rod’s not buying Antares’ white elephant?

Last year, in a rather transparent attempt to demonstrate buyer interest, any buyer interest, in its collossal (35,000 sq.ft) blunder on Langhorne Lane, Antares hired a publicist who “toured” the place with NY Yankee A Rod and made certain that the press learned of the visit. Most of us considered it to be nothing but hogwash at the time and the house did not sell. Still hasn’t. Now, according to the NY Post, the man’s buying an apartment in NYC. Well, at least he was interested in real estate, even if it wasn’t in Greenwich.

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Apples to Apples

97 East Elm Street, a nice old 1920’s single family house that was renovated in 2004, sold for $1,612,000 back in December, 2004. It sold again Friday for $1,795,000, which was full asking price and after only 10 days on the market. The appreciation was no home run – by my bad math, roughly 2.5% per annum, straight, not compounded, but rent during that period would probably have been somewhere around $3,500 per month so that’s $133,000 saved, plus tax benefits. Regardless, good investment or not, because the house was basically untouched during this latest period of ownership, it offers a good idea of what’s happening in our downtown market. And I’m always delighted to see evidence of active buyers [just as exterminators drool over evidence of active termites? – Ed].

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Why wait for the coronation when the Messiah has arrived?

Speaking at a fund raiser held among San Francisco pan-handlers desperate for change, Obama raised $7.2 million in just three hours while basking in Speaker of the House Nancy Pelosi’s adoration, who called him “a leader that God has blessed us with at this time.”

Weren’t they supposed to pass out palm fronds? Where’s mine?

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More NY Times economic and mathematical illiteracy

I’m beginning to think that Times reporters simply don’t know anything at all about what they write about, which is an improvement, I suppose, over my earlier thoughts that they were part of a vast conspiracy designed to feed off the stupidity of their readers. Here’s the latest example, this time confusing just about everything, from the square footage of houses to the delinquency rate of second mortgages. Sure, it could be that the Times deliberately chooses not to give hard numbers of an actual increase in loans gone bad because readers would then realize what a non-story it was and perhaps hate Bush a little less, for just a few seconds, but I prefer to believe that these guys are just dumb as a sack of rocks and simply don’t realize what they’re saying.

The comments below the linked article are well worth reading, especially this one that quotes Michael Crichton:

“Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward, reversing cause and effect. I call these the “wet streets cause rain” stories. Paper’s full of them.

In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.”

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New vs. renovate

A reader asks, “Sorry to be off topic, about the new construction per feet cost. What is a new addition to a house cost nowadays per feet. Also, was told the cost to build a second floor (above the existing house) was much cheaper than adding to first level. Any opinions?”

Well as you know if you stick around this blog, I’ve got lots of opinions and some of them are actually based on fact (but you’ll have to figure out which those are). Anyway, addressing the last question first, I’ve been disappointed in the past to learn how little money can be saved by adding a second floor to a ranch. Building up, in other words, instead of starting anew.

You start off with a savings, of course, in that you already have a foundation and its infrastructure – water, sewer, etc. But then you have to look at what you’re improving. It probably has 8′ ceilings which are fine for you but a turn-off these days to buyers. You can add to the height of the first floor, but that’s expensive. If you don’t, while you won’t exactly be putting lipstick on a pig, you will be building a house that lacks appeal to many buyers (unless heating costs stay high, in which case, low ceilings may come back in vogue).

How’s your electrical service? It’s probably outdated. Will your existing furnace be large enough to service twice the existing space? Are your windows original and hence obsolete? How much will it cost to extend your chimneys? If you’re going to have new baths upstairs, do you want to leave the original baths untouched? Is your plumbing adequate? How much will a new kitchen cost?

Etc. So, in my experience, you’re not going to achieve much of a cost saving. If other readers have had a better experience, please write in and educate us.

Plain old additions and re-dos are, or can be cheaper than adding on, but it’s always cheaper to, say, frame out a nice, square window opening than it is to deal with a slanting old one (blending the outside trim can be a bear, for instance). Having worked on both – old and new, I have spent as long as a full day doing a window in an 1840 Maine farmhouse and perhaps 45 minutes framing and popping in a new window in an addition we put on. And of course, you never know what’s behind a wall until you open it up – surprise!

Just remember that the most expensive words in a remodeling job are, “as long as we’re doing that ….”

There’s nothing wrong with taking an old clunker and bringing it up to date and, if you get the house for the right price you’ll make money. Just not as much as you think, though.

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If you want to know why we’re in the current mortgage mess, read this puff piece from 1998. Money quote: “Fannie Mae and Freddie Mac operate independently each with a preferred lender base, but both are in the business to make sure that as many consumers become homeowners as possible.”

That they did, with the result that together, the two entities now hold 46% of the national debt or they did in 2003, when the linked article was written. No one listened back then and I wonder if anyone is really listening now.

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Appraisal woes
Interesting article here on the difficulties in appraising houses in a falling market.

Lenders are more cautious and, because house prices are falling so rapidly in some areas, won’t accept a “comparable” sale that’s six months old.

“In San Francisco, neighborhoods are small, which compresses the number of comparable homes, making appraisals particularly complicated. ‘Any time you have a reduction in volume, especially because that is when the underwriting criteria of lenders tends to become more stringent, it’s difficult,’ said Charles Warren, who runs a San Francisco appraisal business called Warren and Warren. ‘Lenders want to see comparables from the last 30 days, and all of a sudden you are left without any valid data. That exacerbates the problem.’ ”

And this bit of sound advice: “Buyers should make sure to leave their financing contingencies in place until the lender has signed off on the appraisal. The down market means that lenders are reducing appraisal values more often.”

On a brighter note, I heard an interview with a tri-state lender this morning (Hudson something or other – they’re opening an office in Greenwich but have been lending in Fairfield County for some time)and he was surprisingly optimistic about the housing market in this area. His bank has always held on to its loans, rather than repackage them and sell them on the national market, and, while the bank has insisted on a minimum 20% down, on average, its borrowers put 39% down. “Our customers are people buying homes,” he said, “not speculators.” So far this year, its Fairfield County loans are up 1,700 over 2007, which was their best year. So, there are buyers still out there.

The bank president also pointed out that the housing collapse has hit hardest in just seven states: Michigan, Illinois and Ohio, which he attributes to the collapse of auto sales and its effect on the income streams of people who work for auto parts suppliers; and Florida, Nevada, California and Arizona, which all suffer from a glut of speculative building. He still likes the Northeast as a place to make housing loans. I hope his enthusiasm is justified by later events.

Update

The bank is Hudson City Savings Bank.According to its website, it’s doing very well. They specialize in jumbo prime mortgages, so no wonder they like Greenwich.

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