As bad as 2004!
This chart shows that the Dow has fallen from almost 14,000 in July to 9,500 today. That’s scary, but we turn out to be back where we were four years ago. If you didn’t buy this year, how bad is that?
Daily Archives: October 7, 2008
As bad as 2004!
A reader asked about this so I stopped by to look. Certainly looks as though someone’s planning to tear the place down. I couldn’t find the tax card for 17 Brookside on line (curious) but it would seem to be a circa 1920’s mansion which, these days, isn’t in vogue. The demolition sign posted in front certainly doesn’t comply with our town ordinance, which states (Exhibit B to the permit) that the sign identify the age of the building, contact information, etc. This one just says “Demolition” and calls it a day. It’s not my job, but someone who objects to the destruction of this building can probably delay the inevitable by complaining to the Building Department and having them force the builder to start over again, with a proper sign that complies with the regulation. But there’s no stopping it permanently.
The voice of experience
The concern in parts of Southern California illustrates the risks that could lie ahead for other communities as the Treasury begins a massive churn of assets. Depressed real-estate values in areas across the country could slide further if homes are sold to large financial investors who then flip them to others who want to make a quick profit.
“The U.S. Government is now in the real estate business” one Californian representative said. I say, what happens, even in Greenwich, when fire-sale prices start knocking off our spec house inventory? If your own, slightly dated home is priced at $2.5 million and right down the street a spec house, brand new, suddenly appears at $1.95 million, which is going to sell first and what’s going to happen to your price? Just asking, is all.
Bloomberg reports that the Fed will buy all commercial paper to ease credit crunch. That’s at least $1.6 trillion, over and above the paltry $700 billion we’re spending to save the banks. Thank goodness for printing presses, eh? Let’s just hope we don’t suffer a shortage of wheelbarrows or we won’t be able to carry our paychecks home from the bank.
This is why we’re in the mess we’re in
Barney Frank says attacks on Community Reinvestment Act are racist
There’s no room for discussion: don’t like fiscal irresponsibility? Then “you’re a racist! Don’t blame me for trying to help the poor.” I suppose that this, coming from a man who let his Senate Page lover run a prostitution ring from the Franks manse in Washington for years and “never noticed” is hardly surprising. The man may really be as clueless as he claims to be. He’s certainly as venal.
Update: From someone who gets it:
Rep. Artur Davis of Alabama, a member of the Congressional Black Caucus:
“Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong.”
Barney, have you met Artur?
Harbor Point Troubles Continue
I’d thought that, with Antares booted off the site, Stamford’s huge Harbor Point project would get back on track. But a reader just emailed me this article from the Stamford Advocate and apparently the new developer has been forced to stop construction because of flagrant zoning violations. Hmmm. Sounds to me like they need the Hamilton Avenue School Construction Committee to step in and lend a hand. God knows, we in Greenwich would be happy to send them over the border: permanently, if that’s what it takes.
Fair Market Value?
In my post yesterday about a building lot listed for sale on Thornhill Road I hinted that its asking price of $850,000 precluded a builder from making a profit and hence was too high. A reader then asked what a fair price would be for the lot. I think my answer is that “fair” has nothing to do with it. In a better market, where houses on Thornhill could command $2,000,000, $850,000 for this lot might fly. But, as Mr. Rumsfeld so famously said,you don’t sell your house on the market you’d like to have, you sell it on the market you do have. With that, he marched his troops into Iraq and the rest is history.
The market right now will not support a Thornhill price of $2,000,000. In fact, I’m not sure it will support anything much above $1,250,000 in which case, accounting for building costs, the market value of this lot is … very small. Don’t like that? Don’t sell, and wait for better days.
When I opined that relaxing the mark to market rule for banks might make sense several readers promptly corrected and educated me. The current value of anything, be it toxic loans or real estate, is whatever buyers will pay for it, not what its owner hopes it will be worth in the future. I did reprint a letter I received from a (soon-to-be unemployed) mortgage broker who said it wasn’t “fair” to make banks mark their unwanted loans down to zero because, while the market might consider them worthless now, surely a better time would come and some value would be discovered. When better times come, then those loans might indeed be worth something. But right now, securities with no buyers and real estate that no builder or even end user wants has no market value. Let’s hope that changes soon.
Going boldly where no editor has dared tread before.
Greenwich Time runs a hard-hitting editorial on property taxes today. It starts off with the usual liberal lament that Greenwich doesn’t pay enough taxes and Waterbury too much then, perhaps sensing that its readers might not agree with that proposition, switches gears and rails againt wasteful spending: that ought to appeal to these damn skinflint Yankees!
I was under the obviously mistaken impression that editorial writers took a position and then defended it. Our local paper differs, and has instead produced another soggy opinion piece that says and concludes nothing. I don’t purchase the Greenwich Time so I suppose I have no cause to complain about the salary paid to its editor, but talk about wasteful spending ….
Oh great, this we need?
Some nitwit claims that this is the perfect time for stay-at-home moms to become real estate agents. While surely it’s coincidence that the lady is flogging her new book on just this subject, I still question her sense of timing (and that of her publisher, come to think of it). If it works, though, I may finally release my own, long deferred opus, “Mom’s to Bond Traders – How to make billions from your own kitchen table”.
Update: a reader who knows (well, he thinks he knows) that I’m kidding about bond trading from the kitchen table warns me not to laugh: it’s been tried in the past with rather unfortunate results. As proof, he sent me this link to a NYT article on Japanese housewives going bust in currency trading.
Realogy feeling the squeeze
Firms financed by Junk bondsare getting pinched and Realogy, parent company of Sotheby’s and Coldwell Banker, is one of the pinchees. Ow!
British scientist says human evolution is at an end.
I think it’s the latter, myself, but I’ll wait to hear from the Greens – they’ll know.
Go ahead, take your mind off all things economic
Prowling the net just now, I stumbled across this Indian blogger. He seems to reprint other’s news stories but he has other links to other Indian bloggers and his own postings appear to present (on an admittedly cursory sampling) an eclectic taste of what’s going on over there. I’ve never visited the country but I’d like to. Until I sell a few more houses, however, this will have to do.