The gift that keeps on taking
Waxman to challenge Dingell for House Energy Committee chair. As promised by the One, say goodbye to coal, say hello to “skyrocketing energy prices”.
Daily Archives: November 5, 2008
The gift that keeps on taking
Interesting real estate forum over at Forbes
He can still vote at North Street School but not at 745 7th Avenue or at least, not for long: Fuld to be terminated by bankrupt Lehman at year’s end.
This would be neat, if it works
New coating technology captures more solar power
If true – it’s a press release from RPI – and can be made cost effective, it will revolutionize solar energy collection. It will also make obsolete the existing technology that moves solar panels to track the sun. Under the now-discredited theory of free enterprise, that would put some businesses out of business and free up capital for new business to take advantage of something better. Now, of course, existing businesses will stay operating thanks to taxpayer subsidies and more taxpayer money will rush to support this one. It’s a win win situation for everyone except those footing the bill.
Say, here’s an idea!
Can’t sell your spec house for $7.250 million? Delete the listing and bring it back on at $7.450! If that doesn’t work, I suppose you can yank it up to $12 million and see what happens.
To be kind, it’s possible that the builder of this home was so swamped with offers as he was building it that now that he’s nearing completion he feels confident that he can ask for and receive even more money. In which case, good for him – the market needs some good news. I myself am a little skeptical about this price on this street. Ridge Avenue is a neighborhood “in transition”, as we realtors like to say, with the previous high sale being $2.850 each for two condos on the corner of Ridge and Havemeyer. Those sales occurred last year; one unit was returned to market this year at $2.895 and so far has found no takers. 62 Ridge is further down the road, closer to the highway noise and the railroad and, although I could certainly be wrong about this, I wonder whether there is a market for a 10,000 sq.ft., 5 bedroom 7 1/2 million dollar mansion in a location that’s slightly out of the downtown district. I guess we’ll find out.
We discussed this house back when it saw an earlier price reduction, but here it is again, marked down today to $8.9 million, or 74% of its original price of $12 million. Sooner or later it will find its proper level.
My Dinner with Andre
Lunch with three close friends, actually, two of whom are real estate lawyers I labored in the trenches with back in our last bad market in the early 1990s. Their take? Things are simply awful, and much worse than they were back then (of course, we were all younger then, and optimism was easier to come by). “It’s as though everything just froze overnight,” one said. “Nothing is happening.”
I asked how many high-end properties were purchased with high-end mortgages and they agreed that, while a lot of buyers in the past years simply took out the $1.1 million in mortgage money that is deductible, there were plenty of buyers who were stretching to the limit to get the house they wanted. These two lawyers, by the way, are involved in probably 25% or more of the real estate transactions in town, so their view is a good one. Their prediction, one I agree with, is that nothing significant will happen in the market until January. But then a lot of people who have been trying to hold out are going to give up and put their homes up for sale. When they do they’ll price them to sell which will finally break the logjam that now exists, with realistic buyers butting heads with steadfast sellers.
If this prediction bears out, existing sellers are going to have a lot of competition and those competitors will be setting a new, much lower level for pricing. And if that happens, you out there who have been refusing to come down to a price that will move your house are screwed – the market will just pass you by and go to the new, lower-priced inventory.
So what should you do? The sad news is, there probably isn’t much you can do. All four of us diners agreed that, today, almost no price cut seems capable of spurring a buyer into action. If someone is too nervous to buy, they aren’t going to, regardless of what bargain they perceive. Of course, no house in Greenwich is worthless and if you marked anything down to some hypothetical price you’d find a buyer. But where’s the happy ground between a ridiculously low price and one that will make economic sense to you and still move a buyer? It’s hard to tell. The two quick sales I discuss below are evidence that, at least in some cases, price does still matter. The growing inventory, much of which has seen price reductions, indicates that demand is still too weak to be affected by price cuts and certainly not by 5%-10% cuts. So price it way below where you might have priced it two years ago and be prepared to whack at it even harder in 30 days. Might work.
I do suggest, however, that if you’ve been clinging to a price that you know is too high you might want to adjust it now, before the January flood ensues. Will it help? God knows, but it can’t hurt.
384 Round Hill Road
Some sign of life: two houses were reported under contract today, 79 West Brother Drive, in Millbrook ($2.495, ask) and this fantastic property on Round Hill Road. This is a 1745 Colonial originally owned by a Lockwood and still has 6.6 acres attached to it. Diddle McAlister of Round Hill Partners originally listed it in September at $5.250 which was not a silly price whatsoever but, in this market, nothing was happening and so she and the owners slapped two quick price cuts on it, one 30 days after it listed and the second three weeks later, on October 28th. The third price, 15% off the original, or $4.450, did the trick. The lesson here is price your house reasonably to begin with and if it turns out you miscalculated – easy to do in a declining market – don’t hesitate to correct your error. This house was on and off the market in less than 60 days, which is a good result in a strong market and a real accomplishment today. Congratulations to Diddle and her clients.
So do two contracts mean we’re out of the woods? I don’t think so – check back in a few minutes for my report on a lunch I just had with two real estate lawyer friends. They’re discouraged.
All quiet on the front
Real estate activity in town is just about nonexistent. No contracts, no sales, few new listings and very, very few showings of existing listings. I was just speaking with a friend and fellow agent who told me that she has buyers with $4 million in cash who want a house in a specific part of town, on one of a few specific streets. There’s nothing out there. I just checked, although my friend is one of the best agents working and would certainly know everything that’s available and she’s right: the one listing in that price range is in the wrong neighborhood (and hopelessly over-priced), another is on a very busy street and the handful of other listings are priced to appeal to Bill Gates, Warren Buffet and nobody else.
So we’re in a quiet time. Tons of inventory, none of which appeals to buyers, a dearth of well-priced houses and a dwindling pool of buyers who still have the job security, cash and desire to move up. This won’t last, I hope, but I do wonder if we’ll see any resumption of business before the new year. I’m beginning to doubt it.
Hold on to your hats
Because here we go!
The Democratic president-elect has much more on his agenda, amounting to what may be the broadest overhaul of the U.S. economy since Franklin D. Roosevelt’s New Deal. Beyond job creation and big investments in public works, Obama intends to shift the tax burden back toward the wealthy, roll back a quarter-century of deregulation, extend health-care coverage to all Americans and reassess the U.S. government’s pursuit of free- trade deals.
So here’s a test of your political convictions: Don’t sell your house, hang on and wait for these nostrums to work their magic and then sell for a fortune; the extra capital gains you’ll pay will be as nothing. Or get out now while you still can.
Voters pile on debt, nationwide including $9+ billion in California for a shiny new train.
John Matsusaka, executive director of the University of Southern California’s Initiative and Referendum Institute in Los Angeles, had suggested the contracting U.S. economy and slump in consumer spending may sour taxpayers’ appetite for debt.
“I thought voters would say, `We don’t want to borrow because these are tough times coming,’ but I guess not,” Matsusaka said.
Tells me that taxpayers still believe in a free lunch, provided them by the Tooth Fairy. That’s the same benificent being who’s going to pay Obama’s supporters’ gas bills and mortgages, I believe – I do so look forward to the anger and chagrin that will sweep this nation in, say three years, when the Rev. Wright’s chickens come home to roost.
Million dollar closet?
I saw a really nice house yesterday: new construction, priced at $9 million. That’s an aggressive price for this market, I think, but what struck me was that the builders opted to place just one closet in the master bedroom. Mind you, it’s a very nice closet, easily the size of two of my own kids’ bedrooms combined, and one sure to please the lady of the household. But will she be pleased to have to share her closet with her husband? A quibble at, say, $2.5 million may be a major objection at this price range. I’ll be curious to see how this works out.
Write comment on blog, have angry real estate developer show up and scream at you. Hasn’t happened to me yet but I did find one seemingly miffed realtor at an open house today, a house that has been discussed on this blog. I say “seemingly” miffed because he wouldn’t speak to me, so who knows? Perhaps he was just tongue tied with admiration and gratitude.
I’m a winner either way
It looks as though I’m about to find out if everything I’ve believed since I was 18 was right, or wrong. If I’ve been wrong all these years, then, starting tomorrow, we’ll see world peace, economic prosperity at home, full employment with everyone having rich,meaningful jobs, clean harbors and bays, an end to global warming, no more poverty and happiness abounding in every clean, decent home. In short, the Jubilee will have arrived and all because the collectivist way is the right way. And who could complain if all those good things come to pass?
If I’ve been right, then none of the above will happen and the country will be ruined, but I’ll have the deep satisfaction of having been proved correct. Too bad for my kids but that’s their look out.
Either way, there’s absolutely nothing I can do about it so what, me worry? Not I.