Post-foreclosure blues

Sad video of “trashouts” in one of California’s thousands of foreclosed homes.

“So far, so good”

So said the man when questioned as he fell past the 32nd floor of the Empire State Building.

Reader Tom  Kazazes sent along the following chart he prepared. What, me worry?

 

They over-price out west, too

From Tucson comes this tale of stupidity. The blogger is too kind to mention names and addresses but out here in Greenwich, dumb sellers aren’t so lucky.

how not to inspire confidence in your listing

Start out by listing it way high, let’s say, $1,750,000, 
then drop the price to $1,455,000, and keep dropping it to $1,355,000, $1,295,000, $1,249,000, $1,195,000, $1,145,000, $1,095,000, $999,000, $950,000, $925,000, $900,000, $950,000, $900,000 and then to $850,000, for now. I bet they’ll get it right eventually.

OK, the pricing strategy didn’t work, so how ’bout this,
OWNER FINANCING/LEASE PURCHASE AVAILABLE. EASY TERMS, ANY CREDIT! INSTANT EQUITY! CALL WITH CREATIVE OPTIONS OR OFFERS!OWNER-AGENT.

Yep! It’s an Owner-Agent. (see, we’re not all perfect)
Nope, I can’t give out the address, MLS #, etc, but this is for real and I’ve probably said enough.

Would you pay $6.2 million for this house?

 

 

518 Round Hill Road

Well some bank did, by advancing that sum to Dominick DeVito and his scam company, DFT Construction. As I noted in an earlier post, construction loans are supposed to be paid out in stages as specific building goals are achieved: foundation poured, framing done, house closed in, etc. What you see above is what the bank would have seen had they sent an inspector over before forking over $6.2 so I ask again: would you pay that much for this house in this condition? I don’t think you would, and I can’t think of any innocent explanation for the bank’s behavior here. 

So here’s another question: clearly, $6.2 didn’t go into this house so where is it? In another failed DFT project? Dominick’s pocket? The bank appraiser’s pocket? No one’s talking to me, at any rate and my personal hunch is that, if ol’ Dom ended up with it, no one’s going after him. He’s pled guilty for bank frauds committed in Westchester County and I don’t believe the federal prosecutors who nailed him for that have jurisdiction outside of the Southern District of New York. Will anyone in Connecticut bother chasing him for this one or will they figure that he’s already going to do time in New York? I’m betting on the former in which case, they’ll be some cash waiting to ease DeVito’s readjustment to civilian life after his release from prison. 

Since it’s our tax money that’s going to pay for this loss, I’d like to see an inquiry made. And, were I a prosecutor, I think I’d start at the offices of the lender and ask how this much money escaped from their vault.

Update: Just for fun, I’ve been Googling some of Dom’s partners. There’s Dominick Carpenito, for instance, second in command of DFT LLC and here’s a bank sale of a newly built single family Florida residence owned by a Dominick Carenito “and others”. Same guy? I’ll bet it is – Jimmy Licata isn’t the only crook to commute between Greenwich and Florida; these guys follow the money.

What’ll we do, oh what will we do?

So your house has been on the market since spring asking $2.6 million and there are no takers. It must be overpriced so do you knock it down: (a) 25%, (b) 15%, (c) 4% or (d) raise that sucker! Most owners choose (c) or (d), The owners of 25 Jeffrey Road chose (c) and today you can buy their house for $2.5 million. Such a deal.

In the recent past, a piddling price cut served to notify the real estate community that the seller was flexible in his price and was open to bids lower than asking. I don’t think that quiet signal is being heard these days, so if you want to get buyers’ attention do something dramatic. While it’s not chump change, $100,000 off a $2.6 million house is not dramatic.

Realogy death watch, continued

The New York Times says of the parent company of Sotheby’s and Coldwell Banker,

Meanwhile, we are in the world of the walking dead. Companies such as Realogy have bonds that now trade at as little as 15 cents on the dollar and have a yield of more than 45 percent. This is not General Motors, where a government bailout may be coming. In this situation, the equity is worthless (and likely to remain worthless in any scenario) and the debt is getting close. Yet the equity holders (Apollo Management Group, in the case of Realogy) still control the company. This is partly an after-effect of the credit bubble — the Realogy debt, like much leveraged buyout debt, is “covenant-lite” and so the debt holders have little control over the company when things go south.

But in these circumstances, Apollo has every incentive to take the company’s cash and go to Vegas, or perhaps start mining for gold. These days, this might have a greater probability of success for the equity holders.

Well I’ll miss them.

Where was our Attorney General on this one?

eHarmony has settled a suit brought by New Jersey’s Attorney General and will redesign its website to accommodate the dating needs of homosexuals.Let’s see, a private enterprise choosing to sell a particular product to a particular group of people, there must be a violation of law in there somewhere, right? The author of the article I link to compares it to a vegetarian suing a steak house for not offering vegetables, but what most struck me was, where is Mike Blumenthal? He loves this kind of stuff and God knows, Connecticut’s budget is in as lousy condition as New Jersey’s – are we going to just stand by and watch New Jersey fritter away tax dollars and steal the media spotlight? Where is our Nutmeg pride?

How many unfinished, abandoned spec houses are out there?

Someone asked me this question yesterday and I really don’t know. Many of them never reached the stage of being listed on the MLS so absent a thorough examination of the open building permits in Town Hall, it’s impossible to say. They’ll be flushed out, though, when ownership reverts to the lenders and they come on as land with tear-downs on them.

14 Baldwin Farms South is an exception in that, although all work seems to have been abandoned last January, it shows on our MLS as active. The listing may be active but the construction certainly isn’t. The door’s open, there’s a water shut-off notice on the door and, while there still seems to be electricity (an outdoor light still shines), there’s no real sign of life. What happens to a house like this that sits through the winter unheated? Nothing good. I’m astonished that whoever is owed money secured by this house has done nothing to safeguard the asset but I suppose the banks are all busy these days.

This was originally listed for $9.975 million and dropped down to $6.795 before they quit. I can get it for you cheaper – call me.

40 Byram Shore goes to Royal Bank of Scotland

A reader asked about a property transaction reported in the GT today showing this place going to RBS for a buck. “Is that a foreclosure?” he asked? Yup.

The unfortunate homeowner originally  bought the  place (across the street from the water so never worth all that much) for $739,000 in 2000 and must have run into financial trouble in 2006 because he put it up for sale at $1.595 with the notation that “seller eager for expeditious closing”. My advice, which he obviously didn’t get from his broker, is that if you’re in trouble, don’t mess around with a bad price. In any event, it didn’t sell and I’m pretty sure it went over to the bank awhile ago. At least, Weikert was trying to sell it as land for $949 and showed the owner as “retained property” which sounds like a bank/owner to me. That was back in November ’06 so perhaps the foreclosure dragged on but it now officially belongs to the bank. Lucky bank.

Sign of the (Greenwich) Times

Today’s real estate section in Greenwich Time contains no ads by David Ogilvy. Not one. This may have happened before but in the 35 years he’s been in business, he always seemed to have several pages of his listings, all beautifully and expensively photographed. Long before I entered the real estate business I always admired the effort the man expende to establish his brand. If even he’s decided that it’s a waste of money advertising this week (admittedly, the week before Thanksgiving and a traditionally slow weekend), it says something, I fear, about the state of our market.

Testing the waters in Byram

57 Byram Shore Road is a nice older house with, these days, “water views” (its land was long since divided). It was first offered for sale in January 2005 for $5.775 million. The seller must have received some honest feedback at her first broker open house because it was dropped to $4.775 million just a few weeks later. It was still too expensive and languished, slowly dropping to a final price of $3.950 and then expiring unsold. Six months later in June 2006 the owner tried again, this time at $4.495, apparently hoping that the intervening months had magically added $545,000 to the house’s value. Sometimes there is no magic and that was the case here – the listing expired again, still priced at $4.495 in November of that year. After some regrouping the house is back today for a third time, priced at $4.650 million. If the real estate market has improved since November, 2006, it escaped me here in Riverside. Perhaps Byram is different.

Real estate is to Greenwich as Wheat is to Kansas

Oops!

The NYTs reports that grain prices soared but farmers waited to sell, sure that prices would keep on climbing.

Oklahoma exports two-thirds of its wheat, more than the country as a whole. That worked to the state’s advantage in 2007 and the first half of 2008, as a combination of bad harvests in Australia, the cheap dollar and rising Asian consumption created intense international demand.

The state’s farmers responded, naturally enough, by ramping up production. Because of better weather and therefore a better yield, 166.5 million bushels of wheat were harvested in Oklahoma this spring, a 10-year high. And because of the high prices, the crop was valued for the first time at more than $1 billion, nearly twice as much as 2007 and nearly three times as much as 2006.

“They made a killing,” said Kim Anderson, a grain economist at Oklahoma State University.

Assuming, that is, they sold. The farmers who cashed in at the right moment are acquiring legendary status. “I know a fellow that sold some wheat for $12 a bushel. That was almost beyond belief,” said James Kinder, 74.

But his son suspects that most were like the Kinder family: they either did not sell or did not sell enough.

The Kinders still have about 40 percent of their wheat, stored on the farm and in commercial grain facilities. “Farmers are terrible marketers,” said Jimmy Wayne Kinder, 50. “We fall in love with our crop.”

It was the same misguided optimism that caused homeowners to think their houses would always keep increasing at a 20 percent annual clip. Farmers across the country fell prey to it.

David Kanable at the Oregon Farm Center, a mill near Madison, Wis., was paying $7.25 a bushel for corn in June. “We never had a farmer lock in at that price. They wanted $8,” Mr. Kanable said. On Thursday, the mill was paying $3.17 a bushel.

 

Owning a home is not the same as owning a commodity – you live in one, you own the other solely in order to sell it. But an infatuation with rising prices is something a Greenwich matron and an Oklahoma dirt farmer could bond over.

Financial Industry to cut still more jobs

This guy predicts 350,000, worldwide. I seem to remember reading that the tech industry lost 150,000 jobsin California alone when that bubble burst, without huge affect here in Greenwich, but most of those people weren’t house hunting here.