Daily Archives: December 3, 2008

Seth Weinstein predicts the fall, June, 2006

Sethe Weinstein, of Hannah Investment (or something – they do real estate development) rebuilt the Showboat Inn into the Delmar, transformed Stonington’s dilapidated waterfront and has done interesting, successful rehabs and renovations throughout Stamford, Fairfield and New York City. In short, he knows about real estate. So it’s interesting to see him interviewed here back on June 19, 2006 about the prospects for residential real estate. Among his predictions: there was too much construction in the New York metropolitan area, and too much inventory combined with too high taxes would make for a buyers’ market and even negative appreciation. He didn’t like Miami’s or Las Vegas’s prospects, either.

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The most hopeful thing I’ve learned about Obama so far

From Esquire, Bill Richardson on his debate experience :

As I’m chatting with Obama, the moderator says, “Governor Richardson, what do you think of that?” And I look at him like a deer in the headlights. I was about to say that I hadn’t heard, when Obama puts his hand over his mouth and says, “Katrina.” So I gave my four-point plan on Katrina. When I was done and the debate moved on, I looked over and said, “Thanks, you’re okay.” He said, “Nothing to it, brother.”

I could learn to admire a man with that kind of class.

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Macs still virus free

20 virus attacks a year vs. 20,000 – 30,000 per day for Windows, according to Forbes.

 Apple devices are safe “right out of the box.”

That sounds like a bold statement–but at least for now, it’s also true, say security researchers.

Even as Apple’s share of the computer market has risen, the incidence of viruses and Trojans has–surprise–gone down. In the last six months, Finnish cyber security firm, F-Secure, has detected 13 new samples of malicious software, or “malware,” targeting Apple’s OS X operating system.

By contrast, every day F-Secure pulls from the Internet between 20,000 and 30,000 new samples of malicious code aimed at PCs. “I can’t even calculate the percentage that targets Macs,” says Patrik Runald, a researcher with F-Secure. “It’s peanuts.”

I was told by a tech guru that Greenwich Academy switched to Macs some years ago because the kids kept wandering off the reservation with their Windows machines and bringing down the entire network. I don’t know if that’s true but I’ve used Macs since 1988 and never had a problem with viruses or worms or whatever the hackers dream up.

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Kiwis don’t like bad news either

New Zealand real estate agents breaking bad news to sellers about their home’s worth. It’s getting nasty down under.

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Filed under pricing

Can’t say I disagree

Hi Chris, I always read your blog and appreciate your viewpoint on all facets of ‘Greenwich life’ and otherwise. However, I worked at Merrill Lynch during Henry Blodget’s tenure (and demise) and find it amazing that anyone listens to him anymore. He was unethical, arrogant and…wasn’t he banned from the securities industy? Blodget was one of the people who gave Wall Street a bad name, which is a shame since most of us were early risers, hard workers and focused on making money for our clients first and foremost! There are lots of excellent financial journalists out there – let’s leave Blodgett where he belongs …. residing in the ‘where are they now’ pile of cast-offs.

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Morgan Stanley/Goldman Sachs merger?

The two principals are wining and dining, it says here. If they do merge, Mssr. Blodget predicts that 49% of the combined workforce would become redundant. That’s a suspiciously precise figure, no?


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NPR this afternoon announced that Barak Obama had named a “key figure in his administration”. Turns out it was Bill Richardson, appointed to be our next Commerce Secretary. I’m sure that Governor Richardson is a fine man and our country will be well served by him but “Commerce Secretary” and “key figure” seem to me to be mutually exclusive terms. Can you name our current Commerce Secretary? Without Googling? I can’t.


Filed under Buying/Selling Greenwich Real Estate

More on mortgage fraud

Dead for 19 years, this man receives $533,000 mortgage. The bank is now foreclosing on his widow, who had nothing to do with the scam.

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Slow payers

I just learned of an agent who has been owed a smallish -$4700 – rental commission from a firm here in town since August. The firm admits it owes her the money but just doesn’t pay it. A harbinger? Who’s the firm? All in good time – I wouldn’t want to libel a fine company that’s temporarily down on its luck. But if I hear of more such incidents, I’ll report them here.

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10 Little Indians

One of Nashville’s largest real estate brokerages is closing shop. It’s a Realogy -owned firm (ERA) but the real story I suppose is that the current market couldn’t support a 250 agent business. The soon-to-be-idle owner doesn’t see the Nashville market coming back for at least 12 months. All real estate is local, as a commentator below points out, but I suspect we’ll see more of this happening around the country.

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On the other hand, look what you get in Tucson

Bank owned in Tucson AZ

Bank owned in Tucson AZ

$729,900 . Why are we still here?


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Cheapest house since 2000?

286 Hamilton Avenue

286 Hamilton Avenue

It may not be much, but it’s home and, at a final asking price of just $375,000, the lowest priced house to sell in town in a long time. I held the record for the cheapest house sold in 2006: $475,000 or thereabouts. Jean Ruggiero sold this one, naturally – she sells almost everything – so I’m now in good company.


Filed under Buying/Selling Greenwich Real Estate

Someone didn’t get the memo

A house that asked for $1.5 million way back in 1996 took forever to sell and finally went for $1.1 more than a year later. It came back up for sale in 2003 asking $2.4 and after 18 months did sell for $2.250 in January 2005. Now it’s back again, unchanged in any way if the listing is accurate, asking $2.8 million. It’s true that in the past, $550,000 in appreciation over a four year ownership wouldn’t have been completely out of line, although it might have been stretching things a bit; today I think it is, especially considering this house’s history of being a difficult sell. But, as always, it’s the market that decides these matters. not my (or your) opinion. If there still is a market, we’ll see what it says.

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Filed under Buying/Selling Greenwich Real Estate

Cos Cob and Greenwich spec houses

As long as I was looking up eastern Greenwich projects I thought I’d also check in on the other two districts. Ouch. Cos Cob has 14 spec houses on the market, from $1.495 to $6.795 million. The latter is on Cognewaugh and at the risk of offending my Cognewaugh reader again, I think its builder will be incredibly lucky to land a buyer in that price range on that street.

Greenwich proper? Oh gosh, who were the bankers who loaned on all these? There are 73 spec jobs listed, from $999 (after it didn’t sell at $1.495) to $25 million for that monster at 253 Round Hill Road. Monstrous in size, I hasten to add – I’m sure it’s a very nice house inside, even if it does lack something in the way of coziness. A few of these houses haven’t been built yet and probably never will be but I also know of still more houses that are being built that haven’t been listed  so 73-75 seems like a supportable number. Looking for a bargain? I’d skip Old Greenwich and focus on this group of disappointed contractors. I suspect that, just as in cycles past, we’re going to see a good number of local builders disappear from the scene. I’ll be sorry to see them go but if experience is a guide they’ll be replaced by a new batch. There’s always someone who slaps his hands together and says, “I hear there’s money to be made in Greenwich”. And indeed there is, until there isn’t.


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Old Greenwich and Riverside spec houses

A commentator guessed that there were 10 spec houses for sale in Old Greenwich and suggested that their builders were in trouble. I won’t hazard a guess about the financial condition of the people behind these projects but there are in fact 10 spec houses for sale south of the Village (plus 3 north of the Post Road, but those don’t really count), priced from $2.295 to $5.795. That’s a pretty large number, even for good times. Right now, I’m inclined to correct the commentator on only one thing: he said this was “bad news’. While it certainly is bad news for the builders, I think it’s good news for buyers. There are bound to be some bargains to be wrenched out of this mess.

Riverside is in better shape. There are six new houses listed for sale but I don’t believe any have broken ground, so the builders may be sitting on land but they don’t have the expense of an actual construction project to carry. That should give them more staying power so if you like to negotiate, I’d head for Old Greenwich instead of Riverside. Of course, even Riverside builders would like to be employed; if you want a custom job, now’s the time to ask for one.


Filed under Buying/Selling Greenwich Real Estate, Old Greenwich, Riverside

Housing now undervalued?

Reader Tom K. sent along this link to an article suggesting that house prices have come down enough to be fairly valued and are now plunging below that level. Read it and decide for yourself but it does accord with my own thoughts this morning triggered when I saw the sales reports for new vehicles. Honda and Toyota sales are each down around 33%. think what you will about Detroit’s offerings, these two brands offer great value and excellent cars. If they’re not selling, there’s something other than price that’s wrong: in this case, consumer confidence.

Eventually, I hope, people will resume buying cars and at prices that will probably be close to where they are right now (we’ll ignore the $20,000 rebates being offered by Cadillac – we’re talking Honda and Toyota here). It’s possible that the same thing will happen with Greenwich house prices. I have my doubts about that but I think many of our sellers who are clinging steadfast to their prices do believe it.

In which case, this article should give them some cause for cheer.


Filed under Buying/Selling Greenwich Real Estate

The Realogy mess, explained

The latest blog from the paper I love to hate, The New York Times.

Realogy is the former real estate services arm of Cendant, and it owns such venerable real estate brands as Century 21. Of course, given the state of the housing market, the company is quite troubled and is probably now deeply insolvent. Mr. Icahn’s complaint alleges that, calculating back from the value of its debt, Realogy’s liabilities now exceed its assets by anywhere from $3 billion to as much as $7.3 billion. In addition, based on a comparable-company analysis, Realogy’s liabilities exceed its assets by anywhere from $3.3 billion to $6 billion.

Nonetheless, because of the covenant-lite nature of its debt and the pay-in-kind, or PIK, toggles on some of it, Realogy is not yet in a position where it must file for bankruptcy.

Caught in this trap, but still in control of Realogy, Apollo has launched a clever exchange offer. Realogy has senior secured debt under a credit agreement of approximately $4.445 billion. It also has $1.7 billion in principal aggregate amount of 10.15 percent senior cash notes; $875 million in principal aggregate amount of 12.375 percent senior subordinated notes; and $550 million in principal aggregate amount of so-called toggle notes. The senior notes and the toggle notes are unsecured and rank pari passu, while the other notes are unsecured senior subordinated notes, meaning they rank below the senior notes and toggle notes in priority.

On Nov. 13, Realogy announced an exchange offer open to all of these notes: Realogy would exchange second-lien notes in the amount of $500 million for up to $1.2 billion in the prior outstanding notes. The exchange offer is arguably coercive, since Realogy is offering 36 cents on the dollar for the senior subordinated notes, 50 cents on the dollar for the senior notes, and 47 cents on the dollar for the toggle notes. These amounts are significantly above (more than double) the value at which the notes are currently trading in the markets.

Moreover, the newly issued notes will rank in priority above the pre-existing notes. So the current holders are incentivized to tender or otherwise be moved down the hierarchy in payment for their notes. The new notes will mature on April 15, 2014, the same date as the toggle notes and the senior cash notes, but a year before the senior subordinated notes. Guess which notes Apollo owns? Yes, Apollo owns $69 million of the senior subordinated notes — the notes that stand to benefit the most from the exchange (at least according to Mr. Icahn).

Most importantly, according to the hierarchy of exchange, if enough of the senior subordinated notes and senior cash notes tender, then none of the toggle notes will be exchanged. High River holds the toggle notes and, not surprisingly, it is not happy about being moved down the payment chain.

As our own Floyd Norris detailed in his article last week, the noteholders here are a bit stuck – there are no fiduciary duties to debtholders under Delaware law, at least in the zone of insolvency. This leaves only contractual terms of the indenture for a claim. Mr. Icahn has sued claiming that the exchange is 1) a violation of the indenture for the toggle notes and 2) he has also claimed the exchange is a fraudulent transfer.

There’s more, obviously, so if you’re interested, read the whole thing. If not (he said, bowing to a few commentators on this blog) don’t.

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Can Simmon’s Lane residents now breath easy?

Here’s a list of Russian oligarchs who’ve lost a bit of their joie de vivre in the collapse of the Russian stock market. Check for the name of your own favorite, either the fellow who wanted to build that 900-toilet whorehouse on Simmons or perhaps the mysterious “Boris” who’s agreed to buy your own mansion – he may not make it to the closing.

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Filed under Buying/Selling Greenwich Real Estate, current market conditions

Nokia’s cellphone business isn’t the only thing hurting

30 Owenoke Way in Riverside was listed for $3.495 million back in April 2006. That proved too optimistic but it was purchased by Nokia for one of its executives in June, two months later, for $2.950. The exec must have returned to Finland because the house came back on this past July for $2.995 and was reduced November 25th to $2.895 – a pretty good price, I thought. But today it’s been cut to $2.6 million. Here’s a company that definitely doesn’t want to own this house come the new year. If you’ve got credit, you might want to take a look at this place. My guess is that you can drive a still-harder bargain.

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Filed under Buying/Selling Greenwich Real Estate

Sending the kid off to UConn looks better and better

Harvard’s endowment fund down 30%, more losses expected. Serves them right – wasn’t it their business school that sent all the wizards to wreak havoc on Wall Street?

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