Do we really have to wait that long? Oh well, here’s a group that’s trying to achieve that noble goal.
Daily Archives: January 11, 2009
Go belly up, I think, or at least, many of them will. Of the 549 single family houses currently listed for sale in Greenwich, 113 of them were built in 2005 or later (104 of those were built after 2005). While a few of these have sold once and are now back on the market, even more new houses are hiding behind their builders having moved into them or rented them out for less than their carrying costs.
So let’s assume that 113 is a rough figure of unsold spec houses for sale. Their prices range from $25 million to $1.350 million and, while I won’t say that I’ve seen every single one, those I have seen are, without exception, suffering under handicaps like poor location, poor land, crazy prices, etc. I don’t expect any of them to sell for their current price. Many of these houses probably still have some profit built into their prices; many do not. Some builders have the financial strength to take a big hit; many more do not.
This happens every cycle – builders get wiped out and are replaced with a new generation of optimists. I think we’re going to see more of that this year, however, than we ever have before.
That’s what a Stamford Rabbi proposes. I don’t have a dog in that fight so I’m staying out of it except to suggest that it might work better if someone could persuade Bernie to convert to Catholicism first. Excommunication seems to carry more clout in that religion.
The author of the linked article, Caroline Waxler, asks, “What do Jesus and Madoff have in common”. Her answer is, they’re both Jews. My thought is, if people wait just a little bit, it will be that they both died impoverished. Or at least I hope so.
The Brits and their former colonies, except us, advertise their houses as “inviting offers between ….. and ……”. These days, when no one seems to know what a realistic asking price is, perhaps we in Greenwich might adopt that approach. I stopped by that new construction of Byfield the other day to see if the listing agent could explain how its price dropped from $9 million to $5.1 million and back up to $5.9 million. He basically shrugged and said, “who knows what it’s worth?” I refrained from giving him my guess but he has a point. An ad that said, “entertaining offers from $4,750,000 to $5,350,000” (just to pluck some numbers from the air) might not elicit any offers, but it would send a strong signal that the seller was willing to negotiate, provide some sort of floor defining what, at the present time, a seller considered a low ball offer too low to consider, and would spare him the embarrassment of looking as foolish as he does when he’s yo-yoing the price up and down.
Just a thought.
Or its real estate, anyway. Few buyers, lots of inventory, falling prices. Sounds very much like Greenwich. Boring place to live though, I hear. No Madoffs, Noels or Lindemans. How dull.
Nice comeuppance to all of us in the industry, I suppose. To be fair, I don’t believe any of us not on Wall Street (and a fair number of those who were) had any idea what the wizards were doing with leverage and the scope of the risks they were creating and thriving on. But live and learn. Here’s a good point:
One would hope there is a sense of embarrassment for residential brokers. At the least, they should vow to discuss the market only in terms of the more reliable median price—the midpoint, or price at which there are an equal number of sales above and below—rather than the usually inflated average price.
But if they don’t, here’s what New Yorkers should remember for the next cycle. The city’s housing prices rose because of a strong economy, fueled by low interest rates and extraordinarily easy credit, just like everywhere else. They will decline sharply here for the same reasons they are falling elsewhere. To the extent New York did better than other geographical markets, it is because Wall Street was the nation’s most profitable sector in the last boom. And a rebound in New York housing prices will depend primarily on a Wall Street revival.
Greenwich median prices were great – it’s the dependence on Wall Street and its hyper-inflated salaries that proved the joker in the pack. Will there be a Wall Street revival? I hope so. If not, ouch.
Reader Welly sends this link to a NY Post story: Madoff scams own sister of $3 million. Her Palm Beach bungalow is now up for sale, her membership at the Palm Beach Club ($35,000 per year) in jeopardy. But she’s not angry: “Bernie’s Bernie,” she says philosophically. “Sometimes a man’s gotta do what a man’s gotta do.”
Monica Noel, in the background during this interview, applauded loudly.
Our most trustworthy news source (well, it’s not CNN, anyway) Pravda reports that we’re on the brink of an ice age. Works for me – I’m off to find my mukluks.
Not for this house, not for this road, I don’t think. This house was built on land purchased by, I think, Jordan Saper for $1.050 million in 2000. He razed the existing house, built a new 5 bedroom septic system, then offered it for sale in 2005 for $2.350. Someone bit (LoParco, I think) and paid an unspecified sum for it in November of that year. This house was then erected and put up for sale last Spring for $5.495, while it was still being finished. It dropped 9% Friday to $4.995 million. It’s been a long time since anything of significance sold in Cos Cob and I don’t think this will be the house, at this price, to break that quietude.
UPDATE: out of curiosity, I checked high end sales in Cos Cob. There have been a few over the years. The Pecora brothers sold their own project, similar to this one, at 200 Cognewaugh for $5.250 in March, 2007, and another builder sold 4 Holly Way at its asking price (!) of $4.295 in October, 2005. So perhaps this will sell somehwere in between those two prices. Perhaps. My own suspicion is that neither buyer could get anything like what they paid for their house now.
This modest house in Cos Cob sold four years ago (February, 2005) for $1.570 million, or 87% of its original asking price of $1.799. In March, 2008 the new owners listed it for sale at $1.795 but it didn’t sell. A relocation company took over this summer and after a total of nine price changes, finally dropped it to $1.2 million – 67% of that original ask and 76% of what they paid for it. It was reported as under contract Friday; no price reported yet, but I’m guessing it will be well under $1.2. $975? $1.1? Whatever, it won’t be providing much cheer for those hoping to see a bottom in our local prices.
Smart Greenwich kids with Harvard degrees? Astrophysicist? Let’s start a hedge fund! I think the train already left on that idea but I’m confident that we’ll eventually see a new wave of smart kids who find a new way to generate wealth. They always do, God bless them.
Computer use banned? Pending.
So how’s all this working? Beautifully: Snow traps thousands at Madrid airport.
If we can just keep the Greens from destroying what’s left of our economy we can join China in the next wave of prosperity. I’m doubtful, though, and think that we’ll join Europe in its rapidly escalating slide back to the Stone Age.