Daily Archives: January 15, 2009


A reader has sent me a very thoughtful letter about Greenwich real estate prices and our expectations, which I will post below. Before I do, I thought it would be useful to post some statistics compiled by Shore & Country Real Estate, culled from SearchGreenwich.net, a private service that mines our MLS data. These don’t reflect non MLS sales but they do capture about 95% of the market.


I’m hopeful that clicking on the image will enlarge it. But here’s the scoop:

1999: average price, $1,330,518; median: $861,125

2003: average price, $1,757,020; median: $1,175,000

2005: average price, $2,470,118; median: $1,750,000

2007: average price, $2,973,201; median: $2,100,000

First 9 months of 2008: average price $2,824,166 (-4%), median: $1,962,800 (-7%). The last quarter will show a larger decline, but so few sales that it may not be useful.

So where are we headed: 2005, 2003, 1999? Jury’s still out, I think. Now to my reader’s letter:



I am of the opinion (and have been for some time) that the news coverage of economic events will start to improve on Wednesday of next week. Yes, I believe that the media that helped elect Mr. Obama has a huge vested interest in his performance, particularly in first 100 days. Thus, I think we will begin to see some modestly more positive coverage and spin on statistics than we have seen over the past eight years. The item linked below is just one example of the media piling on the negativity. Perception sometimes become reality but if you can move the perception a bit more toward the positive, the reality may follow on as well.




As much as you may not want to see it, I think your blog runs the risk of doing similar things to Greenwich RE. No, I am not saying you are a god nor that you are making potential homeowners list their homes at unrealistic prices. However, in a market that has been hurt economically and is experiencing a very serious “buyers’ strike”, focusing on the misguided home sellers only makes potential buyers think that they would be chumps to come into the market. Or, if they are ready to buy, that they come to any home thinking that any price that is not down 40%+ from the original asking price is mispriced. However, when there are no transactions, there is no price discovery, so sellers can only work with anecdotal evidence provided by presumed experts, etc. In case you don’t realize, you are one of those experts (real) and your commenters, irrespective of knowledge or seriousness, gain a sense of legitimacy by commenting on your site.


As in other markets, feedback loops are created and, with no information or transactions to the contrary, a consensus can build and the loop can begin to feed upon itself. It happens in the financial markets all the time, both on the way up as well as on the way down. Thus, markets get overbought and oversold with regularity when the market starts really moving. As we have seen, this happened in real estate and risk assets over the past decade (on the way up) and is now operative on the way down.


I am not blaming you and I am not suggesting that your observations about the market receding to levels of a number of years ago are neither correct nor misguided. However, have you noticed that you are starting to draw commenters who seem to subscribe to the Rubini/Schiff/Faber/Whitney world view and wish doom upon the world. Several comments lately (mostly anonymous or with silly names) have not only been downbeat, but I would characterize them as mean as they seem to relish the collapse of the Greenwich RE market. I have seen this before and it usually starts on blogs when an entry is linked on another popular site and draws new viewers (as you have of late). These permanently negative basement dwellers see an opportunity to be heard and become regular visitors/commenters. I see them all the time on other blogs like Clusterstock, Dealbreaker and others and, when they become regular visitors, they can really skew a site’s view to the perpetually negative. Le cages aux folles, even vultures.


No, I am not suggesting that the messenger should be shot for delivering bad news or pointing out inconvenient or uncomfortable facts. However, without transactions, current musings about the floor are simply conjecture as a lack of buyers and realistic sellers prevents proper price discovery. Sure, one can drag out the home affordability index and point out how overbought real estate became and assume that reversion to the mean is necessary. However, that works mostly in liquid financial markets where the transactions costs are low, transaction speed is high and the participants don’t have to live in the traded good. It works for tulips but I am not sure it works for 4-bedroom colonials. That said, yes, I am a homeowner and I have a view, a bias and, maybe, delusions.


Finally, in my opinion, anyone wishing/hoping that Greenwich RE prices revert to mid-90’s levels is unlikely to be a current homeowner nor someone who really wants to live in the Greenwich that implies. That is, if you are hoping that the Grand List shrinks to 50% or less of its 2007 peak, you have not given much thought to the impact on the Town vis-à-vis its tax base and budget nor the impact on the quality of life, services and mil rate that such a compression implies. Yes, we all happily lived in Town in the mid-90s and never thought we were not blessed. However, the contraction such price levels suggests, along with a changed tax burden that has relied more heavily on commercial and office properties, would come very quickly rather compared to the 15 years that has brought us to this point. The deflation in services and/or increase in taxes will leave many of us shell-shocked which will then have an impact on housing turnover, etc. Another feedback loop of sorts.


Of course, it is your blog at the end of the day and you are entitled to write what you want, how you want and publish comments as you see fit. However, as a relatively long-time reader, I felt the need to share my observations with you.


Chris, feel free to post or quote this in part or whole or not at all. I would be interested in the comments it draws. However, be mindful of attribution to me specifically. Thanks.



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Obama: Bush may be leaving but don’t worry, you’ll never notice he’s gone”

Our new president has discovered nuance.

Hat tip: Instapundit.com

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Mort Zuckerman : sell now, buy in six months

Just saw an interview with Mort Zuckerman who seems to know a thing or two about Manhattan real estate. Asked about residential properties, his advice to buyers was to wait at least six months because he’s convinced that prices have still farther to fall. Conversely, he advised sellers to sell now because prices will only get worse in the coming year. So how do you get around this if you’re a seller and buyers aren’t buying? He didn’t say but I would think that the answer lies in cutting your price now, dramatically, so that buyers will feel protected if prices around them do continue to fall (which they will).  If your competitors are still holding out for 2006 prices and you’re down to 2003 or, better, 1999, you’ll stand out like a beacon, and buyers will appear.

Another point in a really low price – it will put the full power of Greenwich’s MLS behind you. Most agents I talk to are doing nothing these days (hey – they can’t or won’t blog). There’s nothing going on to excite their buyers and the agents are desperate to find something that will. If you, like 317 Stanwich, slash your price to the bone I guarantee you that every agent who isn’t brain dead (5? 10? Just kidding) will be emailing and calling their clients. They won’t be doing that for other listings.

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Time for Obama

On the cover for the 13th time in 52 weeks. Do you remember when we had a free press? The sad part? The press has thrown away its independence voluntarily. Booy, they’re gonna be sum hot when he doesn’t save the economy, the polar bears and those poor terrorists at Gitmo!


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I can’t understand large sums

But $650 million in tax payer funds for still more digital TV receivers I get – they steal my money, force me into debt to pay for my children’s education, so that someone else can watch tv undisturbed by a $40 charge. I am beginning to hate these people. Hate them. 

Not that I’m bitter or anything.

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Does this mean anything to you guys?

Clusterstock says that the fact that all the big banks are moving their earnings reports to this week suggests that something big (like nationalization of Citi or BOA or both) is going to happen this weekend Like Sergeant Schultz, I know nothing, but I’ll bet readers of this blog do.


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Why do builders do this?

They buy a building lot, get cold feet and relist it, always for more than they paid for it. A lot on Park Avenue Old Greenwich (40? 44?) sold to a local builder in August 2008 for $1.460 which even he now admits was a big boo boo. So he returns it to the market today but asks $1.675. A lot on Keoffram saw the same thing last summer, at a $500,000 increase and, perhaps dumbest of all, a builder bought land on Cat Rock for $1.5 million and put it back up for sale the same day at $3.0 million. Here’s a hint for builders: if you realize that you’ve made a mistake, don’t expect other builders to get you out of it, especially at a premium.

So far, anyway, none of these geniuses has committed the ultimate suicidal act: proceeding to go ahead and build when the land doesn’t sell. Billy Gardener did that up on Round Hill Road and now has a $25.0 million millstone around his neck, pulling him down. Other builders have done the same thing, on a lesser scale – it never seems to work out.


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44 Grahampton

A reader asked about this Surf & Turf listing and I told him it was on Clapboard Ridge. Well, Clapboard Ridge runs into Grahampton, so give me a break. Asking $5.995 since August. Good, large (7,000+ sf) house, nice pool and yard, good location. The owners paid $5.125 million for it in 2004 and spent a fair amount adding the pool and doing various renovations/improvements, then put it up for sale in October, 2007 for $6.995. The fact that I’d forgotten about it proves my point about over-pricing your listing: don’t do it. We see the place, dismiss it, and promise ourselves that we’ll revisit when the price drops. But then we don’t; other houses come on, inventory swells and ….. I really had no idea this place was still for sale, and that’s too bad, because at a million dollars less, it looks pretty good. Maybe not really, really good, but certainly worth considering.

UPDATE: CEA posted this comment on the original post but now that we’re writing about it here, …

That’s on Grahampton, near Beechcroft. Big house, backhard is narrow and overlooks the people behind. 0 outdoor privacy.

I knew there was something I didn’t like about it – privacy is expected at this price.


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Bad News – updated – good news!

U.S. Air jet down in the Hudson according to the WSJ (link’s not working – turn on your TV). I just put my Sarah on a U.S, Air flight to California l Monday morning – scary stuff.

Update: Flight from LaGuardia to North Carolina. Doesn’t look good.

UPDATE: My pessimism was unfounded. All passengers okay. That must be some pilot – good for him (or her – I don’t care who saves my bacon). Ran into geese, apparently. I should probably resume my hunting of those filfthy park-poopers.

neat picture of the plane in the river here. Amazing devices, these iPhones.

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Prices, Old Greenwich

7 Gisborne Place

7 Gisborne Place

This perfectly nice house near Innis Arden sold for $1.810 in 1999. The new owners completely renovated it and sold it again in 2007 for $2.860 million. It returned to the market last year at $3.095, failed to sell and today was reduced to $2.6 million. So there you have it.


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Earnings down 92%, Revenues drop 54%: raise salaries!

That’s what they did at Bernard Madoff Investments, the branch of Bernie’s empire ostensibly run by Peter and the boys. You might wonder how they could afford such largess which was apparently funded by Bernie’s Ponzi earnings but that’s because you were never taught never to look a gift horse in the mouth (no jokes about the Fabulous Noel Girls here, due to reader requests). Peter, Andy and Mark just pocketed their fattened paychecks, said, “thanks, Bern,” and went their separate wys – Peter to God knows where (and isn’t it time we found out?) Andy and Mark to go fishing. I don’t know – I certainly wanted to believe them when they said that wicked Bernie did all this mischief by himself but gosh, things are looking a bit skanky, aren’t they? I haven’t seen 21 Cherry Vally go on sale yet, but it’s only Thursday.

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On the Path to New Sweden

Waxman promises early action on global warming bunkum act. Okay, so why, if we all know that raising the cost of energy “sky high” as Obama has promised to do, and, shutting down all existing coal-powered energy plants, as he’s also promised to do, will crush what’s left of the economy, are big business types cheering Congress on, sitting shoulder-to-shoulder with Environmental nut jobs? It’s all about power, and money – what a surprise. As Congress usurps our economy and grabs for itself the sole right to determine who will succeed and who will fail, businessmen and businesswomen who want to stay in the game are caving. Here’s a secret – business types generally hate competition and will gladly vote to stifle it as long as it’s their competitors who go down and not they. Observe the manufacturers begging for re-regulation of railroads just last week – typical. Toy manufacturers cheered when Congress whooped through the “no-lead paint left behind” bill last fall because it puts out of business all cheap imports, all hand-crafted toys and even clears the used inventory from thrift stores. 

And so forth. If Duke power is supporting a carbon trading scheme you can bet your wallet it’s because Duke knows that it’ll make a billion bucks from the plan while its smaller competitors shut down. I never admired most of big business because I never trusted it to support free enterprise. I hate it when my suspicions are confirmed.

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“Say, you didn’t really come here to hunt bear, did you?”

That’s the punch line to a crude joke that circulated on Wall Street maybe 20 years ago. This is a family- safe blog so I can’t tell more than the punch line but it involved a man, purporting to be hunting bear, who has a series of humiliating things happen to him during his quest.

I was reminded of the joke this morning while speaking with Rick Loh, an agent with Surf & Turf whom I respect and admire. He said something like, “well sure, there’s tons of inventory, but most of those houses aren’t really for sale.” I absolutely agree with Rick, but I wonder how many of the owners know that that’s the market place’s reaction to their pricing? Perhaps not many.

Rick, by the way, had another observation, namely that, for houses that haven’t been renovated since their purchase, we’re back to 1999 price levels. I’d been saying 2003 (and before that, 2004) and the leap from 1999 to 2003 levels wasn’t as great as in later years, but that’s still a significant drop. Is he right? Well he suggests that I pull out an old sold book from 1999, look at the prices and see how many that I nod my head at and say, “yeah, that’s about what it should sell for today.” great idea and I’ll do it. My guess? He’s right.


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Off to open houses



Yup, there are still a few going on and I’m off to see the few new ones – retreads are on their own, so far as I’m concerned, until their prices drop. Speaking of which, here’s a picture to keep you occupied until my return: the Dow at 9:30(ish)

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Great new Riverside listing

No, not my listing, but the house belongs to friends of mine. 3 Marks Road, on the corner of Riverside Avenue, 3,000  5,000 – listing erred sf, beautifully renovated in 2002, waterviews of the creek (wave to me as I pass by) and asking around $3.1. There are recent comps to support that price and I think it’s a good one. Of course, I would, because what’s good around the corner can only be good for my own house, so take my opinion with a grain of salt, but I think this is good value. The nicest people in the world own it so if they’re moving, that’s a bummer. Say it ain’t so, Steve.

UPDATE: I saw it and it’s very nice. But, taking off my friendship hat and putting on my buyer’s rep  hat, I’d suggest that there’s some negotiating room here. But a very nice, 1913 house modernized, renovated and expanded. Good house if you want to live in Riverside.


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Letter from Patagonia?

Bernie Madoff flunky Sonja Kohn lost the Russian Mob’s money and now she’s in hiding. I’m speculating she’s in Patagonia because (a) it’s summer down there and (b) the Madoff boys probably told her how good the fly fishing is. But wherever she is, she sent an email to Bloomberg, protesting her innocence.

Kohn’s e-mail came from an address verified by a Bank Medici spokeswoman. Kohn said Madoff was “trusted by the best and smartest” and likened his scheme to a tsunami or earthquake that strikes “unpredictably and devastatingly.”..

…“The Madoff fraud destroyed lives, life savings and companies that were the result of decades of hard work,” she wrote. Madoff’s firm “was not an obscure hedge fund; it was a 48- year-old, highly visible firm with approximately 200 employees and over $600 million in capital,” she wrote.

Peter? Mark? Andy? Do you see that last part, where she’s referring to all those employees and capital? She’s talking about your firm, the one that didn’t know what Bernie was up to. Gosh, how could she get such a wrong impression, how could she think you guys were involved? Sure hope no one else made that mistake, or you could be sued!


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How to sell a house in a bad market

I can’t say which one because it’s only at the “accepted offer” phase but I just called the listing agent of a house whose huge price reduction I wrote about last week – I wanted to set up an appointment to show it tomorrow but too late. I’m not at all surprised – I emailed three of my own clients when this reduction came through and said, “bargain, in any market”. I wasn’t the only one to think so, obviously.

So the lesson is that, if you really want to sell your house, there are buyers out there, ready to act. But there has to be a price low enough (or realistic enough, take your pick) to stir them into action.


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We’re off to a fun start

8: 54 AM: I claim no powers of prediction but snow may not be the only thing falling today. This headline from Clusterstock tells the story:

JP Morgan (JPM) Posts Small Profit, Rally Fades Fast

Futures rise after bank reports an actual profit. That didn’t last long. Futures tanking.

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A sale! A sale!

There have been a handful, and 944 Lake Avenue (up near St. Barnabas) is one of them, closing January 8th for $3.975, not too far from its original 2005 asking price of $4.5 million. A nice Coggin’s colonial reproduction (that would mean low ceilings for you basketball players out there) set on very nice meadows, so someone has done well for themselves, but how about the seller? I’ll leave it to readers like CEA to do the math, but I can’t believe it was worth waiting 3 1/2 years to get this price when a lower price would have yielded cash sooner.

But hey, it’s their decision.


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“I don’t get it!”

71 Richmond Hill

71 Richmond Hill

That must be what the would-be seller is thinking now that his house has expired, unsold, for a second time. He first listed it for $4.050 back in March, 2003: expired. He tried again in July, 2008, asking $3.795: expired again.

It’s a perfectly nice 1994 house with a pool and good grounds. But there must be something wrong with it that causes it to fail to sell. What could that be? I have a hunch and I bet you do, too, but we’ll wait and see whether the owner figures it out for himself.

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