Daily Archives: February 17, 2009

The power of blogs

I feel a rising heat from Greenwich real estate agents and their managers because they blame this humble blog for ruining their fun – I’m “talking down the market” they say, and if I’d stop reporting negative news and put a sunny face of things buyers would still be willing to pay 2007 prices despite what they might otherwise hear about the national real estate market. Because Greenwich is different, or would be, if I wouldn’t spoil the party. 

Get a grip, fellas. This blog doesn’t cover real estate in Stamford, New Canaan or Darien yet those markets are as dead as ours. For that matter, England, Dubai and Spain aren’t doing so well either. Or  California, Arizona or Florida. What’s really got your knickers in knots is that your clients aren’t buying the line of bull s…. you’ve been feeding them and you don’t know what to do. Try telling them the truth – they can handle it. Or start your own blog of “Happy News” and send that to your clients – you’ll have them howling with laughter in no time.

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What is it about scam artists and helicopters?

Allan Stanford is headed to jail for an $8 billion bust. Here he is in better times.

 

Sir Allen arrives

Sir Allen arrives

 

 

Robert Brennan – First Jersey Securities – was king of the penny stock scams until he was fined $100 million and put in jail.

 

Have I got a stock for you!

Have I got a stock for you!

 

 

 

 

 Let’s see – any other scammers out there in helicopters? Oh yeah:

 

Oh Bam!

Oh Bam!

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Okay, here we go: apples to apples

272 Riverside Avenue

272 Riverside Avenue

This house, new construction, sold for $3.850 in January 2008. I’ve been curious what its present value is because I sold two other new ones (different builder) next door for $3.8 and $3.85, respectively, just a few months before. Today, this one came up for sale at $3.875, a token $25,000 more than it sold for 13 months ago. Will they get it? If not, how much has it dropped? Did I ever think I’d ask that last question about Riverside property? (No.) I’ll be watching with bated breath.

On the other hand, here’s a condo whose builder must have quit holding his breath a long time ago and is now just trying to get what he can for it. 292 Davis Avenue, a nice, free-standing “condo” (one of three units) has been for sale since January 2007 and originally asked $1.965 million. A beautifully detailed bit of construction but Davis Avenue is not yet ready to crowd out Field Point Circle or Round Hill Road as one of our premier addresses and that first price, in retrospect, was a tad aggressive. That is to say, no one wanted it. Today it came down to $1.125. If Walt and Monica are looking to downsize, they might choose this. And, fortunately for them, if even this is beyond their means, we do have public housing right up the street. But there’s a waiting list, Monica, so just as soon as you get back from Mustique, you may want to sign up.

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A Walter Client comes to Greenwich

Now that surprises me.

 

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Finally, Riverside takes its place in the sun

We’ve all been jealous down here, east of the Mianus and west of Long Meadow Creek.  Greenwich has Walt,Monica and the Fabulous Five, Old Greenwich has Mark Madoff and his former wife, even Cos Cob probably has some bit- player in the financial scams, but what about Riverside? When would it ever be our turn?

It looks like it may finally have arrived. According to the Financial Times (I’d credit a specific reader for the tip but “Chicken Little” doesn’t sound legitimate), Riverside’s own, Jay Levine, of  Dawn Harbor Lane, is at least peripherally involved with Royal Bank of Scotland’s failure (and Greenwich Capital, just to keep things local). And, get this, he’s a major contributor to Chris Dodd! Soooee!

A ROYAL BANK OF SCOTLAND executive who led its investments into “toxic” sub-prime loans was paid close to £40m in just three years, The Sunday Times can reveal.

Jay Levine, 47, was the bank’s highest-paid employee, earning almost four times more than former chief executive Sir Fred Goodwin.

Levine, who ran the group’s American investment bank RBS Greenwich Capital, received the bumper pay deals over 2005, 2006 and 2007, according to sources close to the bank.

His pay has never been disclosed since he was not a main-board director. The pay deals came as the bank ramped up its exposures to sub-prime mortgages, asset-backed securities and collateralised debt obligations (CDOs).

Levine, who lives in well-heeled Riverside, Connecticut, became co-head of Greenwich in 2000 after RBS acquired the business as part of its takeover of NatWest. In 2004 he was promoted to a larger role that also saw him head up corporate banking for the group across North America.

RBS has unveiled about £12 billion of write-downs since the credit crunch began and is poised to unveil full-year losses of up to £28 billion – the biggest loss in UK corporate history.

There are now six class-action lawsuits that have been filed against the group in the Southern District Court of New York, alleging that RBS misled investors on the true state of its accounts in a series of filings with the US Securities and Exchange Commission (SEC).

One of the lawsuits details how the bank’s exposures to CDOs ballooned from 2005 onwards. The filing, lodged under the name Gary Kosseff, quotes an SEC document in which RBS said that 76% of its £5.9 billion CDO portfolio had been acquired since 2006.

Levine announced he was retiring from RBS in December 2007, but has since been appointed chief executive of Capmark Financial, a lender specialising in commercial real estate.

Levine has donated thousands of dollars to the US Democrats over the past three years. Some of his biggest donations have gone to Chris Dodd, the head of the US Senate’s banking committee. He also supported former New York mayor Rudy Giuliani, a Republican, in his presidential campaign.

And Levine was on the board of a financial lobby group that sued the state of Connecticut over new laws that would force political donors to disclose donations made through spouses or children.

Are you asking yourself, can even a rich Democrat afford to live in “well-heeled Riverside” if Chris Dodd’s got his snout in the poor guy’s pants? Fret not. The town values Mr. Levine’s house at $9 million, which is okay, I suppose, but this Riverside non-waterfront looks a little low-brow  for a man who made off with $40 million. Then again, there are those Dodd payments to consider.  

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Before December 12, this would have seemed like a big deal

Stanford Securities raided, shut down: $8 billion missing from Antigua. How far is Mustique from Antigua?

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The end of the world will look like this

Starbucks rolling out instant coffee.

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Your Stimulus on Brains (warning: graphic gore)

dow-stimulus

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RBS cuts bonuses 90%

No cash for Royal Bank of Scotland folks, now that the government owns them. Does this include our local friends at Greenwich Capital? If so, we’ll hear the howls from Steamboat Road. Either way, how’s that RBS headquarters in Stamford doing? For that matter, is Trump’s apartment project tied to his casino bankruptcy? Interesting times all around.

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Go for a bargain, but don’t be silly

I heard of a would-be buyer who recently called his agent, furious that his low ball bid, $700,000 lower (33%) than the asking price, had been rejected. Considering that the house’s price had already been cut almost in half and is now what I would consider to be a real bargain, in any market, I’m not surprised that the seller rejected the bid.

And there’s nothing particularly wrong with the buyer testing the waters, even if, in my opinion, he was passing up a good deal. His mistake was in getting angry. Try what you want, toss out whatever low bid you want, but don’t let it get personal. If it were personal, you’d be looking for a house that you really wanted and making a reasonable offer. A riduculously low offer tells me, at least, that you’re making a business decision. That’s fine, but if it doesn’t work out, go on to the next one. And don’t whine that the seller’s been mean to you.

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Testing Old Greenwich price levels

16 Benjamin Street was new construction when it sold in 2006 for $4.365 million, which far outdistanced the previous record for that street of $2.863 mil. Now the buyers have put it up for sale again, this time for $4.395 million. I appreciate their restraint, but I suspect that 2006 saw the high water mark for prices for the time being. In which case, this one will struggle. We’ll see.

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Even from the darkest cloud, a little sunshine peeks

Thanks to a reader’s tip, we learn that Walt and Monica are back in Mustique! The kids had to stay home, poor dears, no doubt busy with preparing the New York/Greenwich real estate portfolio for sale. But we’ll all sleep better tonight, I’m sure, knowing that thanks to the judge refusing to freeze Noel’s assets, the old guy can still jet down to the islands for a little R&R. He’s had a tough couple of months and deserves a break.

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504 North Street drops again

Can we bring this one back?

Can we bring this one back?

This once-new monster that replaced the old pink “Bermuda” house on the corner of Dingletown was listed for $12.960 million in June 2007. It’s been dropping ever since, trying to find a buyer and today came down to 70% of that original price, or $8.995. Interesting. Update: the land was bought in 2004 for $3.5 million. That’s a lot to carry for five years. At 17,000 sf, the new asking price is $529 sf – probably less than the builder hoped for.

On a lower scale, 105 Hamilton Avenue, one of the condos that were new in 2002 and sold then for $835,000 is priced today at $1.250 million. The MLS records tell two different tales for this same unit but it either sold for $1.265 in June 2006 or $1.367 in November 2005. Take your pick, the seller is losing money. Back in 2002 I was astonished that a builder would build expensive condominiums at this location and then was even more surprised when they sold out. It now looks as though location will have the final say after all.

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Cheap condos but no utilities?

A writer at Clusterstock was thinking aloud about jetting down to Miami and picking up a condo for $37,000. That’s cheap. But he was reminded of a problem: if your neighbors don’t pay maintenance, the city can cut off your building’s water. That’s bad for resale value.

This is a problem I’ve raised before about small condo projects here in Greenwich. My fears have been poo-pooed by people who sound like they know more than I do (easy) but still: if you have, say, a unit in a two – unit condo and your neighbor loses her job just when the roof fails, what do you do?

Just asking.

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More price reductions

16 Stillman Lane, an excellent, well built house, hasn’t sold in a year priced at $5.850 million so today it’s dropped to $4.950.

And 18 Bowman, new construction on the western side of town, was first offered for $2.685 million in February 2007. It wasn’t able to overcome a triple handicap – back lot, water tower looming overhead and an adjacent graveyard – at that price so today it’s marked down to $1.795. It’s a good looking house inside and at some price a buyer will like it. But you have to wonder where the builder’s break-even point is.

Which raises another question: how much profit was built into these spec houses to begin with?  All these million dollar reductions raise the implication that the original price was a rip off. I’m a firm believer in charging what the market will bear but buyers seem to take these price manipulations personally. Those spec houses that came on in the 9’s last spring and dropped almost immediately into the 5s, for example, did other builders no favors.

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Well here’s an optimist

41 Will Merry Lane took forever to sell some years ago but finally, after it’s price yo- yoed up and own all over the place, found a buyer in March ’07 for $1.425. Those people did some renovations and have put it back up for sale today at $1.975 million.

This may work out for them but it seems that these days, the “buy it, fix it up, make a profit” plan doesn’t pay the return it used to. My advice to people contemplating fixing up their homes is to do it if they plan to stay in it long enough to enjoy it. Otherwise, save your money.

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Conyers Farm – 1997 prices, coming up (or down)

19 Lower Cross Rd

19 Lower Cross Rd

This Conyer Farm house, sold in a bidding war (I think – list price was $11.9) for $12.2 million in February, 1997. The buyers placed it back up for sale in 2006 asking $18.5 million and today, three years later, have reduced it to $13.5. So okay, it’s not quite back to where it started 12 years ago, but it’s certainly getting there.

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Mad Monkey Spotted in Stamford?

I certainly hope not because if it was him, his house is now available  (but what price will his estate demand for it?)

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Furious Poor folks outraged at budget cuts

Old ladies in New York City are banding together, demanding that Wall Street get its act together and get rich again so they can be taxed for the benefit of old ladies.

Well no, the poor dears haven’t quite figured out cause and effect, but they’re distressed that they aren’t getting an automatic “pay raise” this year and have at least detected that Wall Street, the source of the money that used to support them, is in trouble. Right now, the solution they see is to tax what’s left and give it to them but I’m hopeful that California’s collapse today may give a hint why that idea doesn’t work. Hopeful, but not counting on it.

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