Daily Archives: February 23, 2009

Is there a correlation between this statistic and home prices?

Take-out beer sales fell 14% last quarter. I’m sure someone’s tracked the performance of beer consumption, the DJI and home sales, but I can’t find it.

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Stimulating Gaza

$900 million of our money will go to rebuild Gaza so that those happy folks can send more rockets into Israel and get trashed again. Well why not? The Stimulus bill proved, again, the contempt with which Congress views us taxpayers, so why not soak us for more?

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Seller price guarantees?

Hyundai is offering car buyers a guarantee that should the buyer lose his job he can return the car within a year and be relieved of further obligation under his lease (or some thing like that – check with a Hyundai dealer if you’re interested). Toll Brothers offers something similar: lose your job and they’ll pay your mortgage for 6 months. The object of these offers, of course, is to try to reduce a consumer’s doubt and uncertainty about the future.

Which might work. I know several spec builders here in Greenwich who are trying the same sort of thing. Worried that if you buy their house now you’ll lose when its price drops 40% in the next few years? Fret not, they say, we’ll guarantee to buy back the house in 5 years for what you paid for it. I’m interested, sort of, but so far as I could tell they hadn’t exactly fleshed out the details of their promise like, what backs it up? One builder assured me that there was no need for a bond or any thing like that because “of course the market will recover – no way will anyone be willing to sell this back to me in five years because it will be worth so much more.” That’s nice but I’m not sold.

The personal promise of a builder isn’t going to keep me asleep at night – not when there’s no money available for him to borrow to buy out my customer. And as for bonds, aren’t most of them sold through AIG? That company may not be in business in five weeks, let alone five years. I suppose a builder could come up with some iron-clad guarantee that might work but I’m still dubious about buying his house at his inflated price. Even if my customer were to break even, I think he’d do better buying a new spec house at a hugely discounted price, perhaps from a bank. That way, if the market does continue to fall, he’ll have already secured his protection and if by some miracle prices rise the appreciation will belong to him, not the builder.


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Low end houses

I get this complaint frequently and my answer’s about the same as my blogger friend John Schneider in Tucson but since he just said it on his blog, I thought I’d steal it.

February 20, 2009

… your blog focuses on high-end homes, while pretty much ignoring lower priced homes

why is that, a reader asked.

-because most of my clients are at the high end, or the mid to high end anyway, and since that’s my market I try to address it

-because the high end of the market is burdened with a high inventory of overpriced homes and saddled with slow sales. 
And relatively speaking, the low to mid price range is doing OK so, for that reason alone, the high end is more interesting and more in need of a good dose of reality too- which is what I try to bring to the party

-because I frequently write about spec homes and all the spec homes in the Foothills are at the high-end

-because most of the homes in gated communities, and there are many gated communities in the Foothills, are high end homes,

-because I come across more wheeling & dealing & shenanigans at the high end than at the other end, and that’s more interesting than nice tidy stories about Bob and Jane selling their $400k home.

-because generally homes at the high end are more interesting to look at, if only because there’s more to them, and therefore to write about than homes at the low end.

-and because, I suppose, I just prefer to write about high end homes

And maybe it’s because when I started in real estate in 2001, my first few transactions were for high end homes. I used to do a lot of open houses in those days, at least two, and often three a week – Wednesdays, Saturdays and Sundays. I thought that was a good way to meet buyers and see what was on their minds.

And I ended up doing quite a bit of high end business from those open houses. And since then I haven’t been able to kick the habit.

I might add that here in Greenwich where even tear-down chicken coops are priced high enough to qualify as high end in other parts of our country, financial hi-jinks and other interesting things happen to them, too. And I report those as I hear of them.

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Green nonsense

This eco- realty silliness has spread to Tucson. John Schneider writes in his own blog, Tucson Foothills:

going green

It’s getting really tiring. Between the NAR and the local real estate schools we’re bombarded with ads to ‘go green’ and take the NAR’s Green Designation course.

Saving energy and building and selling more energy efficient homes, and learning the ropes in the green arena would seem to be a good thing for all.

Except that I’ve seen just one home for sale in the Foothills with a certified green designation. I think it was a LEED gold level home, the tippy-top in the green world. And it was beautifully done, a great renovation and a beautiful home that had the added advantage of being a home that was much less expensive to heat, cool and boil your tea in than a traditional home. Much less expensive.

But that home sat on the market forever and a day and, ended up selling for way less than the much reduced list price and, well under what the owner had put into it. About $300K under.

And I met the owner and talked with her, and admired what she’d done, green or otherwise, but given what it had cost her to attain that LEED designation, no buyers were interested.

Going green is so far down on the must-do list for residential real estate as to be virtually non-existent.

Yet despite what I’m sure are noble intentions, what else could it be, the NAR and the local real estate schools fail to take market conditions into account, and relentlessly press their agenda.

Give it up guys, it has the familiar ring of that well-worn NAR chant-
Now is a great time to buy or sell a home. 
No kidding, thanks for the advice.

I certainly don’t think it’s wise to waste money on energy when instead you can make your home weathertight, but if it doesn’t make economic sense, don’t do it. And spending a large premium on a so-called “green” house doesn’t make economic sense. Nor, for that matter, does it make sense for an agent to waste her time getting a “Green-Realtor” designation when the information she might need to provide intelligent advice on the subject is readily available free and on line. Like everything else the NAR peddles, this latest certification program is just another way for know-nothing idiots to look smarter than they are.


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Attention Techies

dow-23Does something bad happen if the index drops below 7,000, as it appears to headed? I know that techs love discussing floors and that sort of stuff but I don’t know whether 7,000 is such a floor. I’ll bet some of you guys do.

Just curious what tomorrow may bring.


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25% Off

F Troop Barracks?

F Troop Barracks?

This place up at 306 Taconic started at $3.650 million in May of last year and dropped to $2.750 today. A 25% reduction seems to be the new 5% although so far, it’s not helping much. Still, at four acres, we seem to be approaching what raw land itself was once worth. “Once’ being the operative word.


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Why can’t people learn to apologize?

Some dumb Senator shot off his mouth over the weekend and predicted in a speech that Justice Ginsburg will be dead in nine months “because she has cancer. The bad kind of cancer that you don’t get better from”.

The old pol may be right but he’s certainly not God and had no business, as a public figure, speculating on the fate of another human being. This was apparently drummed into his thick skull so today he issued the following “apology”:

“I apologize if my comments offended Justice Ginsburg,” Bunning, a Kentucky Republican, said in a statement released by his office. “That certainly was not my intent. It is great to see her back at the Supreme Court today and I hope she recovers quickly. My thoughts and prayers are with her and her family.”

Look: of course his statement offended the woman and probably a lot of other people, including me. Yet all these public apologies always come with the disclaimer, “if I offended”…. What’s so hard about saying something along the lines of, “I said something stupid, I offended the person, and I’m sorry”?

So if anything I’ve posted here has offended you, I’m sorry.


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Two Newspapers in one!

More money from trading fees gives banks a good start

Bank shares drive down market

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After 885 days, 59% of asking price

10 Shelter Drive, Cos Cob, was listed for $2,993,100 (?) in September, 2006. It finally sold today for $1,762,500. That’s a hideously long time to have your life disrupted, your house kept in showing condition and your move to a preferred location delayed, all to get such a small percentage of your first asking price. Why do it?

Yet sellers are still at it. A house came on today for $3.595 million, quite a bit more than the $1.895 million the seller paid for it in 1999. Other than two new water heaters and the passage of time, there’s no indication on the listing that anything of value has been added to this house.

If the pricing isn’t completely blind to current market conditions, how about trying to go cheap? Another listing today seeks $2.850 million, less than two years after the seller paid $2.675 for it. That’s fine, but if you’re reaching for a couple of hundred thousand dollars, must you really exclude the dining room chandelier or, worse still, insist that “flat screen TV in Fm Rm is negotiable”? My advice in this market is to install flat screen TVs and chandeliers in every room a buyer wants them and give them to him free. I suppose a chandelier can be expensive (though someone just told me of paying $1,100 for one in a going out of business sale on the Avenue, marked down from $11,000) but how much can a TV cost? Don’t be silly.


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Dividends drop, stock value disappears

S&P still too high, once loss of dividends is figured in. Funny thing: the pols are stressing how much they’re going to punish Wall Street with new taxes and regulations, and the market’s tanking – down 170 points today and still falling. How can this be? We need new laws to force these greedy bastards to produce!

Atlas Shrugged looks more prescient each day.

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Here’s another brilliant idea brought to you by Hartford

So Greenwich became the hedge fund capital of the east coast and income taxes from this small town pay 11% of the state’s budget. Hartford has a problem with that first part so wants to impose new regulations on the funds, as designed by financial mavens from such towns as Shelton, Derby and Norwich.

Among the bills’ proposals are requirements for hedge funds to get a state license, independent financial audits, fee disclosures and changes in management or management strategy, as well as barring individual investors with less than $2.5 million in assets, or institutions with less than $5 million, from investing in hedge funds.

Who cares if the funds move? We’ll always have casinos, right? And conveyance taxes from Greenwich generated when its citizens pull up stakes. Remember, for politicians, nothing is more important than our children’s future. Or a politican’s future, whichever comes first.


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Hey hey, Meet the Monkees!

monkeesOne of them, anyway: Pope names Dolan New York ArchBishop.


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Condo sale

Here’s a snapshot of the Greenwich condo market from 2003 til now, at least for this two-bedroom unit at 15 Palmer Street in Cos Cob. It sold for $350,000 in August ’03, sold again four months later (those were the days) for $545,000, down just a hair from its asking price of $548,000. It came back on in April 2007 asking $695,000 and finally sold last Friday, almost two years later, for $575,000. So what went up, went down. Will the next sale be $350,000? I hope not.

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Odd moments in real estate pricing

So let’s say that back in 2005, you renovate a house in a geographically challenged location in Cos Cob and list if for $1.850 million. It doesn’t sell, even though you drop its price (slowly) to $1.565 and the listing eventually expires. You blame your broker, of course, and use a new agent a few months later to return it to $1.850. Surprisingly, that doesn’t work out so well so you yank the listing in April, 2007. This past November you try again, this time representing yourself, and you know better than the previous two fools: you list it for $2.2 million. And once again, to your great consternation and utter confusion, buyers refuse to recognize the teriffic value you are offering. Today, you mark it down to $1.699, $134,000 more than it wouldn’t sell for in 2005, but that was a different market, wasn’t it?

Yes it was.


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Phone calls I haven’t made

I received the following email from the Demmerkrats today. Love the part where, because of the Stimulus Bill, “2 million Americans will be lifted from poverty”. I seem to remember something similar promised about LBJ’s War on Poverty. How’s that working out, a zillion trillion dollars later?

Mitch Stewart, BarackObama.com

chris —

President Obama launched the most ambitious effort to stimulate the economy in our nation’s history when he signed the American Recovery and Reinvestment Act on Tuesday.

Your representatives need to hear from you when they vote for the change you mandated in November. Doing what’s right can be thankless when the culture of Washington tries to make political games out of the issues that matter to everyday Americans.

Rep. Jim Himes, Sen. Christopher Dodd, and Sen. Joseph Lieberman’s votes were crucial to passing the bill and creating and saving jobs in Connecticut.

Can you pick up the phone right now to thank Rep. Himes, Sen. Dodd, and Sen. Lieberman?

Rep. Jim Himes

Sen. Christopher Dodd

Sen. Joseph Lieberman

Report your call.

Here are some suggested talking points for your call:

– I’m calling to thank [Congress member’s name] for supporting the American Recovery and Reinvestment Act.
– I’ll be watching closely online and in the news how taxpayers’ money is spent in the implementation of this Act.
– I encourage [Congress member’s name] to continue working with President Obama to lift America out of this economic crisis.

We still have a long way to go, but working together we were able to take this important first step.

With the plan in place, more than 2 million people will be lifted out of poverty, 20 million at risk of losing their health care will be protected, and 3.5 million jobs will be created or saved.

There will be plenty more ways for you to contribute in the weeks and months ahead.

Thank you for your continued support,


Mitch Stewart
Organizing for America

Paid for by Organizing for America, a project of the Democratic National Committee — 430 South Capitol Street SE, Washington, D.C. 20003. This communication is not authorized by any candidate or candidate’s committee.


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15 Hilltop Rd

15 Hilltop Rd

This 1942 Cape has been reduced to $479,000 and “invites all offers”. It’s an estate sale and is described as a “handyman’s special” which is usually realtor-speak for tear-down but at the right price and in the hands of someone with unoccupied time and carpentry skills, I’d think a reasonable value could be derived from it.


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Transportation Values

A commentator touts the Mercedes AMG 65 as the way to go in wheels but at $185,000 base price, I think I’ll give it a pass. Best buy I ever made in this field was a 1956 BMW one-cylinder 250cc motorcycle. I bought it in Zurich in 1972 for, I think, about $100, drove it all through the Alps and eventually sold it in Amsterdam for $150 when my long suffering father refused to send money to ship it home. He made a mistake. Mine was in excellent shape – the one pictured below, in much worse shape, is advertised in England for $3,000.00. Oh well – my father also sold his Brownstone at 233 W. 11th Street when he moved the family to Greenwich in 1954.

1956 BMW 250 cc

1956 BMW 250 cc


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Jobless recovery predicted by Bernake

No new jobs for awhile, he is reported to be prepared to tell Congress. Some in Congress are hopping mad – they passed a law saying this couldn’t happen, Goddammit!

The Federal Reserve chairman, delivering semiannual testimony required in legislation written by the late lawmakers, will describe a U.S. economy returning to growth next year without generating many new jobs. Even with credit markets thawing, Fed officials see unemployment persisting at 8 percent or higher through the final three months of 2010.

A recovery with slow job growth would keep pressure on the Fed to hold interest rates around zero and to continue or expand billions of dollars in lending programs and asset purchases. It would also mark a failure to fulfill the mandate of the Humphrey-Hawkins Full Employment and Balanced Growth Act, signed into law by President Jimmy Carter on Oct. 27, 1978, that the central bank achieve both maximum employment and stable prices.

“We’ve got a lot to talk about,” says Representative Maxine Waters.


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Finally, some hope for suffering Mercedes owners

Diesel Mercedes owners, at any rate. The collapse of world trade has meant a big drop in demand for diesel fuel and it’s expected to drop below the price of gasoline soon. My poor little brother Gideon has been paying something like $120 gallon to fuel his Mercedes – perhaps now he’ll be able to afford that long-overdue birthday gift he owes.

Cleveland, Duble & Arnold Welcome Wagon

Cleveland, Duble & Arnold Welcome Wagon


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