Daily Archives: February 25, 2009

Ah, but the election’s over!

Reader Kidding Really sends this link to a wonderful video of Democrat pols defending Franklin Reins, Fannie Mae and Freddie Mac and denouncing as a witch hunt Republican attempts to regulate them. From 2004.

1 Comment

Filed under Uncategorized

Are Paul Greenwood and Stephen Walsh our latest Greenwich Wall Street scam celebrities?

They’re coming fast and furious, even if this one involves just a piddling $550 million.

NEW YORK — Two New York fund managers were arrested on charges they misappropriated $550 million, alleging they used funds invested by charities, university foundations and pension plans to finance their luxurious lifestyles.

Paul Greenwood, 61 years old, and Stephen Walsh, 64, were charged with conspiracy, securities fraud and wire fraud. The men were principals of a broker dealer called WG Trading Co. LP, with offices in Connecticut, New Jersey and New York.

Update: False alarm – offices at Lafayette Court but Greenwood’s from North Salem, Walsh from somewhere else. Our homies are going to have to try harder.

3 Comments

Filed under Uncategorized

$634 billion in new taxes on the rich

Health care for all, and we’re just beginning to have fun!

Comments Off on $634 billion in new taxes on the rich

Filed under Uncategorized

Real estate blogging

I just heard an earful from an angry builder, upset that my negative tone was hurtful and, more important, hurting sales of spec houses. I don’t take responsibility for the collapse of sales here in Greenwich – the economy is doing a fine job of that all on its own – but I did decide to take a jaunt around the internet to see what other real estate bloggers are doing in writing about this awful market, in case they’d figured out a tone that, while accurately reporting what was going on, maintained some semblance of cheer. Fat chance. Turns out, they’re doing just about what you’d expect from a real estate agent, and that’s not what I want to do with this blog.

Here’s the Buckhead Blog, from Georgia.

Buckhead home with details

Here is your opportunity to own a home in a vibrant and social Buckhead neighborhood.
You’ll be a short walk to the exclusive Streets of Buckhead which will rival Madison Avenue
and Rodeo Drive for shopping and dining.

Buckhead Forest children attend the sought-after Sarah Smith Elementary which is one of the top public schools in the Georgia.

The property has been renovated and updated by some of the best craftsmen in Atlanta. When getting the mail or walking your dog, people will stop their cars to compliment your beautiful landscaping and the great curb-appeal of your home. You’ll anticipate the seasonal changes in the professionally landscaped yard as the spring will bring azaleas and hundreds of multiplying daffodils. The summer and fall will have long-blooming hydrangeas and other colorful perennials. Here are some more pictures and details.

Tulsa’s no better. 

Do you Know why you should know what your home is work?
If not here are the answers to both questions.
Here’s one I will bet you have never checked on – are you being over taxed on your property. Did you know if the county over evaluates you homes worth you can challenge it and get your property taxes reduced.
If you do not know what your home is really worth – – How do you know if you are properly insured encase a disaster strikes like a fire, interior Waterline break, Tornado, hail storm or anything else.
It is free and easy to check on what your home is worth Just call me I will be happy to do a Competitive Market analysis on your home – Knowing you are not even thinking of selling. I think this is part of my professional service and community responsibility. Who knows you may appreciate it enough to refer me to someone that is ready to buy or sell a home.

And this one from Philadelphia insists that we’re all being fed a line of crap and that real estate prices have in fact fallen only o.o3%.

Etc. So I’m not going that way. If builders think I’m gloating over their misfortune, then I’m sorry, because I’m not. And angry home sellers (my caller assures me there are dozens, all angry at me) should know, as I’ve mentioned, that my own family’s real estate is doing no better than theirs. What I’m trying to do is report on current conditions. If you don’t like those conditions well, neither do I. But they are what they are. Get over it.

6 Comments

Filed under Uncategorized

Octomother blames recession for people’s negative impression of her

It couldn’t be because taxpayers don’t like supporting an unwed mother of six who has eight more children, could it? Nah, says Mom.

1 Comment

Filed under Uncategorized

Buying the most expensive house on the street

John Schneider, my friend in Tucson, thinks it’s a poor idea and his reasons seem as applicable here as they do out west.

11 Comments

Filed under Uncategorized

Which is why Social Security and Medicare spending is off the table and Chris Dodd and Charlie Rangel are still sitting at it

From an email sent to me today by our president, Barack Obama:

But to set our country on a new course of stability and prosperity, we must reject the old ways of doing business in Washington. We can no longer tolerate fiscal deficits and runaway spending while deferring the consequences to future generations.

Watch some key moments from my address now:

http://my.barackobama.com/presidentialaddress

Central to this plan will be a renewed commitment to honesty and transparency in government. Restoring our country’s economic health will only happen when ordinary citizens are given the opportunity to hold their representatives fully accountable for the decisions they make.

I look forward to continuing to work with you as we bring about the change you made possible.

Thank you,

President Barack Obama

The man’s made my day.

Comments Off on Which is why Social Security and Medicare spending is off the table and Chris Dodd and Charlie Rangel are still sitting at it

Filed under Uncategorized

Market results, predictions from Realogy

The parent of Century 21, Sotheby’s and Coldwell Banker is out with its latest 10K. Understand that I am not picking on Realogy here – I doubt any other firm is doing much better, if at all. But as the largest franchiser of real estate brokerage firms, its data provides the best over view of what’s going on.

I’ll start with the conclusion because it sums up as well as anything I’ve read the current uncertainty of where the market’s headed and when, or if, it will recover.

We believe that long-term demand for housing and the growth of our industry is primarily driven by affordability, the economic health of the domestic economy, positive demographic trends such as population growth, increasing home ownership rates, interest rate trends and locally based dynamics such as housing demand relative to housing supply. Although we see improvement in affordability and a slight lessening in the overhang of housing inventory, we are not certain when credit markets and the job market will return to a more normal state or the general economy will improve. Consequently, we cannot predict when the market and related economic forces will return the residential real estate industry to a growth period.

Highlights from the report include:

Homesales

During the first half of this decade, based on information published by NAR, existing homesales volumes have risen to their highest levels in history. That growth rate reversed in 2006 and continued to decline through 2008 as reflected in the table below. Our recent financial results confirm that this negative trend continued into 2008 as evidenced by homesale side declines in our Real Estate Franchise Services and Company Owned Real Estate Brokerage Services businesses which for the year ended December 31, 2008 experienced closed homesale side decreases of (18%) and (16%), respectively, compared to the year ended December 31, 2007.
                                       2008 vs. 2007              2007 vs. 2006           2006 vs. 2005
Number of Homesales
Industry
NAR                                              (13 %)(a)                  (13 %)                   (9 %)
FNMA                                             (13 %)(a)                  (13 %)                   (9 %)
Realogy
Real Estate Franchise Services                   (18 %)                     (19 %)                  (18 %)
Company Owned Real Estate
Brokerage Services                               (16 %)                     (17 %)                  (17 %)
Existing homesale volume was reported by NAR to be approximately 4.9 million homes for 2008 compared to 5.7 million homes for 2007, which was down from 6.5 million homes in 2006 versus the high of 7.1 million homes in 2005. Our recent financial results confirm this trend as evidenced by our homesale side declines in our Real Estate Franchise Services and Company Owned Real Estate Brokerage Services businesses.
Homesale Price
Based upon information published by NAR, the national median price of existing homes increased from 2001 to 2005 at a compound annual growth rate, or CAGR, of 7.3% compared to a CAGR of 3.0% from 1972 to 2000. According to NAR, the rate of increase slowed significantly in 2006 and declined for the first time since 1972 in 2007 and 2008 as reflected in the table below. Our recent financial results confirm that this declining pricing trend continued into 2008 as evidenced by homesale price declines in our Real Estate Franchise Services and Company Owned Real Estate Brokerage Services businesses which for the year ended December 31, 2008 experienced average closed homesale price decreases of (7%) and (10%), respectively, compared to the year ended December 31, 2007. Furthermore, the decrease in average homesale price for the Company Owned Real Estate Brokerage Services segment is also being impacted by a shift in the mix and volume of its overall homesale activity from higher price point areas to lower price point areas as well as an increase in REO activities.
                                       2008 vs. 2007              2007 vs. 2006           2006 vs. 2005
Price of Homes
Industry
NAR                                               (9 %)(a)                   (1 %)                    1 %
FNMA                                              (9 %)(a)                   (1 %)                    1 %
Realogy
Real Estate Franchise Services                    (7 %)                      (1 %)                    3 %
Company Owned Real Estate
Brokerage Services                               (10 %)                       8 %                     5 %
Update: Loss of $1.9 billion for the year. Ouch.
UPDATE II: Apollo to support Realogy with more money. Which is only fair, since it was Apollo who piled all that junk debt on Realogy to begin with.

Comments Off on Market results, predictions from Realogy

Filed under Uncategorized

Barney Frank is a load

barney-frankMr. Frank is in high dudgeon over Northern Trust spending money entertaining clients at a golf outing and has demanded that the money expended therefor be returned to the U.S. Treasurer. Fair enough, but I wondered how careful Frank is himself when it comes to junkets on my dime. I looked and voila, here’s a peek at the man’s own travels.  Here, for instance, are just a few of his most recent trips in 2008 and 2007 (follow list for full list).

NYC – Gay Lesbian reception

Princeton University

London, Hamburg

Chicago

NYC – Gay Rights

LA – Bill Mahr Show

Jacksonville FL (in Feb,, of course) “Sub prime mtg conf.”

NYC – More gay rights

Franfurt and Berlin, Germany – International Red Cross

Nashville, TN – Insurance

Tampa, Fl – gay rights reception and fund raiser

NYC – paid speaking engagement, Deutsche Bank

Etc.

6 Comments

Filed under Uncategorized

Market developments today, Feb. 25th

As of 2:30, 0 contracts, 25 price reductions, and one sale from a contract several months ago. The sale was for land at 25 Richmond Hill Road, priced at $2.195 and on the market since July, 2007. It finally sold for $1.6, which really isn’t so bad for the seller. Its time on the market is more a reflection of the dearth of home-building buyers these days, I think, rather than a crazy original price.

Reductions include 16 Dingletown Road, new construction, $8.995 million when first listed. Today it’s $7.850 million. 

502 Cognewaugh, listed at $6.995 since June, 2007 finally dropped a million and is now $5.995.

27 Vineyard Lane, land off of Zaccheus Mead, started at $4.995 million and is now $3.495

15 Old Orchard, a new spec house abandoned by its owner to the banks has dropped from $1.995 million to $1.295. It’s unfinished and even its builder estimates it will cost $300-$400,000 to finish, so I don’t think buyers will find this new price attractive.

8 Tulip, on the other hand, is a newish house, originally $835,000, now marked down to $699. With a little negotiation, this might be an attractive deal.

And finally, just for a reality check, there is 31 North Porchuck Road, which sold as new construction in August, 2007 for $7.850 million. It’s back on the market today for just $6.995 million. That was an expensive rent for 18 months.

10 Comments

Filed under Uncategorized

Nice try but …

15 Wynnwood

15 Wynnwood

This beautiful, brand-new house on Wynnwood (off Clapboard near Lake) was just reduced from $8.650 million to $7.895 million. That’s probably a fair price but speaking for the vulture buyers I’m working with, not enough of a price reduction to stir them to action in this market. They, and I, are looking at the market, seeing what isn’t selling – practically everything – know that a far more expensive spec house is going to go the short sale route soon, and, also observing that this builder has an even larger new house next door that isn’t selling for $10 million, figure to wait him out. And if not him, then some other builder. Today, price is king, followed, I believe, by location and quality of land. This house has top scores in two of those three categories but if something else comes along that’s inferior in every way except price, I think the vultures will pick that one off first.

That’s just my report from the trenchs based on working with a handful of buyers. Other buyers may well feel differently and certainly this is a very nice house, so it could well move at this price. Just not with my customers.

5 Comments

Filed under Uncategorized

Important public service announcement for Greenwich readers

Where are the best white collar havens? Slate offers some tips. For plain vanilla tax evasion, it’s a cinch – Switzerland. Nice mountains, decent cheese and great chocolate – just ask Marc Rich. But those blessed Swiss don’t consider tax evasion (at least, when done against the US Treasury) a crime, so you’ll be safe from extradition. More serious stuff like Ponzi schemes (Walter) leave you no good choices because if a country will have you, you probably don’t want to go there. The countries without mutual extradition treaties with the United States are awful places like North Korea, Cuba and that sort of place – no toilet paper, obnoxious police and forget about getting decent cable reception. Russia is said to offer shelter but considering what they do to anyone Putin wants to rip off (can you spell Siberia?), you probably don’t want to go there with a lot of cash and they probably won’t let you in if you don’t. Bummer.

I’d suggest, as the best of a bad lot, Libyia or Afghanistan. The latter may have treaties with us, but who’ll ever find you in those mountain caves? Seen Osama lately? Good luck.

9 Comments

Filed under Uncategorized

Mexican standoff

I’m sure that’s no longer the politically correct term, but the story is, sales of existing homes plunge as buyers, sellers wait each other out.

Feb. 25 (Bloomberg) — Sales of U.S. previously owned homes unexpectedly fell in January as plunging prices no longer attracted buyers ahead of the Obama administration’s stimulus plans.

Purchases fell 5.3 percent to an annual rate of 4.49 million, the fewest since 1997, from 4.74 million in December, the National Association of Realtors said today in Washington. The median price dropped 15 percent from a year ago, and distressed properties accounted for 45 percent of all sales.

Americans may have been waiting for details of President Barack Obama’s plans aimed at stemming foreclosures and declining home vales that are at the core of the economic slump, the group said. The housing slump is likely to deepen as concern that record foreclosures will bring prices down even more and a lack of credit keep prospective buyers at bay.

Home sales have been falling since 2005 and prices peaked in 2006. The S&P/Case-Shiller home-price index of 20 metropolitan cities was down 18.5 percent in December from a year earlier, a record decline, the group said yesterday.

Foreclosures

Prices are likely to keep falling. Home foreclosures were up 17.8 percent in January from a year earlier, according to RealtyTrac Inc., an Irvine, California-based seller of default data. A total of 274,399 properties got a default or auction notice or were seized by banks, the 10th straight month that foreclosures topped 250,000.

The competition from distressed sales is hurting builders. Standard Pacific Corp., based in Irvine, California, reported its ninth straight quarterly loss on Feb. 13. New home deliveries fell 47 percent, backlogs declined 50 percent and the cancellation rate was 33 percent, the company said.

“We saw our sales absorption rate, our cancellation rate and general traffic levels deteriorate beyond normal seasonal changes,” Chief Executive Officer Ken Campbell said in a statement. He said he expected home prices to decline further.

Comments Off on Mexican standoff

Filed under Uncategorized

The Analysts’ Brawl

Reader Krazy Kat sends yet another interesting link, this time to a discussion of what, if anything, the latest Case-Schiller numbers mean. Worse than a 40% drop in prices? 50%? Worse, or have we reached bottom and started turning up? You can find views on all those possibilities, plus more, here.

Kat says that, in homage to Bush Derangement Syndrome, he’s coined a new phrase, REAS: Real Estate Armageddon Syndrome.

3 Comments

Filed under Uncategorized

Not yet close to being true in Greenwich

Wall Street Journal: Cost of owning draws closer to cost of renting (in some areas of the country).

 …[A]fter two years of rapid home-price depreciation, the relationship between the cost of rental payments versus after-tax mortgage payments is tilting toward ownership in a number of metropolitan areas.

Over the past 18 years, after-tax mortgage payments have averaged 26% more than rent payments, according to Green Street Advisors, a real-estate consultancy based in Newport Beach, Calif. In 2006, at the height of the housing bubble, mortgage payments reached as high as 66% more than rent payments. But by the end of 2008, average monthly rent for the largest 50 metropolitan areas was $1,045, compared with after-tax mortgage payments of $1,300, assuming a rate of 5.5% on a 30-year fixed mortgage. That means mortgage payments averaged just 24% more than rent payments, the narrowest gap since 2001.

In more than half of the top 50 U.S. housing markets — including Los Angeles, northern Virginia and Las Vegas — the ratio is now below its 18-year average. In Los Angeles, for example, mortgage payments averaged 60% more than rent payments between 1990 and 2008. Now, those payments average 30% more than rent.

“We’re not saying on an absolute basis that it’s cheaper to own a home, but on a relative basis…owning is looking much more attractive than it has in a long time,” said Andrew McCulloch, a Green Street analyst. While the shift doesn’t mean that renters will rush to buy homes soon, “it’s not a ‘no-brainer’ anymore if they’re going to rent versus own,” he said.

1 Comment

Filed under Uncategorized

And will the same oath of silence apply to HUD officials?

Obama is demanding that Defense Department employees pledge not to reveal details of the 2010 defense budget to “outsiders”. Why doesn’t that inspire me with confidence about what’s coming our way?

1 Comment

Filed under Uncategorized