Daily Archives: March 26, 2009

Here’s something to take your mind off the dangers of artificial turf and falling real estate prices

Solar storm could wipe out U.S. electrical grid and we’d all be dead.

From New Scientist:

IT IS midnight on 22 September 2012 and the skies above Manhattan are filled with a flickering curtain of colourful light. Few New Yorkers have seen the aurora this far south but their fascination is short-lived. Within a few seconds, electric bulbs dim and flicker, then become unusually bright for a fleeting moment. Then all the lights in the state go out. Within 90 seconds, the entire eastern half of the US is without power.

A year later and millions of Americans are dead and the nation’s infrastructure lies in tatters. The World Bank declares America a developing nation. Europe, Scandinavia, China and Japan are also struggling to recover from the same fateful event – a violent storm, 150 million kilometres away on the surface of the sun.

It sounds ridiculous. Surely the sun couldn’t create so profound a disaster on Earth. Yet an extraordinary report funded by NASA and issued by the US National Academy of Sciences (NAS) in January this year claims it could do just that.

Over the last few decades, western civilisations have busily sown the seeds of their own destruction. Our modern way of life, with its reliance on technology, has unwittingly exposed us to an extraordinary danger: plasma balls spewed from the surface of the sun could wipe out our power grids, with catastrophic consequences.

The projections of just how catastrophic make chilling reading. “We’re moving closer and closer to the edge of a possible disaster,” says Daniel Baker, a space weather expert based at the University of Colorado in Boulder, and chair of the NAS committee responsible for the report.

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The first good idea to come out of Washington in my lifetime

The anti-trust division of the Senate Judiciary Committee has, led by that Republican Cicero, Orrin Hatch, announced that it will conduct hearings on how college football champions are determined.

Under the BCS, some conferences get automatic bids to participate in series, while others do not.

Obama and some members of Congress favor a playoff-type system to determine the national champion. The BCS features a championship game between the two top teams in the BCS standings, based on two polls and six computer ratings.

Behind the push for the hearings is the subcommittee’s top Republican, Sen. Orrin Hatch of Utah. People there were furious that Utah was bypassed for the national championship despite going undefeated in the regular season.

The title game pitted No. 1 Florida (12-1) against No. 2 Oklahoma (12-1); Florida won 24-14 and claimed the title.

The subcommittee’s statement said Hatch would introduce legislation “to rectify this situation.” No details were offered and Hatch’s office declined to provide any.

Imagine if the idiots running our country admitted that they were clueless about business, finance and law and spent their time instead on things they did know about: football, cocktail parties and stripper bars, and left the important things to run themselves. Our GNP would quadruple, the federal budget would wither away until it could be covered by a single paperboy’s weekly tips and bereft of anything to cover, CNN and Fox would go off the air. Rush Limbaugh would probably stick around, if only to opine on the merits of black pro quarterbacks, but otherwise, bliss.

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Idiot prosecutors

Nothing new here, but fresh examples of morons with the power to abuse their authority are always salutary. 

Prosecutors charge 14-year-old girl with possession of child pornography for posting nude pictures of herself on My-Space.

TRENTON, N.J. (AP) — A 14-year-old New Jersey girl has been accused of child pornography after posting nearly 30 explicit nude pictures of herself on MySpace.com — charges that could force her to register as a sex offender if convicted.

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A fresh start at the new, apolitical Justice Department

With Cheney and Bush gone, our country can return to a Justice Department that seeks only to serve the interests of “The People” with no room for partisan politics. It’s been a dark nightmare but a new dawn is breaking and self-styled “Democratic Political Strategist” Donna Brazile is lecturing all career Justice Department employees on the merits of that new approach. Paid for with your tax dollars, of course.

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A contract!

Nothing to send spec builders’ hearts soaring, I suspect, but 154 Cognewaugh (no details available on the Net because it’s a Sotheby’s listing) has gone to contract. This is a large new shingle style house built on land purchased for $1.4 million. The house was originally priced at $4.895 in July, 2007 and the builders have been adjusting their ambitions downward ever since. The latest price was $3.150 million as of January and I’d be surprised if the buyer bid full price. Even if he did, the builder will have just $1,561,000 left after deducting the land cost, commissions and taxes. If the constuction loan was at zero interest, then no problem.

The same builder, by the way, has reduced the price of another project, 137 Cat Rock Road, to $4.295, from its original price of $5.495. Like Cognewaugh, this is a beautifully crafted house and this one has a very nice, huge flat back yard and Mianus River Parkland behind. Nothing wrong with it that I can see that a stronger market won’t cure.

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The Big House

808 North Street

808 North Street

No, not where Bernie Madoff’s headed, this is a 15,000 sf  biggie built in 1997  on 4.5 acres way up North Street. It sold in 2000 for $11.3 million, just 43 days after being listed for $11.970. The buyers tried unloading it for $13.9 million in May ’04 and when that didn’t work “renovated” it and put it back on the market last May for $12.490. It has a new broker and a new price today: $11.750. Adjusted for the inflation that’s taken place in the past nine years (that purchase price would be about $14,000,000 today, according to this inflation calculator), and adding in the cost of those renovations plus taxes and commissions when this does sell, I wouldn’t call this a home run on the investment front, but then, how’s your stock portfolio doing? Pretty spectacular house, judging from the pictures.

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Prices and reality

There are three similar houses for sale in Greenwich, all on the same street (just to keep my cellphone and emailbox less crowded today I won’t identify the street – these could be anywhere in town). One started at $3.750 million last spring and despite being a nifty house with beautiful grounds, is still unsold today after dropping a full million. Another started at the same price ($3.750) last September and has dropped to $3.5 and also remains unsold. Earlier this week the third house joined them on the market, priced at $4 million. I understand that every home owner considers their house to be exceptional but trust me on this – the age, architecture and state of renovations all appear to be roughly the same, and all are of very high quality. I wonder, then, at the decision to price the third house where it is, given the failure of the first two to sell at lower prices. But, as always, we’ll see.

And I note that another price reduction has been recorded today, again at an address I won’t give because the builder owner screamed at one of my colleagues and threatened to take their business elsewhere (funny thing, it’s not a Raveis listing) when I suggested, a long time ago, that it would probably encounter difficulty selling at its asked-for price. It dropped 25% today, which is too little, too late, but perhaps that builder will call back my colleague and apologize. You think?

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Are we running out of ball players?

29 Calhoun Drive, a tear-down and building lot off Glenville Road, was purchased by the builder Back Country Ventures for $2.375 million back in July, ’08, and put back up for sale in October at $2.450. Today, just days after selling their Perkins Road house to that new Yankee, they dropped the price of this land to $2.150 million. We’re still in spring training guys; not too late to hold out hope for a new player coming in, is it?

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Give it back! Give it back!

Where are the Blumenthal/Cuomo subpoenas of yesterday? Ralm Rahm Emanuel pocketed $320,000 for a no-show job at Freddie Mac while corruption reigned. Maybe he paid taxes on it – that would make it alright.

(Bad link – fixed now)

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Dirt Cheap

The market for building sites, not robust to begin with the past year, continues to decline. Today a lot on 29 Old Orchard is reported as dropping to $495,000. This land was never worth the $1.050 million asked for it last spring but a bank, at least, thought it was worth $599 when it made its original loan. They were wrong, and the approximately 20% shaving today demonstrates that. But hey, what do banks care if they lose more money? The taxpayer’s going to bail them out anyway, so maybe you should try to get some of your taxes back by bidding $75,000 on this.

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Just what we need – another farmer give-away

We’re already ruining our engines so that farmers can sell ethanol and they’re pressing for more. We have a huge subsidy program where we pay these hayseeds to grow crops and pay them to not grow crops and now they’re demanding we pay them “carbon fees” for doing nothing and watching their farms sit fallow. I’m sure if I ever met a farmer I’d like him personally, but as a group, these salts of the earth are as greedy and grasping as any AIG executive clutching his bonus check.

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Pressing questions

Here’s a picture of our president at a basketball game, sipping a beer. Nothing wrong with that – in fact, he looks relaxed, which is an excellent thing. What’s got me curious is that he’s holding his beer with his right hand and I’m pretty sure I’ve seen other pictures of him signing bills with his left hand. I, a coffee drinker these days, hold my drink in my right hand too, but I’m right handed. So the question is, am I wrong in thinking there’s something sinister (in the original sense of the word – ask Hiram, although he’ll probably correct me) about our Prez, or is he ambidextrous or do lefties hold their cups just like we righties? And if you think that the fact I’m worrying about this means it’s a dull day in real estate, you’d be right. Still, any lefties out there know the answer?

president Lefty

president Lefty

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Pricing in a dead market

40 Zaccheus Mead Lane

40 Zaccheus Mead Lane

During the open house tour today I found myself, as I usually do, trying to assess the “proper” price of some of the listings I saw. It’s just about impossible these days, because almost the only buyers active right now are my kind of people, bottom feeders. They are concerned about where the market’s heading and to ensure that they’re protected against a further lurching drop in prices, they are interested in deep, deep bargains, not what’s a decent price today. That’s what makes it so hard to price things. I have a listing now that is definitely over-priced for this market – my clients know it and I know it, and they’d drop the price if I could give them some sort of assurance that at “X” price we could sell the place. But I can’t, and if, just as an example, I told them that cutting the price in half would cause it to sell and it failed to sell, then they’re really stuck, because there’s no going back: despite the occasional attempt, raising a price after lowering it almost never works.

Which brings me to the house pictured above on Zaccheus Mead. This is a gorgeous house built by a excellent local builder with a great reputation for quality. I think he misjudged the appeal of a house sited where it is, with four acres but not much lawn, and he’s paid the price for that: the asking price is now $7.495, down a long way from where it started two years ago, at $11.2 million. With 15,000 sq. ft., he’s offering it at $500 a foot – you couldn’t come close to duplicating this house at that price. Would the builder go lower still? Possibly, given the market, but at this point he’d just be bidding against himself. I wouldn’t blame him if he stayed right where he was and waited for someone to come along who didn’t want a huge yard to maintain and preferred what this offers; beautiful, secluded woodlands.

I suspect that there are a lot of sellers out there like my client and 40 Zaccheus Mead’s builder. They’re probably open to lower bids, but don’t want to publicly announce that by dropping much further lower than they are. One of the problems in our market that I see is that the buyers are all looking for deals at around twenty cents on the dollar and the sellers are stuck at perhaps eighty cents. If you’re a buyer, you and your agent might nose around and if you find a house you like, try a bid at maybe fifty or sixty cents on the dollar and see what happens. My guess is, you’ll be successful and get a good deal on a house. And by the way, have your agent pull the price histories – there are properties out there, like Zaccheus, that have already taken huge chunks off their initial price. Some of those prices were, admittedly, too high to begin with (well all of them were, in the sense that they didn’t sell) but there are some well priced properties sitting out there, right now. And, lest you think I’ve gone soft in my old age, even more properties whose owners still haven’t got a clue. The job of you and your agent is to determine which is which and deal only with the former type of sellers.

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156 Stanwich

It’s as nice as it sounded (and don’t blame me for the lack of listing details – Soetheby’s either hasn’t released that information to the Net or there’s a really long time lag occurring). In any event, this house is right on the Greenwich Country Club’s course – it has a huge backyard that just continues onto the course (which, as a reader pointed out yesterday, is maintained in beautiful condition at the Club’s, not the owner’s expense). The house itself was built in 1936 and was added onto and modernized over the years so that it has five bedrooms now, a modern kitchen and all updated baths. If I owned it (and I’d like to but it’s beyond my pay scale) I think I’d knock out the wall separating the kitchen from the family room – right now, the kitchen, while new, doesn’t meet the eat-in desires of today’s market, but that’s a quibble – not an expensive undertaking at all, as far as my quick glance could see. The windows might be replaced with double-glazed but the cost saving on that depends on how long you intend to stay.

Other than that, I’d leave things just as they are. The house is large by 1936 standards and modest by today’s: 3,600 sq. ft. but you could add on, if you had to. It was priced about a million dollars higher last year: at $2.695 today, the sellers have already shouldered the bulk of your negotiating. No one in their right mind (or even those of us missing a few marbles) would tell you with authority what a house is “worth” these days, but if you’re looking in this price range and want pre-war grace, rather than 2008 ah ….whatever you call it,  you shouldn’t miss seeing this.

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Open house Thursday

As of this posting, there’s no news on our MLS so I’m going out to see a few houses I want to see (156 Stanwich, in particular) and avoid the over-priced retreads while, perhaps, discovering a hidden gem – I won’t hold my breath. By the time I return, there may be some real news to report.

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Know when to fold them

That UT executive who’s in court trying to keep his Swedish wife of four years from grabbing more than the $36 million he’s already given her now testifies that her sexual tastes were too rough. I dunno, fella, but this is probably more information than we need or you want to share. How much more would it cost to end this now and have her go away?

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We have no gang activity at Wilbur Peck – it just seems that way

Greenwich Roundup links to a Greenwich Post article on trouble makers at Wilbur Peck. I could just steer you to the Post article but Brian Harod, Blogger at the Roundup, has so much fun blasting the Greenwich Time in his version that I thought it the more entertaining of the two.

To be fair, the actual article seems to blame the discord to a particular pair of brothers and their friends. If that’s right, then it wouldn’t really amount to a gang, would it? Jesse James and his family notwithstanding?

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You voted for change, you got it – suck it up

Letter from an AIG FP employee expressing shock that he and his colleagues were treated unfairly. He reminds me of Michael Moore, dumbstruck that Osama hit New York – “doesn’t he know we voted for Kerry?” Useful idiots.This guy was in finance for the same reason I’m in real estate: not to make money, heaven forfend, but to help our fellow man. Cry me a river.

Personally I hate this system, I fear for the future of America and
the world and I and many of my colleagues strongly supported
candidates of change like Obama because we could see something was
amiss. I will tell you though, what was amiss was not that a bunch of
hard working, highly motivated and intelligent individuals working in
finance got paid a lot, what was amiss was that the wider culture led
by people like W Bush and Dick Fuld and Jimmy Cayne set and reinforced
the example that money was the ultimate arbiter of goodness and
rightness and that people who stuck to their traditional values and
actually cared about the institutions they worked in and refused to do
crappy business that would blow up their banks were sidelined and
underpaid and made to feel like fools for “not getting it”.

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But will they sell?

The P&Z granted Shemin Nursery’s application to divide forty-four acres into five building lots last night. Seems as though that was the reasonable thing for the P&Z to do – the vote in favor was 5-0, but I doubt we’ll see any impact from this decision until the market improves. Building lots anywhere in town aren’t breaking any (upper) price records – in fact, they are barely moving at all, and King Street is not, say, Round Hill Road. The present market value of lots there, even ones as large as proposed, may not be worth the cost of site development, right now. Or I don’t think so, anyway. But if the land is ready to go, with all approvals in place, then Shemins will be ready to move when the market does. That’s smart, even if it amounts to making hay while the sun isn’t shining.

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