Daily Archives: May 5, 2009

Here’s something else to worry about

Banks about to take a huge hit on commercial real estate loans. Thursday is witching hour, according to the WSJ and while the nations’ 19 largest banks aren’t going to be allowed to fail by the FDIC, the Journal says that that leaves 500 smaller banks with assets of less than $1 billion in jeopardy. Rumor abounds that the mortgage portfolios of some of our local banks are being shopped around, drawing offers of thirty cents on the dollar. If a block of, say, $250 million in residential construction mortgages hits the market, all priced to recoup the new owner’s thirty cents and maybe an additional twenty cents for their trouble, that’s going to be interesting.

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Hey Guys, you still don’t get the picture

Banks are sounding surprised that the government won’t let them give back TARP money and free themselves of governmental restrictions. There are obviously some very smart people on Wall Street, far smarter than I, but it’s just as obvious that they weren’t studying political science and philosphy in college. If they had, those “soft courses” would have tipped them off to what was at stake last fall.

The government couldn’t care less if it doesn’t get back the $10 billion it loaned Goldman or the billions it forced on other banks – it’s just taxpayer money, after all. The point, the sole purpose of TARP was to grab ahold of the financial industry and twist it to the politicans’ whims. So having seized control, of course they aren’t going to relinquish it. The fun has just begun.

I saw some poor dolt of a business professor on the news tonight saying, “well, gee, they won the election so I guess we all have to accept more regulation – I just hope they don’t go too far.” That’s been the cry of businessmen and producers since the dawn of civilization – they produce and work in the vain hope that  the looters will restrain their greed. But it’s power these people are after, not money – they’ll always be enough of the latter for the people at the top, just ask Castro. Businessmen don’t see this and that’s going to doom them.

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Not every price cut can be blamed on the recession

29 (?) Topping Road failed to sell for $37 million four years ago so in 2008 the seller raised his price to $45 million. Only God knows why that tactic didn’t work but regardless, he’s down today to $39 million. It doesn’t come with a real house on it, like his neighbor Leona’s does but, at least for now, it’s cheaper. dream on.

14 Bayside Terrace in Riverside was priced at $1.495 a few monthgs ago and came down today to $1.295. That would probably have been a better place to start.

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Proving there’s somebody for everyone

89 Perkins Road

89 Perkins Road

This house on Perkins failed to impress me when I first saw it and even when the sellers whacked $1.5 million from its price, from $5.875 to $4.375, I viewed it as worth no more than the land it sits on. But, as is often the case, I was wrong or at least, someone didn’t share my opinion because it’s reported as under contract today. Ed Mortimer found the buyer, and good for him.

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Here’s one that should be around for awhile

I previously wrote about 128 Butternut Hollow but didn’t identify its address. Now that it’s on the market, I figure it’s fair game. Soooeee! Built in a swamp by a local builder, Richard Harris (not the electrician Rick Harris) who went bust, this house is offered by the bank that holds the mortgage. You drive past fields of skunk cabbage to get to it. It’s flanked by a bungalow on one side and a neighbor’s garbage dump on the other side and  the combination of swamp, trash, squatter’s shack and the merry burbling sound of Merritt Parkway traffic gives the whole place a hardscrabble, Tobbacco Road kind of ambiance. If you see a third generation harelip carrying a musket or a banjo, watch out.

The house was bent and twisted to conform to the small area of dry land on the site and nothing in its flow makes sense to me. Until recently, I’d have told you that I’d never seen a post and beam house I didn’t like but this makes the third time in a row Harris has proved me wrong. Wonder why he went broke, eh?

Looking past the location, architectural style and design, I would pause before buying a house from a builder who went belly-up during construction. The cynic in me whispers that whoever finished the job was more concerned with getting a c.o. and putting the place on the market than he was in adding those nice, final touches a quality builder might.

But heck, that’s all just my opinion – and this might be just the place for you. It’s asking $3.9 million, which is less than the $25 million asked for 223 Round Hill Road. So at least they’re not asking that.

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Contracts

As I posted earlier, that $25 million spec house at 253 Round Hill did indeed go to contract and it drew multiple bidders – rumor says winning bid was in the high teens. And the builder’s other unsold project on Stillman Lane also found a buyer, so someone’s out of the woods. Good news for sellers, because these tow make it clear that there are buyers out there with money. Still we’ve added three more houses to our inventory today – it’s now 732.

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Quiet morning

Not much happening on this rainy Tuesday morning. That land on Meadowcroft, asking $5 million and reported under contract a few weeks ago, was reported sold today for $5.1 million, showing that there is still a market for exceptional land in great locations.

Other than that, lots of price reductions. I find it encouraging to see house prices lopping off $3-$400,000 because it means that, slowly, Greenwich prices are becoming more affordable. That will bring in buyers who have wanted to live here but until now, couldn’t.

One bit of “wisdom” picked up by a friend who was talking to a band of New yorkers last night. They and their friends all want to move to Greenwich but are afraid to do so because “all” their friends out here plan to pull their kids from private school and send them to our public schools, so Greenwich schools will be too crowded. There’s lots of knowledge out there that isn’t, so I won’t believe this until the tuition bills come due in three weeks. On the other hand, real estate rumors, especially in Greenwich, often have a grain of truth. So we’ll see in three weeks, I guess.

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