Daily Archives: May 14, 2009

Turn, turn, turn again

Pelosi now confesses she did learn about waterboarding as early as 2003. “But I thought they were just taking a nap – golly, I’m such a TWIT!”

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Animals at rest and otherwise

Self – proclaimed “Twit” and Sotheby’s agent Cynthia Vanneck has branched out from worrying about my finances to writing us a breast-beating confession that she can’t tell the difference between a sleeping animal and a dead one so she’d like homeowners not to leave pictures of either one visible at their broker open houses in case poor Cynthia, with her fragile constitution, is alarmed by the sight.

Who among us can’t sympathise with this delicate flower? But, ever eager to help, I thought I’d offer a quick lesson in distinguishing between the two, thus cutting Cynthia’s chances of having a nervous breakdown in half. Here you go, girl, here’s a SLEEPING LION:

Aw, Cyndee, isn't he cute?

Aw, Cyndee, isn't he cute?

And here is one who isn’t sleeping; in fact, he’s rather dead.
He's just kidding, Cyndie - I'm just resting, don't worry!

He's just kidding, Cyndie - I'm just resting, don't worry!


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One single family house went to contract today ($2 million, 7 Sylvan Lane tear-down), bringing us to a total of 12 for the month, all but one of which were under $6. Twenty-four contracts in the same two week period in May, 2007, at higher prices. For what that’s worth.


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I no longer work for Raveis so stop pestering my poor boss!

As I said here when I struck out on my own (well,with Frankie Farricker), I adore Raveis’s Greenwich manager, Beckie Hanley, and one of my reasons for leaving was to spare her further attacks from angry brokers offended by my blog. So I was dismayed to learn today that someone claiming to represent those Byram condos emailed her in a snit about my recent comments and demanded to know how I could add “the credibility of Raveis” to my blog. Huh?

Turns out my bio, which I haven’t looked at in months or perhaps years, still mentioned that I worked for that fine firm. Fixed now. What I found interesting is that this is the first time I mentioned the condos yet, in complaining that I had killed a sale, the spokeswoman said, “we had two sales in November, contrary to his blog”. Wow, two whole sales in just the past six months? I hadn’t realized that this blog had retroactive effect but it clearly does. I’m sorry.

Look – I didn’t say you shouldn’t buy there, I just noted that sales had slowed. If you can get a good price and the location works for you, go for it, by all means. It will make the project’s spokeswoman’s day and maybe she’ll stop writing Beckie.

UPDATE: Beckie just called me “the gift that keeps on giving”. I told you she was sweet!


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Warning, professionals at work!

A regular reader and fellow realtor passes this along:

A house seller told me this story and gave me permission to pass it on to you should you be interested….
They had a broker open house recently and an agent came up to the listing broker in the kitchen and said “These must not be very nice people, there son killed a rhinoceros!”
She had seen a picture in the master bedroom of the sellers’ son, a photographer/conservationist, kneeling next to an AT REST rhino at a sanctuary in Kenya. The rhino may have looked wounded because it had been scratching itself or was scratched by another rhino, but don’t you love the chutzpah! 
Obviously she was one of those newly empowered TWITS out there who like to express their FEELINGS!  Maybe Manhattan real estate queen Barbara Corcoran was right when she advised sellers to remove all the family photos!

P.S. This particular seller (of a spectacular house) plans to splash the photo with fake blood and leave it in place.


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One thing to consider before turning down an offer

Most of the buyers I’m working with would like to buy in Greenwich but don’t need to. When they finally find a house they like enough to bid on and are refused, they aren’t pulling their hair and wailing, they are just deciding to wait. Now it’s possible that you, oh seller, by holding out for a better price over the summer, may achieve your goal and good for you if you do. But if you don’t, your house will be sitting there next fall among all the fresh inventory and buyers will conclude that no one wants your house at your price. It’s like the builder who tried to impress us by saying he had had 22 showings in the past month. He thought that meant demand, we thought it indicated that 22 couples had looked at his offering and passed on it. So imagine the attitude of those patient sellers when they return to town in September and see your house still unsold. Will they offer more than they did this spring, or less?

Here’s another tip: there are plenty of willing buyers out there but willing and able, not so many. Don’t confuse the two, as one seller recently did. He rejected our bid because a month ago he’d received another bid a full million dollars higher from two builders who claimed, as they always do, “to have a guy”. In this case, “the guy” was down south and, five weeks later, hasn’t been heard from. Now conventional lending to spec builders has evaporated, so faced with a homeowner who plans to build for himself and has the cash to  close in two weeks, no contingencies, the seller might have given some thought to the strength of that first, higher bid and concluded that it was never real. But like many sellers, he’s convinced that that bid without the wherewithal to perform represented the true market value of his house. All he needs, he figures, is the same bid, this time from someone with money, and he’s done great.

But the guys with cash aren’t offering as much as the guys who don’t have money – they can’t afford to, because they intend to follow through.


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Nancy Pelosi is ru (i)nning your country

The dreamboat’s latest bit of wisdom: food stamps are more “stimulative” than tax cuts. And of course, from a Democrat’s perspective, they certainly are. You see, the feds can tell you what to do with food stamps whereas merely taking less money from you leaves you free to do any damn thing you want with it: spend it on your kid’s education, buy a car, pay a doctor’s bill go out for dinner, or even invest it, for God’s sake! The Dem’s have plans for providing yu with the education, car and medical care your family may need – all you’ll have to do is beg for it; and the other two expenditures are clearly just foolish. So no tax cuts for you, Buster, you’d only waste it.

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The end is near!

According to the latest news from Alarmists, International, we’re going to kill off the world by recharging our iPhones. Yes, those pesky Third Worlders have discovered the joys of electricity and will be madly using up our precious bodily fluids just as electric rates are forecast to soar! These folks see – surprise! – more government regulation as the answer, both to save the polar bears and the Third Worlders themselves from frittering away their hard-earned rupees, but as usual, they can’t see the obvious solution: higher prices for electricity = demand for less electricity or more efficient iPods or both.

I say these nuts can’t see the solution but the more obvious explanation is that they are dour Puritans, determined to take all joy from life and happy natives dancing to music just slays them! They’re a glum, humorless lot and the sooner they’re washed away by a rising sea level, the better. Me, I’ll be on a paddle wheel boat, dancing.

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Turn, turn, turn

I was brainwashed by Mitt Romney!

I was brainwashed by Mitt Romney!

Poor Nancy Pelosi doesn’t know what to do or say. The Democrats she leads so proudly really, really want to drag the Bush administration (remember them? They’re gone, in case you are a Democrat and hadn’t noticed) through the mud and  distract voters from their own dismal failings, but there’s the Speaker of the House right in the middle of the “scandal”.  First she denied ever knowing about any waterboarding – when that statement became inoperative, she admitted that yes, she might have slept through a briefing or two on the matter but she certainly didn’t learn anything. That didn’t work and she was forced to confess that she had been awake, she did know what was going on, but had written a double-secret super probation letter of protest and hidden it in her underwear drawer, ready to sue if the politics of the thing turned against her.

That still isn’t working – the Demmerkrats are itching to go after Bush and some  of Nancy’s more impatient colleagues are even suggesting that they hold their hearings and include Nancy as a target of their investigation! That will never do, so today, Nancy has gone back to square one:she was never told about it, if she was, she didn’t understand it, if she did understand it she thought it was a prediction of future events, no more accurate than Jim Henson’s prediction of the exact date NYC is going to drown under melted icebergs, and, finally, if she was told about it and did understand it and knew that Shiek Killthemall was choking on vomit, snot and ingested water in the very next room right while Nancy was getting her briefing, she’d been assured that it was all legal, just like Bush was but he, that ratfuck-Harvard -educated dummie, should have known better, while Nancy’s just a Californian babe with an avocado or two stuffed in her ears and serving as brains.

UPDATE: Why are the Democrats pushing this issue? Aside from the Eastern effetes and their counterparts in Hollywood, is there anyone in America who gives a rat’s ass about gentle treatment for terrorists? Drowning the bastards seems like a far more popular  approach than helping them deal with their issues. Are the Beltway boys and girls really so far out of touch with their own constituents? Do they even bother returning to their home districts any more?

UPDATE II – Oops! All previous Pelosi statements are inoperative. Now she admits she knew about waterboarding as early as 2003 (still not there, girl, but closer).


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More on pricing

Tooled up Stag lane to see two listings, 44 Hunting Ridge and 67 (?) Stag. Hunting Ridge is newish construction, nicely laid out, huge, with good yard space – no pool, but room for one – and priced at around $7 million. Different buyers have different tolerances for road noise so perhaps the Merritt Parkway traffic won’t impact this house’s price. I know my buyers would object and would expect a large discount if they were willing to live here at all. I didn’t find the noise bad at all, and it’s clearly a beautifully built house, so heck – I just need different buyers!

The house on Stag Lane is basically a four-acre building lot with a nice, but outdated building on it. It’s asking $3 million, which I think is steep for what I’d evaluate as a lot – a nice lot, but a lot – heavily impacted by the Merritt – that would be those cars flashing by through the trees a hundred yards away. In fact, I wonder if this is the house that a reader’s agent first denied was close to the highway and then suggested that Merritt noise was “like a babbling brook”? Nah, couldn’t be, because the car tires slapping pavement sounded nothing like a brook, babbling or otherwise. What’s  a building lot worth here? $1.5?  $2? I tend to be pessimistic about these things, though, and if one of my brother Gideon’s treasured out-of-towners with an outside realtor shows up, maybe they’ll be so excited by the opportunity to live among us swells of Greenwich that they’ll ignore the highway noise and pay full price. Maybe.


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Open House Thursday

Well I saw the $18.6 (or so) Glen Avon house today. The site is not nearly as impacted by I-95 noise as I’d thought, so that was nice. I’m not so sure about the house itself. Ordinarily, I really like builder/designer Alix  Kali-Nagy’s sense of proportion and grace but this house, while graceful, seems to be missing some stuff. There is no eat-in kitchen, for instance, and a breakfast nook and a small I-don’t-know-what -it-is room nearby don’t make up for this omission. It’s not as though Mr. Kali-Nagy forgot to include one so perhaps this is the new trend, or perhaps the rich don’t gather in the kitchen when entertaining the way mere mortals do.

The living room is also small – not unusable, mind you, and I’d love to have its duplicate in my own house, but I envision the $20 million crowd as heavy into business entertaining and this room won’t allow it. Of course, if all your competitors once worked for Bear Stearns, they’re probably out in your driveway parking cars instead of inside sharing Gin and tonics with you. with Maybe room for twelve billionaires is all you will need because that’s all that’s left.

This must have been a custom job whose owner suddenly changed his mind because the paint color choices, while vibrant, are hardly the hues designed to offend the least number of people. No beige or off-white here!

Beautiful master bedroom, nice kiddies rooms, all with really, really special baths. But then there’s a series of odd little rooms with no purpose I could figure out, and I’m not sure what’s up with that.

Basement’s unfinished but I will remind you, the seller has priced this below $20 million – quit your kvetching.

Decent waterviews and the land is further south than I remember so the powerplant is not directly across the harbor. That’s good. I’d have preferred a view up the harbor instead of across, where some other Gatsby mansion has been erected but the lot probably wasn’t large enough to accommodate that siting. Fabulous dissapearing horizon pool, right on the seawall’s edge. I didn’t see a spa/ hot tub but I didn’t look very hard for one, either. I’d think a cigar, a hott tub and the view would go a long way to making this place seem worth a whole bunch of money. Worth  this much? Not to me, but that’s like asking me if I’d like to pay off the national debt. Better to get the opinion of someone who can afford this size home and fortunately, we have just the means to do so: it’s called the market. So we’ll all just have to wait and see.


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Stiff upper lip, chaps! Obama’s working on sending you replacements

City of London commercial rents drop to 1991 level as financial industry disappears.

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I was sifting through listings this morning, trying to find something of value I may have overlooked before and I failed. But what did strike me is that so many homeowners are “offended” by low offers and here they are, two years later, still trying to unload their property at a million dollars less than they demanded before. Insulting or realistic? You decide.

25 Jeffrey Street (off Stanwich) for instance, was offered for sale a year + ago at $2.6 million. I don’t know whether they ever received any offer at all, let alone an insulting one, but you can buy it today (please!) for $1.8. 173 Stanwich sold for $1.980 million in 2003, had all sorts of fancy electronics installed and some renovations performed and was returned to the market in 2007 for $3.6 million. Today, two years later, it’s still available, for $2.2 million. 11 Pinecroft asked $4.3 in 2007 and has never sold – today it would gladly take $3.3.

So don’t blame buyers for offering so little. Experience is teaching them that Greenwich prices are frequently overpriced by a million dollars or multiple millions of dollars. If I were to guess what the average house currently for sale will eventually sell for, if it sells at all, I’d say 60% of its asking price. I realize that that’s not a figure that will result in many accepted offers, but that’s where I see our market. If I’m right, we’re in for a long drought before prices raise to where sellers think they should be or sellers give in. Quite a standoff.


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From a reader: Zillow polls Americans

And some get it, some don’t.

NEW YORK (Reuters) – Most American homeowners believe their home’s value has declined over the past year, but a majority also think a bottom has been reached, real estate website Zillow.com said on Thursday.
A majority, or 60 percent, believe their home lost value during the past 12 months, according to the Zillow Q1 Homeowner Confidence Survey.
In reality, 80 percent of homes across the country lost value during the past 12 months, according to Zillow’s first-quarter Real Estate Market Reports.
Additionally, 18 percent believe their home gained value in the past 12 months, and 22 percent believe its value remained the same, according to the survey.
That resulted in a Zillow Home Value Misperception Index of five — the lowest it has been since Zillow introduced the index in the second quarter of 2008 and down from 10 in the fourth quarter of 2008. A Misperception Index of zero would mean homeowners perceptions’ were in line with actual values.
“The perception of American homeowners is finally catching up to reality, which is that 80 percent of all homes in the country lost value during this past year,” Dr. Stan Humphries, Zillow’s vice president of data and analytics, said in a statement accompanying the survey.
“While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward, with three out of four homeowners believing that their own homes’ prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well,” he said.
Most homeowners — 74 percent — believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home’s housing slide, Zillow said.
Specifically, one in four homeowners, or 27 percent, think their home’s value will increase in the next six months, while nearly half, or 47 percent, believe its value will remain the same. Homeowners were similarly optimistic when it came to predicting home values in their local markets, the survey showed.
About two-thirds of homeowners believe home values in their local markets will increase or stay the same, at 26 percent and 37 percent respectively, over the next six months. Thirty-seven percent believe home values will decrease, the survey showed.
It also showed a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31 percent of homeowners said they would be at least “somewhat likely” to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround, the survey showed.
“Also interesting is the information we have for the first time this quarter on the levels of ‘shadow inventory’ – homes that people would like to sell but that aren’t currently on the market, and thus aren’t captured in the official number of homes on the market,” said Humphries. “With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.”
With a Misperception Index of 2 — down from 13 in the fourth quarter — the perception of homeowners in the West was closest to reality, along with that of homeowners in the Midwest. Northeastern homeowners’ perception of their own homes’ values was the farthest from reality, with a Misperception Index of 11, up from 3 in the fourth quarter, the survey showed.


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30% drop in home value means no equity, eh?

That’s not the case  for many homeowners, but anyone who bought a house in Greenwich since 2004 or, I’d argue, 2000, with a typical mortgage debt to equity ratio of 80/20 has seen the equity in that house vanish. Extended across the country, this does not bode well for an economic recovery any time soon.  Henry Blodget points out,

As Warren Buffett succinctly observed, anything multiplied by zero is zero.

Put differently, when the value of the asset drops below the value of the debt used to buy it, poof.

Nowhere is this concept more important than in the housing market.  A couple of years back, the value of US residential real estate was about $25 trillion. Mortgage debt constituted about 45% of that ($11 trillion) and owner equity 55% ($13 trillion). (Very rough numbers)

Now, the value of the US housing market is down almost 30% and headed to, arguably, down 40%.  In other words, if the peak value was $25 trillion, the current value is about $18 trillion, and the trough value will be about $15 trillion.  So what will happen to homeowner equity?  It will drop by 70%.

This isn’t the end of the world for homeowners who can keep up their mortgage payments even when their equity is gone. Sooner or later, prices will recover, and, as Blodget observes, the same leverage that wiped them out will work in their favor to restore value. But there are many in this town who have lost their jobs and cannot keep going. One of the difficulties in buying a house these days is that, while buyers are perfectly willing to pay the current market value, sellers can’t accept those offers. They can’t afford to. But if when they also can’t afford to stay, that’s a problem. I see great difficulties ahead.


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