Daily Archives: June 8, 2009
James Taranto of Opinion Journal .com posts this splendid example of journalistic bias. And newspapers wonder why no one wants to pay them for their content.
But news reporters aren’t supposed to be partisan, and look at the lead paragraph from a dispatch by the Associated Press’s Jeannine Aversa, headlined “US Loses Just 345,000 Jobs in May, Raising Hopes”:
“Employers throttled back on layoffs in May and cut the fewest jobs in any month since the financial crisis erupted last fall–raising the brightest hope yet that an economic recovery will take hold later this year.
Contrast that with Aversa’s report on the same statistic a year ago, titled “Jobless Rates Jumps [sic] to 5.5 Percent–Biggest Rise Since ’86”:
“The nation’s unemployment rate jumped to 5.5 percent in May–the biggest monthly rise since 1986–as nervous employers cut 49,000 jobs.”
The unemployment rate was 5.5% then; now, it is 9.4%. The number of jobs cut last month was seven times as high as in May 2008, and this comes on the heels of months of even greater job losses. But last year’s numbers, according to Aversa, “showed a deeply troubled economy, with dwindling job opportunities,” while this year’s raise “the brightest hope yet.”
In a blow to our best and our brightest, parents are feeling the financial pinch and are cutting back on the subsidies they’ve been giving to their post-college children. The result? Hell on the streets of Williamsburg.
Luis Illades, an owner of the Urban Rustic Market and Cafe on North 12th Street, said he had seen a steady number of applicants, in their late 20s, who had never held paid jobs: They were interns at a modeling agency, for example, or worked at a college radio station. In some cases, applicants have stormed out of the market after hearing the job requirements.
“They say, ‘You want me to work eight hours?’ ” Mr. Illades said. “There is a bubble bursting.”
Famed for its concentration of heavily subsidized 20-something residents — also nicknamed trust-funders or trustafarians — Williamsburgis showing signs of trouble. Parents whose money helped fuel one of the city’s most radical gentrifications in recent years have stopped buying their children new luxury condos, subsidizing rents and providing cash to spend at Bedford Avenue’s boutiques and coffee houses.
For 18 months after graduating from Colby College, Jack Drury, 24, lived the way many Williamsburg residents do: He followed his passions, working in satellite radio and playing guitar. He earned money as a bicycle messenger and, on occasion, turned to his parents for money.
But as the recession deepened last fall, his parents had to cut the staff at their event planning company to 30 workers from 50. Asked for his help, Mr. Drury cast aside his other pursuits and started work as a project manager for his parents. But he still plays the guitar in two bands, Haunted Castle and Rats in the Walls.
“My future is in the family business,” he said. “Music is just for fun.”
Eric Gross, 26, a construction worker, was going to buy, with help from his father, a $600,000 one-bedroom condo with city views at Northside Piers, a luxury building, he said.
But his father, who works in the auto industry, said he had to reduce his contribution. “He’s pulling back the lifeline,” Mr. Gross said.
So Mr. Gross is scaling back, shopping for a $300,000 apartment.
Don’t despair over the fate of all these young people – some, from places like Harvard, naturally, rather than loser schools like Colby, still have plenty of Daddy’s money, as reassuringly related in this other Times’ story on real estate, “Honk if you think it’s over” :
Along came Luke Sager, a recent Harvard graduate and co-captain of the college soccer team, [relevant how? Ed.] looking for his first apartment in New York. Working with Emily Beare of Core Group Marketing, he methodically studied the market, visiting 50 apartments over three months, she said. Love struck when he saw the apartment at the Grand Madison.
But Ms. Ramer was listing the apartment as a “short-sale opportunity,” and other buyers were interested. An offer of $1 million in March was turned down cold, but as time went by the seller decided to be more flexible. Then, during a single week in May, three separate offers came in: one for $825,000; a second, Mr. Sager’s, for $850,000, half in cash; and a third for $900,000.
Mr. Sager countered with a $925,000 bid, all in cash, and to circumvent any more bargaining, insisted that the contract be signed the same day.
And so it was, but now Mr. Sager is waiting for the seller to complete his negotiations with the bank.
It’s approaching three business days since 253 Round Hill Road sold yet, in violation of the GAR rules, it remains unreported. I can understand why the listing broker might not want to advertisehis getting just 66% of his asking price, but surely the selling agent wants to claim a $16.5 million sale. So what gives? Is there some other pending deal whose comparable value would be marred by this one’s price? Is everyone at the two brokers just to busy to bother with little things like reporting sales? I’m not speculating that there’s anything nefarious going on here, I’m just curious.
What could possibly go wrong? Prisoners run gangs, order hits via smuggled cell phones on murderer’s row.
2 Conyers Farm, a (very nice) cottage plus 10 acres and a plan – Panama! was listed at $7.995 million in January but found n0 takers. Today it’s been reduced to $7, 495,000, so if you really wanted this property but were reluctant to offer them $500,000 less than their asking price for fear of offending the seller, you are now free to offer away.
One contract reported today so far, the little brick house on Riverside Avenue, asking $999. The only sale reported was not the Round Hill spec house that sold Wednesday but a bungalow on Gregory sold Friday, in the low 9’s. Of interest, perhaps, among new listings is 82 Sawmill Lane, asking $2.5 million. It failed to sell at $2.250 in 2004 but back then its listing was limited to just 16 days. The current listing is a year, so I guess they’re serious this time. Of course, a serious seller might use 2004’s unsuccessful price a departure point downward, rather than a springboard to a higher price, but time will probably correct that.
Here we have a nice house in Belle Haven at 143 Otter Rock. In 2002 it was listed for $6.2 million, dropped to $4.950 in ’04, raised to $5.3 in October of that year, dropped to $4.75 in ’05, raised to $5.85 in ’06, dropped to $5.495 in ’07 and finally sold (phew!) that year for $4.7 million.
The present owners, apparently seeking to duplicate the original sellers’ adventure, put it back on for $5.75 less than a year later in 2008, dropped it to $5.395 that May, to $4.975 in June and pulled it in August. It’s back now, unchanged except for price, asking $5.395 million. I wonder what they’re reading or who they are talking to that makes them think that the local real estate market has improved since August of last year? Lehman Brothers? Bear Stearns? Never heard of them.
More frequently these days I’m noticing that, at least to my suspicious eye, the local record keeping for my “profession” (yes Walt, I know, that’s why I put it in quotations) is being manipulated. For instance, 253 Round Hill Road sold last Wednesday for $16.5 million (from an original price of $25, but still a good sale). Under the MLS rules as I understand them, that sale should have been posted by Thursday. As of 1:00 Monday, there’s no such report. Now I don’t know why it is being kept off the MLS – you’d think the selling agent, at least, would want to crow about it, but there must be some reason, and I wonder what that is.
Similarly, I’ve been writing recently abut listing and sales histories being disappeared and here, I think, is another one: 504 Round Hill Road has been for sale, unless I am mistaken, at least since 2003, yet it shows only a truncated history back to 2005, when it was asking $8.5 million – it’s down to $6.750 today.
Realtors depend on accurate records to advise their clients, both buyers and sellers. When those records are corrupted, whether by posting “sales prices” millions f dollars higher than the actual selling price (the broker explained that one by claiming that the house would have been worth that much had it been finished!) or wiping out old prices or long histories of failure, it makes the records useless. That may benefit some brokers – I don’t know, but it certainly harms the rest of us and all of us pay the same dues and fees to maintain the system. o what’s going on?
Fans of a powerful federal government have been applauding the Democrats takeover of two of our auto companies, and meet every criticism that we’re watching the socialization of private industry by responding, “well, the companies didn’t do such a hot job themselves”.
True enough, which is why many of us thought we should let them go belly up and see better companies replace them. Instead, we have Congress deciding where cars will be built, what cars will be built, how much they will cost (we taxpayers will be forced to subsidise the difference between cost of production and a low sales price), who should run the companies, how much they can spend on advertising, etc. And our government is just warming up – wait til plant closings are proposed for a powerful politician’s district.
None of that sways big government types, who can hardly wait for the same politicians to bring their cost-cutting skills to medical care. Well while they wait, the New York Times reports today on how the Stimulus funds are being spent, and you might want to read it before signing off on Obama’s health plan, if he ever reveals one.
As a result of a political compromise with Sun Belt lawmakers last decade, the enormous expansion of the weatherization program will invoke a rarely used formula that will devote 31 percent of the money, nearly double the old share of 16 percent, to help states in hot climates, like Florida, save on air-conditioning.
Many environmentalists say cutting electricity use for cooling is just as worthwhile as reducing the use of oil or gas for heating. But there are substantial questions about whether it is the most efficient way to save energy.
The nation spends twice as much on heating as on cooling, according to the federal Energy Information.
Repeated questions have been raised about the effectiveness of weatherization in hot-climate states. The Oak Ridge National Laboratory in Tennessee, which evaluates the program for the Energy Department, released a study last year questioning the program’s results in Texas, which will get $327 million in weatherization money from the stimulus law. The laboratory found that insulating homes did not save a significant amount of money on cooling, a finding it said was consistent with previous studies.
Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, a nonprofit group that favors weatherization, said the spending formula reflected the tension in balancing national goals with regional interests. “If you were doing it on a national basis,” Mr. Nadel said, “you’d do the most cost-effective jobs first, which would mean doing a lot in places like the Dakotas and Minnesota.”
It is this same political body that we are counting on to pay for reducing medical costs by wringing waste and inefficiency from the system. Can you say “rationing”? “Confiscatory taxes?” I thought you could.
Real estate sales histories are disappearing as quickly as their value, these days. For example, one of those Hamilton Avenue condos came on for sale today at $969,000. I seemed to recall them selling in the $1.2’s and higher back in 2003 but when I went to confirm my memory I discovered that the record’s been wiped clean. This institutional amnesia may serve sellers inone respect but it hides what is happening to the market and I think that’s bad for everyone, including sellers, who need to know where to price their house. In pre-computer days, firms kept street books that recorded every sale. If the Greenwich Association of Realtors is embarking on a Soviet – style purging and rewriting of history, I guess we’ll have t go back to paper records. That seems like a step backwards, to me.
Over on Palmer Hill Fred Durante wants to erect an 80′ cellphone tower and the neighbors are upset. Fine – although it will be disguised as a flagpole, I can understand someone objecting to a structure of that height. But at least so far as Greenwich Time could discover, opposition rests on the radio waves that will surround the tower and the various health risks, all thoroughly debunked, associated with them.
Can you imagine if the kook patrol running the country today had been in charge when electrification of the country took place last century? We’d still be using whale oil lamps. If you wonder why I don’t take Global Warming seriously, it’s because of people like these. They’re tangled in a ball of misinformation and ignorance and scared of everything. That’s not a great foundation to base policy on. But just in case, I’ll be fashioning tinfoil hats for those poor polar bears when they float down this way on the melting ice caps.
This is a perfectly nice house in Old Greenwich, built in 2004 and sold in 2005 for $1.960 million. When the present owners listed it for $2.895 last July, I suggested that its price seemed a tad steep for something that, at least according to its listing, had had nothing done to it since they bought it. I heard back on that but it concerned the sellers’ hurt feelings and nothing about the price. Well the house didn’t sell, it was yanked off the market a few months later and then put back on at $2.795 in January. Today it’s been marked down to $2.695, which is an improvement, but I, at least, think that it can go down a bit further. Of course, if there’s another out-of-town buyer out there, all bets are off, and for the sellers’ sake, I hope there is.
First to declare bankruptcy, first to eliminate welfare? There’s a reform thst should sweep east – quickly, please.
In Today’s Greenwich Time, “Decline in Home Sales Continues”
Home sales in Greenwich were down nearly 70 percent in the first third of 2009 compared with a year earlier, though real estate agents hope that with recent and upcoming closings factored in, figures in the next few months will be stronger.
There were 56 single-family home sales in the first four months of the year, compared with 168 sales during the same period of 2008, according to information from Riverside-based Shore & Country Properties.
The average sale price also fell 23 percent, from $2.8 million to $2.2 million, an amount that Shore & Country owner and partner Russell Pruner says is the largest drop since 1945, though that’s compared to full-year markets and not a four-month segment.
Realtor David Ogilvy said a four-month chunk doesn’t give a clear picture of the market, and he’s now extremely busy, selling everything from a no-frills house in Old Greenwich for $915,000 to a $23.9 million mansion that went in 10 days for close to the full asking price. [In fact, the latter, the beautifully restored Rockefeller mansion, was sold by Barabara Zaccagnini, of Coldwell Banker and Sally Maloney, of Greenwich Fine Properties, neither brokerage affiliated with David Ogilvy and Associates – Ed]
Pruner predicts that while the sales figures for May released next week won’t show much change, maybe reaching 60 percent to 65 percent of 2008, there could be a turnaround soon.
Buyers are seeing opportunity in the desirable Greenwich market that many once thought was unreachable.
Rob Pajer, one of Ward’s clients who closed a month ago on a three-bedroom home on Field Road in Riverside for $1.1 million, said he and his wife were pleasantly surprised by the number of houses that were available.
Pajer, his wife and two young children are moving from a house in Somerset County, N.J. they bought in 2002, and Pajer said he never thought they could afford living here.
“We were going to go for the gold standard, which is Greenwich,” said Pajer, 49. “We wanted to land somewhere we were going to stay.”
Pruner sees this attitude as the reason why the Greenwich market won’t be in free-fall for long.
“Greenwich is still Greenwich and people are still going to want to live here,” Pruner said. “When we are able to focus back on why people buy Greenwich, then I think you’ll see the transactions go up.”
Russ Pruner is right – there are contracts in the works (I have one of them) and sales are happening. And as Mr. Pajer from New Jersey demonstrates, there are still out-of-town buyers willing to support old -style prices. So that’s good; but I’d like to point out that I didn’t use the term “free fall” to describe our current market, Russ Pruner did. His mind must have been twiseted by this blog.
UPDATE: Sales figures are a lagging indicator – contracts tell you what’s going on now. So I just checked activity through June 7th. We have 100 sales (sales that went to contract in 2009) and pending contracts this year. That compares to 199 in 2008, when the market had started the “Pruner Free Fall” and 329 in 2007, when we were all fat, happy and dumb. I don’t disagree with Russ that Greenwich is indeed a special place to live and will always attract people who want to live here, but I am more pessimistic than some of his colleagues about how soon the rebound will arrive. I continue to believe we are in the midst of a “re-set” mode and that, once we have completed that re-set, sales will resume. But not until then and when they do, they’ll occur at the new values, not 2007s.