Frankie Futter, back from a visit to Hartford, reports that the state of Connecticut’s Department of Economic and Community Development ran out of paper in May and cannot buy more until the middle of July. They’re reduced to scrawling notes on toilet paper and napkins until then and, by law, staffers are forbidden to go to Staples, buy a ream of copy paper and contribute it to the cause. Now if the Legislature’s cellphone service is running on the same plan, we’re in for a peaceful month.
Daily Archives: June 9, 2009
Cindy Sheehan leads protest march outside of GW’s Texas home. I am not making this up – the poor lady has lost all purpose in life and is reduced to wandering the Texas desert, looking for …?
Total activity reported today: one sale: $16.5 sold, $25 million ask; 2 contracts : land, marked down from $8.5 to $3.8, Bank owned, $499,000; 11 price cuts on single family homes, 11 new listings for single family homes.
And that’s all, folks. Well, there’s always the fall market to look forward to.
Here are some fun facts to chew on while we’re waiting for anything, anything at all, to heppen in our real estate market.
Jan.- June, 2006 371 July – Dec. 251
Jan. – June, 2007 329 July – Dec. 214
Jan. – June, 2008 242 July – Dec. 112
Year to date, 2009: 100
UPDATE: at the suggestion of a reader, here’s what happened in the $3 – $5 million range.
2006 – 118
2007 – 112
2008 – 57
y.t.d. – 7
We have 160 active single family residences for sale between $3 and $5 million. 29 are spec houses.
UPDATE: David Ayers, the realtor who knows everything worth knowing, emailed me to correct my figures and said there have been 9, not seven, houses that have gone to contract this year in the $3 – $5 million range. Not that I doubted him but I checked to see where I went wrong and came up with 12 (!). David, what am I doing wrong this time?
A now former friend is furious that I took the liberty of posting a Fountain family photo and saying it was him. He was offended because, as a very important person with a carefully cultivated image to maintain, he would never show up at a formal occasion like the Riverside Yacht Club Annual Commissioning in such casual garb and, further, his own boats are much grander than the dugout my family makes do with. So with deepest, and most sincere apologies, I post the picture again but this time properly labelled.
An agent at Cleaveland, Duble & Arnold has found a buyer for 38 Khakum Wood Drive, the 3 acre parcel (in an R-2 zone) that Scott Lawlor paid $4.8 million for back in 2005. Lawlor excavated a foundation for a 16,000 sq. ft. house, installed a drainage system and got permits for the house, a pool and, for all I know, a heliport, then lost interest in the plan and relisted the property for $8.5 million in June, 2007. My guess is that no one was interested in building a 16,000 sq. ft. house on this site, even if there was already a foundation, but in any event, the price has been dropping as Lawlor and his real estate investment firm, Broadway Partners, fell on hard times. In May, just after Broadway took a $600 million hit on their brief ownership of the John Hancock building in Boston, Lawlor dropped the price on Kahakum Wood to a mere $3.8 million. No word yet on what the buyer is paying, but I’m sure he found the seller to be flexible.
Tesla delivers its 500th car. I will shock regular readers by confessing that I am a contrarian by nature, but this whole enthusiasm for electric cars strikes me as over-wrought, fueled more by enthusiasm than thought. Electricity must be generated – that takes some form of fuel and, so far, that fuel is fossil. The materials for the batteries in these cars is mined in Canada, at great cost to the environment, shipped for assembly in China, and then brought back here to power toys for rich men. I remains skeptical that we’re seeing even the start of a revolution here.
But the Tesla looks cool, I will admit.
Bloomberg’s David Glovin’s got the coverage. Here’s a bit from yesterday’s session:
Thomas Farrell, a top Kozeny aide in Azerbaijan, admitted on cross-examination today that he helped Kozeny steal as much as $80 million from another investor in the deal, hedge fund Omega Advisors Inc. Defense lawyers sought to show that Farrell, who testified last week that Bourke was aware of the bribery scheme, is corrupt and shouldn’t be trusted, and that Bourke is a victim of Kozeny’s alleged fraud and not a wrongdoer.
Was Kozeny using money from Omega “for his own personal expenses?” defense attorney John Cline asked Farrell during a two-hour cross-examination.
“I helped him do it,” said Farrell, who pleaded guilty in the case and is testifying in exchange for leniency.
Farrell was also peppered with questions from Cline suggesting he got a sweetheart deal from prosecutors in exchange for his testimony.
Farrell told Cline that the U.S. government hasn’t forced him to return $700,000 in secret bonuses he received from Kozeny and that he’s been allowed to travel between the U.S. and Russia, where he lives. Farrell hasn’t been sentenced and may be ordered to serve prison time or pay a fine.
$350 Million Deal
Bourke was one of about a dozen investors in Kozeny’s $350 million deal to buy the oil company, known as Socar. He is accused of conspiring with Kozeny in violation of the U.S. Foreign Corrupt Practices Act. Kozeny, a Czech national who also was charged, is a fugitive living in the Bahamas.
Bourke denies knowing of the bribes and says Kozeny stole more than $180 million from Omega and other investors, including $8 million from him. Azerbaijan never sold the oil company, wiping out the investments. Bourke says he complained to Azeri leaders after discovering Kozeny’s theft and claims he wouldn’t have complained had he been involved in Kozeny’s bribery scheme.
Farrell said he helped Kozeny cheat Omega by sending falsified documents to the hedge fund. He said Kozeny used Omega’s funds to pay for his plane and yacht and a home in Aspen, Colorado. Farrell acknowledged that part of a bonus paid to him and a co-worker may have come from Omega’s money.
When asked about a bonus, Kozeny replied, “Why don’t you guys just split $1 million,” Farrell testified.
Also today, Cline sought to show that Kozeny paid other accomplices millions of dollars in secret kickbacks. The defense will argue that Bourke, unlike the accomplices, received nothing from Kozeny. Cline also challenged Farrell about inconsistencies in earlier statements to prosecutors.
Farrell concluded his testimony today. He lives in St. Petersburg, Russia, where he’s an investor in a bar owned by a former Kozeny bodyguard.
The case is U.S. v. Bourke, 05-cr-00518, U.S. District Court, Southern District of New York (Manhattan).
Musslemen terrorists plead guilty in German bombing plot. “Bored with proceedings”.
I liked this house in Cos Cob when I saw it last fall – an acre and a quarter of very nice yard and a house that, while not updated, is completely livable. It started at $1.495, which wasn’t crazy, and today it’s dropped to $1.245. The sellers paid $1.045 for it in December, 2002, the 70% rule shows a value of around $1.1, so I’d think a bit of sharp negotiating would yield an excellent buy. It’s not for everyone, of course, but if I wanted a sunny, bright house with a great yard and lots of privacy in the one million range, I’d certainly look at this. Ken Yorke at Surf & Turf has the listing but any member of the MLS, including your agent, can show it, naturally.
253 Round Hill Road is officially a statistic as of a few minutes ago. List price, $25 million, days on market, 350, sales price, $16.5 million. That’s actually impressive – I don’t know anyone (aside, perhaps, from the builder) who expected this place to trade anywhere near its asking price so $16.5, while a hefty 36% off its official price, ain’t bad. It’s nice to know someone still has money to play with.
Other than that bit of unfinished business, the GMLS is close to dormant this morning – a scattering of insignificant price cuts, one or two overpriced new listings and the pending sale of a bank owned property at 11 Green Lane, listed at $499,000. I’m heading off to call clients and maybe the market will have stirred when I return.
Greenwichroundup prints a press release from Halstead Realty announcing that they’re moving into Greenwich and will be employing former Country Living agents. The good ones all moved on when Country Living shut down its local operations but I suppose this might bring Chris Finlay back to town.
The press release says that the firm’s Greenwich offices will be located at 2 Sound Shore Drive – I don’t know whether they’ll be occupying Walter Noel’s Fairfield Greenwich Groups vacated space, but it would interesting if they did. It’s not that there are ghosts, just as Andy Kissel’s ghost is surely gone from the basement of 8 Dairy Road, where Mark mariani has an unsold spec house, but there’s bound to be a lingering aura.
What does Halstead bring that we didn’t have before?
“Halstead Property Country Living will offer clients something that was seriously lacking in the suburban community-the opportunity to market properties powerfully and effectively to a wider range of potential buyers.”
Clusterstock has a cheerful little chart showing that the current world economic decline is perfectly matching the decline seen in the Great Depression. Plenty of time for things to get better, of course – in fact, the June portion of the chart shows a slight straightening and if that continues, rather than curl downward again, we’re off to the races, but still something to contemplate on a gloomy grey day.
If you look hard enough, you can find some green shoots, but here’s the truth. The decline in world industrial output is tracking very close with what we saw during the Depression. This chart was put together by economists Barry Eichengreen and Kevin O’Rourke, as part of a broader study comparing this downturn with the Great Depression. The good news, they say: The policy response has been much better this time around.
Well, this blog may not have an affect on real estate prices but it seems to have a bit of sway in getting the GAR to enforce its reporting rules. After another broker brought to the Board’s attention that 253 Round Hill Road’s sale has not been reported even though it closed a week ago tomorrow, a call was made to the laggard listing agency and presto, the reporting form was found resting right next to the fax machine. It’s on its way.
In fairness to the Board, they can’t monitor every single transaction’s sales agreement to discover when closings are scheduled. They rely on their own members’ cooperation and compliance with the rules (which require that transactions be reported no more than 48 hours after closing). If someone slips up, either deliberately or inadvertently, the Board won’t know about it unlsess and until someone complains. Well, someone has, and the problem has been addressed.
So why wasn’t it reported in the first place? It could be that the listing agent was saving this sale to combine for a splashy combination in a few days – look! We’re selling up a storm! – but more likely it was due to inattention and poor record keeping, with no deliberate rule evasion intended.
UPDATE: well, maybe it wasn’t sitting by the fax machine. An hour later, the sale is stil unreported. Someone steal the crayons down on Arch Street?
NYC area foreclosures selling at 10% of peak pricing. That’s what Craines says, but, like sheep, they’re awful liars (apologies to Jeremy Kaye for stealing his punchline). Now, “New York City area” includes Newark and Staten Island and last time I checked, we’re like neither, but foreclosures don’t help sustain current market values and foreclosures, just like Santa, are coming to town. And probably a lot sooner than the fat old guy will.
Despite vigorous opposition by Riverside resident Franklin Bloomer, the next 10-year plan of development passed the RTM last night. This isn’t an issue I spend much thought on, although I’m sure I should, because it’s advisory and, past history suggests, mostly ignored. Nevertheless, opponents faulted it for failing to ban attics permanently and refusing to adopt Bloomer’s command that car ownership be restricted to one per household, with at least one bicycle available for each resident. After the vote Bloomer, clearly miffed, rode away on his own bike. We tried to interview him but he apparently couldn’t hear us over the roar of the baseball cards in his spokes.
Deal Book has an excellent post on the legal issue being fought out before the Supreme Court in the Chrysler bankruptcy. At stake: our Constitution’s protection for creditors vs. the political desire to reward labor unions. The author hints that the Court may let the deal proceed while examining the issue at its leisure, since Fiat doesn’t really have any concern here – they’ll get the company either way, either with the union placated or the creditors. This hunch is supported by Fiat’s announcement today that they still want to go through with the deal, regardless of the Supreme Court’s review. I think the Constitution wins this one.
Credit Suisse fugitive Julian Tzolov skipped bail and is probably back in Eastern Europe, where he first crawled out from under a rock. This leaves his girlfriend’s brother and another friend holding the bag, but not, as of yesterday, their homes. Federal judge Weinstein (local developer Seth Weinstein’s father, just as a curiosity) has ordered their property forfeited. I know Andres hasn’t been indicted for money laundering yet, Walt, and I’m aware of the $10 million lien on the 175 Round Hill Road cottage sucked three times its value into the vacuum of space, but you just can’t be too careful here. If Andres asks, maybe you can direct him to Ric’s Place on Fort Hill Lane. Now there’s some equity.
This very attractive brick house up on Corrigan (off of Cliffdale, off of Riversville or King) is hosting a broker open house today – I suspect the thunderstorms will just add to the builder’s woes, and here’s why. It’s priced at $3.250 million, which is fairly steep for this location and this market, and the listing notes that “House not complete, sold as is. Aprox. $350,000 to finish, Buyer to complete”. Ow.
First of all, it’s complicated and expensive to persuade a builder to finish an abandoned project. They don’t know how it was made, and what errors, if any, were built in. They’ll add a premium to their cost, if they’ll agree to do it at all (in this market, someone will) and you can forget about them warrantying somebody else’s work. So $350,000 is probably optimistic.
Second, the builder is a guy from Yonkers. He could be a terrific individual, but if he doesn’t have a local track record, that’s a problem.
Third, it seems that the fellow from Yonkers has run out of money and is hoping a buyer will bail him out before he loses this place to the bank. I don’t want to seem cold blooded, but if you were interested in living in this location, in this house, you’d be better off having your agent track down the lender and initiate negotiations. The bank is probably eager to cut its losses on this deal, and will probably be receptive to taking a haircut. If you take this route, I’ll toss out a starting point for negotiations: the value of a four acre building lot up here should start with a one. Go up or down from there – I’d go down.