So we have something like 100+ spec houses for sale and are moving through them at a pace that should exhaust supply in five or six years. These houses were mostly built using commercial loans, with personal guarantees signed by the principals. It seems obvious to some of us that a lot of these projects are in trouble, won’t sell for what the builder needs even to break even and will eventually result in default, reversion of title to the lender and a personal judgment against the guarantors. So wouldn’t a builder jump at the chance to bail out and walk away owing nothing?
In short, no. Builders are incurable optimists – that’s how they became spec builders in the first place- and they seem convinced that, all evidence to the contrary, if they can just hang on, maybe for as little as six months, there’s is the house that will sell at a fat profit. It’s the other guys who are going down.
We have approached agents for a number of such builders, and offered to get their clients out owing nothing. So far, no takers, even as some of these guys lose their projects to the bank, even though loans are no longer being rolled over, even though doomsday approaches. So okay, we’ll deal with the banks later. Eventually, all these homes will find buyers. I have no confidence that any of them, will sell for a price that makes the builder whole but denial is a powerful force, one that trumps logic, every time.
UPDATE: A skeptical reader quite justifiably questioned my figure of “100+ spec houses” and asked whether that included condo’s. That’s an understandable question but no, we have 104 houses listed built in 2007 or later all of which, or almost all – I did a quick skim – are specs and vacant. The reader also suggested that there were some well priced houses mixed in with these projects but again, doing a quick skim, I disagree. Nothing looks to my eye as though it will sell for even close to current asking price, notwithstanding that some of these have already taken multi-million dollar price cuts. The low priced end – Havemeyer Lane, for instance, or McCarthur, are looking for $1.5ish long past the day when that level could be attained in that neighborhood. And of the 72 houses priced over $3 million, good luck to all.
U.S. Representative calls Michael Jackson a “lowlife” and a “pervert”, says media is shaming itself devoting so much coverage (24 hours a days, it seems). Well yes, that’s all true, Mr. King, but if they didn’t divert the mobs’ attention to this circus they’d have to cover real news, and there’s no market for that.
If he wants an honest window washer, that is. An elderly friend of mine made out a check to “cash” for $1,000 and promptly dropped it on the street. It was just as promptly returned by Mr. Stuart Hemby, who owns Clearview Window Washers (914)575-7102. Now, I don’t know how much window washers make but I suspect that’s entirely irrelevant to a man like Mr. Hemby – an honest man is just that, always – but there are folks out there who might have been tempted to pocket that kind of easy money.
It’s always been my experience that honest people also provide honest labor for their pay, too, so I certainly intend to hire the man and you might want to retain his number for when you need him. He also does power washing and gutter cleaning, so there you go. I’m tremendously impressed.
Midget Mexican wrestlers poisoned by bar hookers. On second thought, I’ll have a dose of Swine Flu, please.
Nothing came up that was exciting after this morning’s four contracts. A lot of over-due price reductions, some new listings that aren’t getting me busy emailing, although perhaps someone else will be stirred into action, and that’s it. Tomorrow’s open house list as of close of business today is … nothing. Summer is here and it seems the agents have given up. Too bad, because buyers haven’t. We do have those Steamboat Road condos offering champagne at 4:00 pm but I don’t drink champagne and I have a feeling I’d need some in order to overlook the $8.5 million price tags and find something nice to say about them. So I believe I’ll give them a pass and come back next year.
I love my new iPhone but I am experiencing the same problem ther users are: the battery life sucks. The phone is twice as fast at Internet linkups as my gen 1 phone, as promised, but battery life is abut half that of the earlier version, if that. Apple had claimed it had improved battery life but the exact opposite is true. There’s hope that it’s a software glitch, which can be fixed. Otherwise, a great phone is going to be pretty useless – if you can’t get through a day on a single charge, what good is it?
Word has it that this Milbrook property was purchased by the lender, but you wouldn’t know that from what’s reported on the MLS today so let’s play it straight. Purchased for $3.780 in 2004, listed for $4.895 in 2006, sold Friday for $2.5 million. assessed value $2.311. Regardless of who bought it, its going to play hell with comparable Milbrook values.
A reader asked about this. Here they are:
25 Lower Cross, $45,000,000. Selling agent, David Ogilvy
30 John Street, $30,000,000. Selling agent, Louise Andren
109 Byram Shore Rd. $28,500,000. Selling agent, Tamar Lurie
34 Indian Point (Rvsd) $21,800,000. Selling agent, Gideon Fountain
If you’re curious, those are all time sales. We presently have eight houses asking more than $20,000,000 up for sale. Presumably, their owners are in no hurry to sell.
Obama has started an anti-trust investigation into Apple’s iPhone deal with AT&T because it’s too successful and making money. This is standard procedure for communists but it might be well to look back on how that partnership came about: Apple came up with a new idea for cellphones but no major carrier wanted it. They were too busy making money hand-over-fist with their existent, obsolete technology and refused to spend money improving their product so they all: Verizon, nextel and Sprint all turned Apple down. They had complete control over what their phones did, how they did it and when change would come (never).
Only AT&T, desperate to grow market share, took the gamble and agreed to accept the iPhone. AT&T had to rebuild its system to accommodate it, at huge expense, and if it had failed, that money would have been lost. It didn’t fail, of course, and Apple is now credited with forcing cell phone carriers and manufacturers to try to meet Apple’s standards. Those competitors are screaming that they’ve been treated unfairly. Given the Obama plan of the state owning all industry, how long do you think it would take the government to invent and market an iPhone? Hint: we’re still using stamps down at the Post Office.
After Thursday’s ten reported contracts, certainly a record in these dismal times, we’ve seen four contracts today and twoare significant. 98 Lower Cross Road, listed (by Gideon Fountain) for $2.195 and Joe Barbieri’s 45 Byram Shore Road, listed at $10.995 million. This is real money and Joe’s is one of the few to break the $5 million mark this year. Congratulations, gentlemen.
The Antares Boys kiss and make up
11 Langhorne, that hideous, 30,000 sq. ft. shell of a building put up by the Antares Boys never did fetch the $28 million they dreamed of but some fool did pay $13.750 million for it last September, for reasons known only to him and perhaps his psychiatrist. The new owner busied himself with bulldozers for a short spell but then quit and the last I saw, the 8 acres were still mostly rubble, albeit with higher piles of rubble than before.
Something must have happened to curb the buyer’s enthusiasm because he’s place it back on the market today for $14.5 million. In this day of pessimism and downright cynicism, it’s positively refreshing to see that someone still believes in the greater fool principle. God bless him.
UPDATE: Cos Cobber doesn’t like pictures of the Boys posing as German policemen and demands a picture relevant to the story. Well, Langhorne was purchased by a hedgefund, Quadrum Capital Management, and at least one commentator on Dealbreaker says that the young lady pictured below works there. That’s the best I can do, CC.
Maria Dominguez - hedge funder?
The one consolation I found in Obama’s victory last fall was that the liberals could finally enact all of their plans for a just, prosperous society and, if they worked, then I’d be proved wrong but living in a great new world, or they’d be proved wrong and we’d have at least a decade of sanity before people forgot the lesson, just as Eastern Europe did. We’re still at just the beginning of the new Great Society, but here’s an article on GM’s decision to start a new plant in Michigan that offers everything the liberals want.
Economics played no role in the decision, but “people’s needs”, carbon footprints” and “societal concerns” trumped all. The model car to be produced was dictated by Washington: a small gas-sipper. The fact that no one, not even the Japanese, can build these tiny cars for a profit in the USA was deemed of no concern, and their manufacture in China was nixed immediately by GM’s new owner, the United Auto Workers. The least costly states in which to place the plant were also vetoed in favor of Michigan because that’s where Washington wanted it.
So an environmentally – sound car will be produced at a loss by union workers in the most depressed industrial state in the country. The greens win, labor wins, Michigan wins, the taxpayers lose. Will this bring about the prosperity promised by the dreamers? We will see.
Faced with an energy – efficiency standard mandated by Congress in 2007, incandescent bulbs were expected to give way to compact fluorescent bulbs beginning in 2012. But hold on, scientists are coming up with ways to comply with the new rules, which is good, because consumers hate cfls and with good reason. This development is being hailed as a triumph of the idea that Congress passes a law and inventors will perform on order and I suppose it is, if you don’t mind paying five dollars for what used to be a twenty-five cents bulb.
One twist: years ago we real estate lawyers used to laugh at the despicable sellers who removed all the lightbulbs from the house the day of closing (the same type took toilet paper and paper towels, too). But if bulbs are going to approach the price of gold, I can see the day that our standard contract will have to provide for who gets them, buyer or seller.
9 Boulder Brook
This house on Boulder Brook is a handsome project, built by one of Greenwich’s best, York Construction. Unfortunately for York, it was finished just after the time for record houses prices on a street were past. Originally $6.750, it dropped in stages to $6.450 in April of this year, then was raised to $7.325 and dropped to $6.325 the same day – scrivner’s error or an effort to create the impression of a huge price cut, I don’t know. It didn’t work in either case and today it’s been cut to $5.3 million. In 2007, that would have been a good price.
Google is going to add real estate listings to its maps, with free downloads available to agents and groups like the GAR. Zillow and Trulia may find this disturbing, local monopolistic groups like my own are going to freak. Google has rolled it out in Australia but plans to bring it to our shores soon. This quote from an Australian realtor could just as easily come from some brokers here in Greenwich:
Australia’s leading real estate listing service domain.com.au has refused to join Google. John Brand, the company’s general manager tells The Age:
“We are quite confident that we provide a better service than Google is offering,” he said in a telephone interview. “We are a specialist property portal and we think this will stand us in good stead going forward.”
46 Terrace Ave. Rvsd
Assessed value, $1.024. Sold for $902,000 in 2003, completely gutted and redone and resold for $1.775 million in 2004. Resold again for $1.925 in 2007, sold Friday for $1.425. Nothing to see here, move along, move along.
I may be insane, but I won't go hungry!
I’ll confess to having had a grudging admiration for Sarah Palin last fall. Feisty moose hunter, scrabbling her way up through Alaska’s political world to become Governor and all that. If she believed that cavemen rode dinosaurs well, I watched the Flintstones in my childhood and perhaps if my education had stopped at 3rd Grade I’d believe in cartoons too.
But her rambling quitting speech last week was truly gob smacking. “Only dead fish go with the flow?” “Sure, I could take 18 months off and live on the taxpayers’ money but that’s not the way I am”? What the hell was this woman talking about? No one I know was advising her to spend the next year and a half in a Paris bistro – they expected her to serve as Governor, as she said she would. The entire speech was so disjointed and nonsensical that I actually felt better knowing that Joe Biden was down in Washington ready to take command if necessary. Joe Biden! When you make the hair-plug King look good, it is indeed time to quit. Perhaps Palin recognized this.