Daily Archives: July 18, 2009

Blumental wins one, refuses to shut up

AG gets will selling house for half its value overturned. 

The state attorney general claimed victory Friday in a legal battle stemming from 2005 that challenged the legitimacy of a sales agreement in which an elderly Greenwich woman agreed to sell her home to two men for less than half of what it was worth at the time.

Attorney General Richard Blumenthal intervened after Mona Lee Johnson, of Greenwich, agreed to sell her home, estimated to be worth $1.2 million, for $500,000, a month before she died.

The Attorney General’s Office alleged that her neighbor, Mark Lovallo, had urged Johnson to sign off on the sales option while she was sick in the hospital. The deal also included her longtime accountant, David Alfano.

That’s just fine, although the revelation that the old lady was leaving everything to the cat hospital mitigates militates* against a sense of injustice overturned, but why can’t this pomaded blowhard just stop crowing about his puny accomplishments?

“I fought successfully to stop this suspect agreement denying hundreds of thousands of dollars to charities intended to benefit from the home’s sale,” Blumenthal said. “In charity law, the donor’s wishes are paramount. This donor never wished to sell her home at a bargain-basement price, significantly slashing the proceeds to charities named in her will.”

He goes on (and on) but I won’t. I supose the presence of Blumenthal waiting in the wings is the best reason possible to return Chris Dodd to office.

* corrections by Hiram TM

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More statistics

A reader asked why April – July ’06 was so slow and my hunch was that it was due to January through March of that year being so busy. That hunch was right. Here are the numbers for contracts in the relevant periods:

Jan – Mar, 2006: 168

Jan – Mar, 2007: 184

Jan – Mar, 2008: 195

Jan – Mar, 2009: 35

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Now they tell us!

Homeownership isn’t the path to riches. On the other hand, this WSJ reporter writes, it’s served him well enough over the years.

So do I regret owning a home? Heck, no. It’s not a get-rich scheme, and Americans never should have viewed it as one. Owning a home has given my family a series of anchors to cling to as we’ve moved around the country for my job. It’s allowed us to live in pleasant neighborhoods where it would have been tough to find a rental house. And paying down a mortgage is a form of forced savings, which should help us in retirement.

Columbia Business School’s Christopher Mayer, who has studied housing markets, says our experience with home-price gains is pretty typical. Home appreciation nationally has run about 1% above inflation over time.

The big price run-ups from the late 1990s through 2006 or 2007 were an aberration. The biggest value you derive from home ownership isn’t appreciation. “It’s being able to live in it,” Prof. Mayer says, and avoiding the rent you would otherwise have to pay.

Once you add in imputed rent and subtract property taxes, Prof. Mayer estimates, my 2% annual home-ownership return looks more like 6%.

That’s why you should buy as much home as you need—but no more. A bigger home than you need isn’t an investment—it’s an extravagance, the equivalent of renting a bigger apartment than you need. You may choose to do so, but that doesn’t make it a smart move financially.

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Will Riverside’s Scott Frantz challenge Cos Cob’s Jim Himes?

That’s the rumor I’m hearing. Frantz, so it’s said, is bored to tears sitting in our state legislature (and what normal human being wouldn’t be?) and is chafing to go after Himes. Stu McKinney’s kid, a middling lawyer with no other experience that I’m aware of, is said to have failed at fund raising for his own campaign, leaving the door open for Mr. Frantz. Sound like a plan to me.

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Let’s try five days a week in Hartford

The Terminator shuts down state offices on Fridays to save cash. Like those proverbal 100 lawyers at the bottom of the East River, it’s a good start, but there’s room for improvement.

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My apologies to Jim Himes: the Stimulus worked!

Larry Summers cites Google search requests for “economic depression” back to normal, proof that the worst is over. Whew!

Er, then there’s this: Unemployment tops 10% in 16 states.

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Where are the West’s suicide bombers when we need them?

Coming to Chicago: Conference of musslemen celebrating the death of capitalism and the rise of a world-wide caliphate. Imagine, if you can, a group of capitalists holding a similar conference in Tehran. Ah, but the musselmen’s is a religion of peace and tolerance!

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Big House Activity

In the past ten years, 612 single family houses with asking prices above $5 million have sold in Greenwich. As of today, we have 171 in that price range listed for sale. Here’s how they’ve done,(by contract date):

4/01/09 – 7/18/09: 19

4/01/08 – 7/18/08: 21

4/01/07 – 7/18/07: 39

4/01/06 – 7/18/06: 24

$7,750,000 and up:

Inventory: 75

4/01/09 – 7/18/09: 8

4/01/08 – 7/18/08: 11

4/01/07 – 7/18/07: 20

4/01/06 – 7/18/06: 9

$10,000,000 and up

Inventory: 43

4/01/09 – 7/18/09: 5

4/01/08 – 7/18/08: 3

4/01/07 – 7/18/07: 12

4/01/06 – 7/18/06: 4

So we’re looking at about three years of inventory, assuming no new listings come on before 2012. If you don’t have to sell your house soon, this is perfect. If you do, you may want to check your price and make sure it sells at the beginning of that term, not the end. It’s up to you, naturally.

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This is not necessarily a bad idea – in fact, it makes sense

Slowly, energy efficiency making its way into building codes. Buyers won’t voluntarily pay much, if anything, for energy saving features in a home (they say they will, but believe me, they don’t). That’s probably a rational economic decision concerning a feature that may take ten years or more to pay back its cost when the buyer plans to stay in a house for just five.

But the house itself doesn’t go anywhere and, over decades, a poorly insulated house wastes a huge amount of energy. So building codes that force builders of new homes to install efficient windows, boilers and the proper amount of insulation make sense from a national policy view. I worry about the provisions in the Obama/Himes Carbon Tax bill that call for mandatory code changes for existing homes – seems like over-reaching to me, but regulating new construction seems sound. Of course, like every regulation of this sort, it will drive up the cost of housing but there you have it.

I heard a fellow on NPR the other morning explaining how, by hiring some energy audit company for $600 to seal his house, pump forced air into it and then run around caulkig and sealing leaks, his house was 50% more efficient, which was an improvement greater than he’d have achieved had he spent $30,000 for new windows. I won’t vouch for his numbers but it is certainly true that, for not much money, you can save a bundle of money and increase the comfort of your home by eliminating drafts and air leaks. Have I done that in my home? Ask me next year.

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We should eat foie gras, maybe?

Hotdog vendor forced from his station. I also heard that Cardillo’s Deli in Cos Cob has lost its lease and has to close in two weeks. Thank God for all the private clubs with reciprocal dining privileges in town – we need never go hungry. I do worry about the Little People, though (and of course, Cos Cobber).

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Yes, someone grabbed YMCA members’ wallets

Police investigate inappropriate touching by YMCA employee.

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Make of these what you will

Sales and contract statistics, single family homes, Greenwich

Contract Date:

4/01/09 – 7/18/09:  123

4/01/08  – 7/18/08: 166

4/01/07 – 7/18/07: 221

4/01/06 – 7/18/06: 219

 

6/01/09 – 7/18/09: 63

6/01/08 – 7/18/08: 78

6/01/07 – 7/18/07: 89

6/10/06 – 7/18/06: 82

 

July 1-18, 2009: 25

July 1-18, 2008: 29

July 1-18, 2007: 20

July 1-18, 2006: 16

So we’re definitely seeing an uptick in contracts this July, partly because, I think, so few buyers went to contract in our normal spring market of mid-January to April. Too many are still in contract to have useful data on final sales prices but I’m seeing many, many houses sell for a fraction of what they first asked and leas than they were bought for. It could be that this month’s activity is merely a reflection of pent up demand and is no more than the spring market come late. Or, and this is what I hope, we’re seeing sellers adjustingtheir prices significantly downward and moving their houses. If it’s the latter, then we can expect to see sales continue and even build. Which would be nice.

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