Daily Archives: September 21, 2009

Bargain on Sawmill?

40 Sawmill

40 Sawmill

This house sold new in 2006 for $6 million and was put back up for sale last year for $5.995. It sold today for $4.525. That’s only about a 25% hit which isn’t so bad for this market. But I think almost new homes are holding up better in price than older ones.

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How desperate is Coldwell Banker Old Greenwich? This desperate

I have just heard from Coldwell Banker’s office manager that, while they have received a rental commission from their customer, they will not be paying me my half, the enormous sum of $1,600. Now ordinarily I would just take this up with my board of realtors – Coldwell Banker has violated the rules and regulations of that association by promising to pay a commission and then reneging –  but I stopped myself, and thought, what would Obama do? Complain that a large company, on the verge of bankruptcy, can’t pay even a token amount like this? Complain that the listing agent Sally Parris, only last year voted Greenwich Real Estate Agent of the Year, is now scrambling for pennies and refusing to pay her debts? No. Not Obama. He would take pity on these people, he would offer a loving heart and an open hand and if my president would do that, can I do less?

I think not. So here is an appeal – please, pleaseimmediately list your house with Sally at her branch of Coldwell Banker. Of course, if she can’t pay back money owed to someone else, she won’t be able to afford to advertise your house, but so what? What is charity for? Bring a checkbook to prepay for your advertizing. And if you still have some, bring cash too – scatter dimes on their doorstep, drop by with a hot coffee and a smile, and just help them all feel better. I myself am thinking I could help by setting up a donation booth in front of their office on Wednesday. If I do, I’ll announce it here. Be sure to drop by and contribute.

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What’s a Weaver Street worth?

156 Weaver Street

156 Weaver Street

More than I think, according to this listing, reduced today to $2.850 from $3.350 million. It certainly looks like a nice house, and it’s located on Lyon Farm, away from the street, I presume. Built in 1998, the owner paid $1.575 for it in 2003 and now her heirs are looking for substantially more. Will they get it? Beats me. I’ve never associated Weaver Street with a $3 in front of it and in fact, when I checked sales records for the street, the only house I could find that started above $3: #127, at $3.250 in 07, sold for $2 million in ’08. After that, it’s down hill, all (substantially) below $2 million. Assessment for this one is $1.727, if you pay attention to such things.

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Take this house and shove it

“Strategic defaults” – people with the ability to pay who simply walk away from their house and their mortgage – are on the rise. The rate doubled in 2008 from 2007 and now such defaults make up 18% of all “seriously delinquent” (60 days late or more) loans. Not surprisingly, the bulk of these borrowers are financially savvy and can calculate the relative costs of damaging their credit and being freed from, say, a $500,000 debt. Turns out, the better the original credit score, the more likely the borrower is to become a strategic defaulter.

Will this hit Greenwich? I don’t know – it’s been awhile since I played mortgage lawyer but Connecticut  law used to (and still does, so far as I know) permit a suit for a deficiency judgment against defaulting borrowers. Other states apparently force the lender to accept the house as full payment. If you have other assets that the bank can chase, walking away from your house won’t be as appealing here as in other states, but maybe you’ve used up your other assets trying to stay in your house and there’s nothing else to grab. In that case, go for it.

That, of course, is just what we need: another 400 homes in inventory, all bank-owned.

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And now, a contract

Not much of one, unless you’re the seller or buyer, but 40 Meyer Place, a Riverside bungalow “convenient to transportation” as we like to say, started at $1.095 million (!), dropped to $995 and is reported under contract today. But what will the winning price be? The town says $853 – personally, I’d think this was a case for going below the assessed value by a large margin but never underestimate the draw of Riverside south of the Post Road, even if your neighbors are New England Motor Freight drivers roaring by. I’ll let you know what this sells for, when it closes.

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A sale! A sale!

18 Hedgerow

18 Hedgerow

To be honest, I wasn’t wild about this house when it came on in March at $4 million. Too close to Lake Avenue, kind of tired, kind of blah. But Joe Barbieri, who seems determined to sell every house that’s sold this year, found a buyer for it at $3.175 and it sold today. The sales  price is better than the ask, but I’m still not enthusiastic – which is why Joe is bombing around town in a Bentley convertible while I’m in my Honda.

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What, fraud on Wall Street?

That’s what the federal government alleges and it’s putting two Bear Stearns (guilty!) hedge fund heads on trial next week to prove it. I’ve always considered Bear Stearns to have been a continuing criminal enterprise but they were hardly alone down there in the canyons. Here’s my latest favorite story about those glorious days, told to me by a client who should know. A junior Lehman exec approaches his boss with a loan proposal for $100 million.

Boss: “Is it any good?”

Jr. Ex. “Hell no, it’s a piece of shit”

Boss: “Can we sell it?”

Jr. “In a heartbeat”

Boss: “Do it.”

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Patriot Bank – Why is this place still in business?

From this data, it would seem that our  local bank should have been put out of its misery long ago. What’s keeping it afloat? Bigger fish for the OCC to fry? A belief in the restorative powers of magic beans? The mind boggles.

HOW HEALTHY IS THIS BANK?

Patriot National Bank

Stamford, CT

Note: The Federal Deosit Insurance Corp. insures deposit accounts up to $250,000. The “troubled asset ratio” is not an FDIC statistic. It is derived by adding the amounts of loans past due 90 days or more, loans in non-accrual status and other real estate owned (primarily properties obtained through foreclosure) and dividing that amount by the bank’s capital and loan loss reserves. It is reported as a percentage. For example, a bank with $100,000 in “troubled assets” and $1,000,000 in capital would have a “troubled asset ratio” of 10 percent. For a fuller explanation, see our methodology.

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Brokers stage fire sale

My goodness, the stories of bad broker behavior  (that would be BBB) just keep on coming. Here’s a California couple that turned to arson to get their money. We’re going to have to work on those ethics classes in broker continuing education.

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Fire sale up at Conyers?

5 Conyers farm
5 Conyers farm

Hardly – it’s still fetching some big prices (but there’s one up there that I heard turned down $18 million a few years ago and is now asking $13, so sometimes even captains of industry do some boneheaded things), but I find this house, cut today to $9.7 million from $12.5 (2008 price) interesting. The seller paid $4.6 for it in 2002 and added on a bit but not enough, perhaps, to justify trebling its price. The town’s got it pegged at $5.676. Wouldn’t it be fun if it sold for that? Imagine what such a sale would do to other properties in lesser locations in that price range. Hmmm.

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Governor Dodo

Our Republican governor Jodi Rell did herself no good when she abdicated her role as chief executive. If you recall (it was a few weeks ago, so you’re forgiven if you can’t), she refused to sign the Democrat’s budget but also declined to veto it, letting it pass into law automatically. Now the latest polls say voters of both parties, regardless of their opinion of the Democrat’s plan, are disgusted with Rell’s spinelessness. I agree: what the hell is she doing in Hartford occupying desk space if she can’t act?

Further bad news, if she needed any, came from the recent Hartford Courant revelation that, three hours before she took to the airwaves to announce that she wouldn’t sign the bill but would use her line-item-veto to whack into shape (a grand total of $8 million from $37 billion – what a warrior!), she was advised by her legal counsel that she wouldn’t be able to veto anything if she didn’t sign the budget. She went ahead anyway, grabbed her headlines and a week later expressed huge surprise when Dick Blumenthal repeated the opinion her own counsel had supplied. Similar to then-Governor Lowell Weiker’s shocked discovery that the bill he’d enacted as a Senator creating the Mashantucket Indians permitted gambling in Connecticut. Gambling! Who knew?

Bah.

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Here’s a bellwether, perhaps

123 Valley Drive

123 Valley Drive

This house, over in that awkward location between the Greenwich post office and Glenville Road, was bought new (or so I believe – data has been deleted) in 1998 for $1.405. It’s on an acre, no pool, with plenty of rooms – a pretty typical Greenwich offering I think – nothing particularly special about its construction or location but not bad, either. It started at $3.2 million last spring and has been marked down to $2.950 today. The assessment is $1.8 million. So it will be interesting to see, when and if this sells, what it goes for. I’m guessing that its final price will be closer to the assessment than the current price, but who knows? But if it’s as typical a house as I believe, it will tell owners on, say, Stanwich, what to expect.

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We’ve only just begun

skinny bitchesPeople ask if the worst is over for Greenwich real estate and while there are some who answer in the affirmative, I don’t think we’ve seen anything but the start of a major retrenchment. Case in point: Lyon Farm condominiums. These units have been plummeting in value the past year and I think they’re still falling. 214 West Lyon, which sold in a bidding war (all of $5,000 over ask, but still) for $1.750 million in 2005 is listed today forn$1.295. And that’s just the opening price – assessed value is $1.149.

A random sample of the 687 single family houses for sale reveals plenty of price cuts but, to my eye, they’re still over-priced. Worse, when you check their history and see what they were bought for, most are underwater and will require the seller to come up with hundreds of thousands of dollars at closing or the cooperation of an understanding bank. Banks are not being cooperative and when they grudgingly do agree to take a loss on their loan, they take months to do so. So what will be selling in the immediate future? Not much, I suspect.

I have to sign off now – got to case a few ATM machines.

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If Ron Kuby’s representing him, he’s guilty as charged

FBI arrests NYC imam for tipping off Colorado bomber. This (mussleman) man of peace was supposed to be our ally in the war against terrorism and his lawyer, Ron Kuby, says he’s innocent. That tells me all I need to know.

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But it was stimulating, briefly

Car dealerships empty again after cash for clunkers ends. That’s what every economist (and a bunch of economically illiterate bloggers) predicted, but so what? As one of my liberal friends insisted, “at least the factories are running again”. Well no, they aren’t. We created an artificial demand and conflated six months of sales into one, and now the air’s out of the balloon. I stopped by the Cadillac dealership last week (I know, from a VW microbus to a Cadillac?! But that new CTS sportswagon looks pretty cool) and the only salesman in the place said business was dead. Sure looked that way to me.

Along the same lines, and as noted last week, the NAR and various other groups are pushing Congress to extend the new buyer credit and to double it. If 80% of all new mortgages are now issued by the government and taxpayers are subsidizing buyers, is that real demand or artificial? I know the answer to that one, but don’t count on Congress doing the right thing.

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