Daily Archives: January 11, 2010

No, this is not the famous wig worn by a top Greenwich Realtor

But is must come from the same pet store.

Wanna buy a house?

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AP analysis: billions spent on road work did nothing to dent unemployment

The Associated Press says that despite the billions poured into road work and such, unemployment was unaffected.

WASHINGTON (AP) — Ten months into PresidentBarack Obama‘s first economic stimulus plan, a surge in spending on U.S. roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it did not matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.”

AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy has not affected unemployment rates so far. And there id concern itwill not work the second time. For its analysis, the AP examined the effects of road and bridge spending in communities on local unemployment; it did not try to measure results of the broader aid that also was in the first stimulus like tax cuts, unemployment benefits or money for states.

“My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who reviewed AP’s analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

“As a policy tool for creating jobs, this doesn’t seem to have much bite,” said Emory Universityeconomist Thomas Smith, who supported the stimulus and reviewed AP’s analysis. “In terms of creating jobs, it doesn’t seem like it’s created very many. It may well be employing lots of people but those two things are very different.”

“It would be unlikely that even $20 billion spent all at once would be enough to move the needle of the huge decline we’ve seen, even in construction, much less the economy. The job destruction is way too big,” said Kenneth D. Simonson, chief economist for the Associated General Contractors of America.

Few counties, for example, received more road money per capita than Marshall County, Tennessee, about 90 minutes south of Nashville.

Obama’s stimulus is paying the salaries of dozens of workers, but local officials said the unemployment rate continues to rise and is expected to top 20 percent soon. The new money for road projects is not enough to offset the thousands of local jobs lost from the closing of manufacturing plants and automotive parts suppliers.

For its analysis, the AP reviewed Transportation Department data on more than $21 billion in stimulus projects in every state and Washington, D.C., and the Labor Department‘s monthly unemployment data. Working with economists and statisticians, the AP performed statistical tests to gauge the effect of transportation spending on employment activity.

There was no difference in unemployment trends between the group of counties that received the most stimulus money and the group that received none, the analysis found.

Needless to say, the Administration is already whooping through another $28 billion for more of the same.

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Sign of the Times?

Fine Homebuilding’s newsletter, usually entirely devoted to tips on subjects like new insulation techniques and croscut saw sharpening, this week has a link to the NYTimes article on walking away from your mortgage. Hmm.

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This guy sees continued low interest rates

The Big Picture says employment rate is so dismal and so unlikely to revive soon that there is no chance the fed’s going to raise rates in 2010. Little inflation pressure due to that unemployment, either. Of course, a horrible employment picture is not all good news. There’s this:

In our view, the looming threat to US monetary policy arises in the Congress and not in the labor statistics. There each and every proposal in the House or the Senate removes elements of our central bank’s independence. This is the same Congress that will not admit error in the construction of Fannie or Freddie. This is the same Congress that has a time horizon of two years or less until the next election. And this is the same Congress that is incapable of managing the federal budget. Markets know that once this Congress seizes control of monetary policy, a political bias will act against the value of the dollar and against inflation restraint. Markets can perform well when there is a loose fiscal policy (deficits) as long as monetary policy is balanced. Markets also know that politically driven monetary policy is inflationary. This is the fight ahead after the healthcare debate is over. For now, we hold to our portfolio views articulated above. We will paraphrase what Lord Keynes said: if the facts change we will change our minds.

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Where to price your house

A reader asked what I thought about pricing a listing at its 2005 level and I, smart ass that I am, replied that it depended on whether you wanted to sell the place or just list it. More seriously, here are two new listings whose fate should provide some clue, if and when they sell.

398 Stanwich Rd

398 Stanwich Road sold new in mid-2004 for $5.550 million and was re-listed last year at $6.345. It didn’t sell so today it’s back at $5.895. Assuming some bargaining room, it seems to be right back to that 2004-2005 level, so let’s watch and see.

11 Tomney Rd

11 Tomney (lower Stanwich) also sold new , in January, 2006, for $3.1 million. It’s been listed today for $3.2 million.

So watch these two and if they sell quickly, there’s your answer. If they linger, that’s an answer too.

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Is Old Greenwich Gables going to be Lyon Farm East(ern)?

Unit #85 at the Gables sold for $375,000 in 1999. It was placed for sale a year ago January for $1.095 million and sold today for $585,000. Adjusted for inflation, we’re probably below 1999 levels, at least for this unit. UPDATE: According to the CPI Index, $375,000 in 1999 dollars would be worth $487,000, so we’re still ahead of ’99).

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Throw them all out, every one of them

Drudge has posted the transcript of a CBS News segment, to air tonight, on the wonderful winter trip our representatives treated themselves to in Copenhagen at our expense. Over 300 hotel rooms booked, three jets, countless commercial flights for staff, with wives and, no doubt, mistresses along for the ride. Pelosi wouldn’t speak to CBS, nor would Captain Al Rangel, but one joker who did said that sending so many people “shows that we’re serious about global warming”. How spending my money on himself demonstrates his seriousness about anything baffles me but then, I’m not a politician.

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Price cut in Old Greenwich

108 Shore Rd

I’ve always liked this nice old (1925) house on Shore Road. It hasn’t sold at its asked-for price of $2.195 so today it’s been slashed to $1..610. The assessed value (again, that’s supposed to represent 70% of its estimated 2005 value) is $1.732, so that’s pretty good. Renovated in 1995, 0.45 acre, with hot tub. I like it.

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Lyon Farm still falling, and what’s with Dewart Road?

207 Lyon Farm sold for $920,000 in 2000, hasn’t sold since being put back up for sale in 2008 and is priced today at $795,000.

And, speaking about depreciation, 8 Dewart Road sold for $3.5 million in 1996, $3.4 million in 2000, and is now being offered for $3.825 which, adjusted for inflation, must be close to that 14-year-old price. Might be a deal here, or might not; your choice.

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Single Family Inventory

Through a combination of sales, contracts and (a lot of) expired listings, the current inventory of homes is down to just 484, a significant drop from last July 1st, when we had 745. On this same date in 2009 we had 543 houses available, 442 in 2008, 428 in 2007 and 376 in 2006 (all data lifted w/o permission from Shore & Country’s site).

Will we see a surge of houses come back on in the next few weeks? I expect so, but you might want to take advantage of the lull by either dropping your price now, to make it stand out, or getting your house on the market ahead of the others, especially those 119 foreclosures.

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Not a bad little Byram house

7 Richland Road

It’s not Riversville Road, granted, but this 2005 house has dropped from $799 to $675 today, below its assessed value of $744,000. I don’t know whether its new price will do the trick but it brings it into a condo’s pricing, which ain’t bad.

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I was wrong

717 Riversville Road

When this house first came up for sale in the spring of 2007 priced at $14.7 million I liked the house, but figured its location would limit its appeal and that it would sell for half that amount. It went to contract December 21 and sold Friday for $8.850 million. That’s a lot.

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Foreclosures in Greenwich

I just checked a service I subscribe to for foreclosures initiated in December ’09. There are 11. I know the houses and at least ten of them (the 11th is a builder’s lien being foreclosed) are not only being foreclosed on by the primary lender but none is worth the amount of that mortgage and all have two, three and even four loans encumbering the property. In short, these people are f****d and will not be coming back above water.

That’s just houses coming into the foreclosure arena last month. Draw whatever conclusion you like, but I don’t think you should count on any rebound in prices soon.

UPDATE: 219 foreclosures were started in all of 2009.  That number includes duplicates, where second and third lien holders pile on, but if you figure that there are 150 houses under foreclosure right now, plus the 2007 and 2008 crop (the process takes a long time) I think you’d be in the ballpark. That’s a lot of inventory.

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Still trying, but at a lower price

15 Oakwood Lane

15 Oakwood is back on with a new broker and a new price, $4.950 million. I like its location, close to town, and I remember it as a nice house. It sold for $3.850 million back in 2000, was listed again at $5.595 in 2005 but sold for $4.7 later that year. In 2008 the current owners tried getting $5.950 and as noted, have dumped their first broker and are trying again at close to what they paid for it five years ago.

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The curious saga of 16 Stillman Lane continues

Last month I reported that 16 Stillman Lane, having been recorded as sold directly in November for an unspecified sum, had been rented out by its new owner, Indian Spring LTD Partnership, for $15,000 a month. I received an email from some Rockefeller representative denying that the Rocks had grabbed the house back from its builder Shay so I corrected the item. This morning, it’s reported as sold, this time showing Shay, not the Rockefeller partnership as the owner, for $4.4 million. All record of that previous sale has been erased, magically, from our MLS files. Fascinating. Update – I believe I had this wrong – double checking, the record shows the November transaction as a contract, not a sale. I’m either losing my memory or they’ve changed the record again but in the spirit of charity and going with the most likely probablity, let’s assume my memory is going.

Stillman Lane as a neighborhood is not faring all that well. # 6 sold for $5.1 million in ’03, #35 for $5.45 million in ’04, # 15 for $5.5 million in ’05, #18 for $5.8 million in ’07, #8 for $4.85 milllion in ’09, and now (or again) #16, for $4.4 million. I detect a trend.

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Stamford border prices

The only real estate news this morning is that 314 Den Road, a large house “custom-built” in 2005 has a pending contract. This place started at $3.195 in June ’08 and was finally marked down to $2.249 last December and I suppose it’s selling for even less than that.

Den Road has never garnered Greenwich prices but I have the feeling that the real estate crash has hit it even harder than similar areas in Greenwich. 486 Den Road, for instance, was a big (10,000 sq. ft. including basement) spec job that started at $3.4 million in ’08, dropped to $2.4 last year and then was pulled from the market, unsold. Other houses there have similar histories.

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Antarctic temperature

 A scientist called in to the NPR show “Wait wait, Don’t tell me” Saturday from Antarcticaq and reported that the temperature down there was 40 degrees. This caused a reader to claim that we’re all in danger of drowning because the Antarctic ice sheet is melting. Anything’s possible, but I hope he’s reassured to learn that the present temperature at the South Pole is -23 degrees celsius – I don’t know what that is in real temperature, but it’s plenty cold enough to keep ice from melting.

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Roger L. Simon on Global Warming: follow the money

Here’s an item that seems familiar – kinda brings to mind Al Gore and his own business interests.

What has also almost entirely escaped attention, however, is how [ UN Climate Change boss] Dr Pachauri has established an astonishing worldwide portfolio of business interests with bodies which have been investing billions of dollars in organisations dependent on the IPCC’s policy recommendations.

These outfits include banks, oil and energy companies and investment funds heavily involved in ‘carbon trading’ and ‘sustainable technologies’, which together make up the fastest-growing commodity market in the world, estimated soon to be worth trillions of dollars a year.

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Someone set him up the bomb?

Over at Dealbreaker, Bes Levin is wondering whether TCW deliberately framed Jeffrey Gundlach to make him look like a sex maniac. I wrote of this story last week, after TCW accused its former star mortgage bond trader of possessing a huge trove of sexual materials and toys in his office. Levin focuses on the sheer volume: how could the guy have time to be so successful if he was drooling over all that pornography all day? But her post jogged my memory of what a reader here mentioned: videocassettes. “Videocassettes?” he asked, “how old is this guy?”  Indeed, Levin’s theory that some employee was instructed to amass a pile of sex junk and “hide” it in Gundlach’s office looks more plausible if you consider someone was rummaging around collecting whatever old stuff he could find. I mean, how long ago was it that anyone was using videocassettes to accompany his pud-pounding? Just saying.

UPDATE: No, it was his stuff – Dealbreaker’s got the scoop. He’s sent out a letter to his new clients complaining that the collection was his own private stash and bou is he pissed that TCW’s taken it! I question his business judgment, if not his sexual tastes.

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