Straight stuff from the real estate industry

 “Consumers agree: now’s the time to buy real estate”. It’s distressing to see that, according to this bogus poll, half of all home sellers expect to sell their house at its list price. The national brokers that support this ridiculous “news’ service only feed into that delusion.

Earlier today a reader asked why I cared about the quality of houses that I sell. I guess it’s because I’d like to take some pride in what I do.

30 Comments

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30 responses to “Straight stuff from the real estate industry

  1. FWIW

    Straight talk from a lifetime resident of Greenwich. Pride you have little or no pride. You trash your profession, you trash the homes in Greenwich, you trash the people who live here, you trash the town you grew up in and you even trash your own family on this blog. The good news for you is that you at least have your like minded loyal followers who love doing the same thing. How about writing more about the good things Greenwich offers. CF grew up in one of the best Towns in America you make it sound like this place is not worth calling home.

    So isn’t it time you give your less vocal readers, your family and this Town some respect! Prove to us you have a little love for your home town – Greenwich, CT. I know you have it in you but do you have the b***s to write about the many postives this Town offers or does that make for bad blogging.

    I know we will hear as we usually do, from your usuals who feel this Town is so bad but yet they still call it home also. If it is as bad as they write about each day why don’t they leave. What is keeping them here? Could it be that Greenwich is actually an amazing place to live. If so, why would they trash it so much with their comments.

    My hope is those other readers of your blog who are loyal Greenwich residents will drown the negitive commenters out and give us many positive comments about why they decided to call Greenwich home.

    Boy these comments are going to be fun to read. Let’s see it we can hit an all time record for the number of comments and see how many are positive vs negitive. If this gets posted and hits a chord with the people who really care about our Town these comments could be really fun to read. This could turn into a reverse blog – the people of Greenwich control the narrative instead of you.

    Let’s see if you post each and every comment. We won’t know if you do but you will CF.

  2. Greenwich is a paradise on earth and every house on the market is perfectly priced and a fabulous value.

    Happy?

    I don’t recall CF ever “trashing” anything. He does provide a forum for discussion of all sorts of local issues that benefit from discussion. Even in a lovely town like Greenwich there are issues that honorable people can disagree on. If you like your news and commentary to be predigested pablum, read the Greenwich Time.

  3. anonster

    I think CF is pretty balanced on the whole. His opinions are his, sometimes the folks agree, sometimes they dont.

    But….the original posters comments probably reflect a growing concern by his detractors that maybe, just maybe, CF is more right than wrong about “stuff”.

  4. Anon

    Chris Fountain is one of the few who shoots straight and isn’t delusional. FWIW’s comments are clearly off the mark. If you don’t like what he writes, don’t read.

  5. Walt

    FWIW -
    I read this blog all the time, and I don’t think Weasel Boy trashes Greenwich. He points out what he thinks are over priced houses, but what is wrong with that? Plus his opinions on most things are usually wrong anyway, so keep that in mind.

    I assume you support free speech, so long as you agree with it, right? If you don’t agree with it then it is not OK? Greenwich is a great place to live, but it has flaws. Everything does. Is discussing them taboo? I think not. You want perfection, move to Candyland.

    I think Chris just tries to be honest, and there is nothing wrong with that. Differing opinions are not a bad thing. That is what makes the world go round. And if you disagree, suck it!!
    Your Pal,
    Walt

  6. Cobra

    Having lived in Greenwich for nearly 65 years now, observing the unfortunate degeneration of our town, I find Chris Fountain’s perspectives to be starkly accurate. If you don’t agree with his views or those of the majority of his commenters, why get worked up in a lather? Just switch from this blog to http://thedisneyblog.com/ or one similarly driven by childish fantasy.
    We’ll all be happier then…you won’t be exposed to reality and we won’t have to read your comments. Winning!!

  7. anonypotty

    Chris, its time to let everyone in on the secret. If you live in Greenwich, your Sh%t doesn’t stink. In fact, Greenwich residents do not have the ability to sh%t.

    Instead, after our food is converted into energy, any waste evaporates through our pores and heads to the atmosphere. This is where rainbows come from.

  8. Shoeless

    I thought rainbows came from Skittle-shitting unicorns. I saw one off Round Hill once.

  9. Anon1

    FWIW, after reading this blog for a while, I’ve observed Chris doesn’t shrink from dissenting opinions. In fact, I think he thrives on intelligent debate-key word being intelligent. Let er rip if you disagree with him.

  10. Anonymous

    My sense is that, for many people, the Greenwich area is still the lesser of several evils when one is in the position of having to live in or around Manhattan.

  11. just_looking

    @FWIW, Whould you care to cite any examples of CF ‘trashing’ Greenwich, as you claim? Or do you want to just leave your accusation as unfounded?

    • Just looking, I am told by friends that there is a crowd of female real estate agents who will literally start screaming when my name comes up during broker open house tours. I wouldn’t expect much rational thought from this writer or her peers.

  12. atticus

    Another view:
    Phase Shift: The Next Leg Down in House Prices (March 24, 2011)
    Once we get into the 2012-14 timeframe, then I expect a third phase shift will drop prices back to 1987 levels. As many observers have noted, bubbles don’t retrace to historical averages–they over-correct to extremely low values.

    What forces are working to push housing prices to new lows?

    1. As I reported on Daily Finance, new mortgage broker compensation rules are about to wipe out independent, small mortgage originators and brokers. Mortgages will probably become harder to come by and more expensive as the “too big to fail” banks will consolidate their grasp on the mortgage market.

    2. Interest rates will rise. Most financial analysts are supremely confident that the Fed can keep interest rates near-zero forever. I suspect their confidence is misplaced. As I discussed yesterday, the Fed has backed itself into a corner, where if it pursues QE3 then it will fire up inflation that will destroy profit margins and household purchasing power. If it ceases to buy U.S. Treasury debt, then interest rates will shoot up.

    As interest rates rise, the amount of money home buyers can borrow drops. House prices follow this dynamic.

    3. Income for the bottom 90% is stagnant. All the bogus “housing is now affordable again” charts floating around all base their rosy conclusions on median income, neatly avoiding the reality that the top 10% has garnered the majority of income gains. Factor out the top 10% and you find real incomes have actually declined for the lower 90%.

    The same effect is true of the “wealth effect” powered by the speculative risk trade bubbles in stocks and commodities. These portfolio increases have only enriched the top 10% who own the vast majority of the financial wealth.

    So yes, real estate favored by this top 10%–Manhattan, Westwood, San Francisco, etc.– will hold its own as those benefiting from fat Federal contracts, Wall Street’s renewed license to practice piracy, the bubble in lighter-than-air Web 2.0 stocks, etc. try to outbid each other, but for most housing, the support created by demand has just melted like dirty ice on a hot Spring day.

    4. There are too many houses and not many buyers. The demographics are this: Baby Boomers are trying to sell to cash out or move, and the impoverished generations behind them cannot afford bubble-era prices. Just because prices have retreated to 2002 levels doesn’t mean they’re cheap–2002 was already a bubble, as you can see in the chart.

    5. The Federal-supported “recovery” is in trouble, politically and financially. As long as the nation obeys the whip of the Fed and allows it to print $1 trillion to buy Treasury debt every year, then the travesty of a mockery of a sham can continue. But as I noted yesterday, this policy is destroying the dollar and the purchasing power of households. That game cannot run for long without political pushback. Saving the “too big to fail” banks and the Financial Plutocracy might be Item #1 on the Fed’s list, but it ranks decidedly lower on voters’ agendas.

    6. Every investor who bought with cash because “this is the bottom” will 1) be underwater and anxious to sell and 2) be out of cash, having bet their capital playing “catch the falling knife” with real estate valuations. Sorry, cash buyers: the knife is still falling.
    http://www.oftwominds.com/blogmar11/phase-shift-housing3-11.html

  13. Walt

    Dude -
    I got news for you. It is not just a few female real estate agents who start screaming when your name comes up. It is pretty much everybody. And the ones who don’t start screaming tend to sob uncontrollably!
    Your Pal,
    Walt

  14. Did you just ‘out’ commenter FWIW as a female real estate broker? Nowhere in the comment does it indicate that reader is (a) female or (b) broker. It’s getting interesting now.

    FWIW, I’m trying to move TO Greenwich and have asked Chris to find us the right house. Chris waxes eloquently about many neighborhoods of Greenwich but balances that with honesty about a particular house, its price, location, and thus overall value to buy. Who would want anything different from a broker? Not I.

  15. anonster

    You mean they fight over you and scream your name? CF, the new gigolo!

  16. hethatshallnotbenamed

    Chris, the few times I’ve gone to town hall forums, its a chorus of huffs and puffs when you’ve taken a turn at the podium. You’ve rubbed a lot of feathers the wrong way and its almost trendy to not like you.

    Silly if you ask me.

    Especially at town hall, you’ve had nothing but thoughtful commentary to add to the discussion. Your opinion on this site is extremely useful, and I wouldn’t doubt if some of these angry agents use this blog to research an intelligent opinion on the market.

    • I appreciate that, Hethat etc. – the funny thing is, nobody ever says a thing to my face, so I get the comments, criticism, third hand. Which is silly – I’m all of 5’10, have never struck an individual in my life, and like to think of myself as a pretty nice guy with an open mind and a ready willingness to admit when I’m wrong. I suspect that I’ve become the focal point of all the anger occasioned by the collapse of the Greenwich real estate market. I await attacks from Miami, Florida brokers.

  17. Mr. EOS from RI

    Sorry Chris, I can’t help you decode an angry woman. In an earlier post you said “it’s all about the filly.” Truer words were never spoken and lucky me, I married a wonderful woman 32 years ago who makes me laugh every day.

  18. Cos Cobber

    Atticus’ post is rather convincing about a continued dour RE market dispite the occassional ray of sun.

    I admit, I fully enjoy sporting my pomp-pomps whenever their is good news locally about RE market all the while understanding that its likely a blip, not at all indicative of meaningful brighter days ahead. Positive signs in RE just make me feel good, no matter how shallow the good news is.

    I question though, what asset do you hold when you fear the dollar’s continued erosion and you find RE overvalued? Personally, I dont put much stock in gold…not at these prices. It certainly will be interesting to see how the global deficit and savings gluts unwind when the day comes.

    Oh yeah, btw, CF is a straight shooter and if anyone can’t see that, then they are living in candyland.

  19. Artie

    Wasn’t this article about consumers saying that now is the time to buy real estate? Let’s concentrate on that, shall we?

    At the moment, 1 in 4 homes for sale is either a foreclosure or a short sale. Not included therein, is the fact that banks are long (i.e. own) millions of homes which are not included in those figures, as they are not actively selling them, or selling them through brokers who provide information used in these statistics. One of the reasons they are not selling them all at once is that if they flood the market with supply while demand remains the same, the prices of almost all homes would be affected negatively. Very negatively.

    So in reality, it isn’t 1 in 4 homes that is a short sale or foreclosure, it is probably (I am guessing here as I don’t have the exact figures) more like 3 in 6 homes. When and if the banks decide to sell (or if they are forced to sell), the downward pressure will be enormous.

    I sold my home in Rockville Centre, NY in February, 2006. I have yet to purchase another home and I have been renting. I rent a 5 bedroom home on a lake, with a pool, for under $2,500 per month. My taxes on Long Island were $18,000 when I left. The lot size was 100′ X 100′. Interestingly, taxes in Nassau county have not gone down since I left.

    Where is the inspiration for me (a consumer) to think that now is a good time to buy a home again? Because interest rates are low? So, I should spend $100,000 or more than I will be able to so I can lock in a low rate? That doesn’t seem to make a lot of sense to me. Because taxes are going lower? They are not. Because I’m, wasting my money by renting? We looked at homes in 2006, and anything that we liked was on the market for $XXX,XXX. Those homes (some are still on the market!) are now worth 30-40% less than in 2006. Let’s use round numbers: $500,000 house then now worth $350,000 (30% deduction in price). We have not spent anywhere near $150,000 in rent = we win.

    I’m with CF here – we have not even sniffed a bottom, but it sure smells shitty.

  20. Confucius say: smart hubby who can cut and paste wife’s Blackberry text “what to say to Chris” :-)

  21. Walt

    Dude -
    How can anyone doubt that FWIW is of the female persuasion? I can profile her. I am really good at it, and have unique talents in this regard. Many think I am psychic. How do you think I was such a successful investor? I closed my eyes, picked a fund manager, and BINGO!! I just knew!! That is why due diligence is so overrated.
    So firstly, like 99.9% of all “Professional” Real Estate Agent’s are chicks. Right? It’s a fact. It is one of the few things women are actually better at than us. Sorry Dude. But it’s true. That and cleaning. So right away, it is overwhelmingly probable a woman wrote it.
    The other tell is she trys to guilt you, by bringing others into it, like your family. Typical Mommy move right? Men know the cardinal rule. No family, no women, no kids. When chicks fight they lash out. Men focus on the opponent.
    Then she has dellusi..delusio.. then she thinks she has won the day already, sitting atop her Maytag upright, expecting the flock of Greenwich to follow her. Yes, that’s right. She is never wrong. All chicks believe that.
    And her name is either Buffy or Muffy. That is not coming through all that clearly. She is a WASP – DUH!!! and she is 62 years old. She has blue hair, and has that Grandma smell. But no one will tell her except me. She is on her third husband and she hates dogs. Because they may make a mess. And she has never had an orgasm.
    If you send me $100 bucks, I will give you her name, phone number and email and home address. If she lets me stick my finger up her ass, right next to that stick she has in there, I can tell you her weight and IQ too!! Let me know if you need anymore help.
    Your Pal,
    Walt

  22. Shoeless

    Cos cobber,

    “silver and gold are money, everything else is credit,” JP Morgan.

    When gold first hit $400 in the early 80′s, the Dow was less than 1000. It’s still undervalued, especially in light of the toilet paper which now passes for fiat. The Japanese, US and (to a lesser extent for now) Europe are in a race to the bottom, trying to devalue their own currency realtive to their neighbors.

    Also, if one holds physical stock of precious metals, it is beyond the perview of those who will eventually seek to tax inheritance at usurious rates. At a 50% tax rate, physical holdings break even to equities when equities double. My guess is the inheritance tax rate will be 80% or more by the time I die. At that level, my stocks would have to outperform by a factor of 5 for me (my kids) to break even. No brainer.

  23. Peg

    These harpies are hysterical because you speak the truth, Chris, and it makes them look all the worse for it. Being honest about values is, well – honest and straightforward. Doesn’t demean your town. Only lets people know what is realistic to pay for housing if they wish to purchase now.

    And – EOS surely does seem to have one wise guy (in the very good sense) for a husband. Good; exactly what she deserves!

  24. Cos Cobber

    While I dont dispute your point that the US, Japan, China and others are looking to devalue their currencies (albeit, slowly, quietly, subtly), I’m just not convinced I havent missed out on most of the gains to be had in with precious metals. I’m not fond of investing in asset classes that have been on a long bull run. It often works out poorly for me in those circumstances.

    I have to say, if I had a super high net worth ($50 million+), I would certainly have 10 to 20% in gold because I would be worried about losing it all in a fiat currency meltdown. With my present modest net worth, it wont be too hard to start over, so I dont bother with the defensive portfolio.

  25. Patrick

    Let’s be realistic here. I’m not saying the real estate market doesn’t have another leg down, but 1987 prices would put the land at zero value and the structure at about 50% of current construction costs.

    That doesn’t seem realistic to me. In 1987 the median house price was $540k. In 2007, it was $2.1m. That’s over a 75% drop in value. Material prices have risen, so in general land is dropping in value. A $2m house in 2007 would cost more than $540k to build today assuming the land is viewed as worthless. In order for this to play out as described, there would need to be another depression like event to cause deflation in other asset classes – food, building supplies, material, labor,etc. If we are saying that real estate will reset to 1987 prices, we are also saying that the economy will go through a severe depression….possibly greater than the 30′s.

    As a note, median house prices in Greenwich in 2009 was $1.595 and in 2010 it was $1.675. I’m going to say that it will be higher in 2011. A lot of bad news out there, but for this local market I don’t see any real indications of the types of issues listed here – foreclosures (seems less than 6 months ago), inventory glut (not in OG and Riv), too much building (# of homes is relatively flat, although they have gotten bigger), lack of jobs (college educated employment rate is less than 5%). For Greenwich I am not convinced by the naysayers…we might be flat or down but we’re not going to 1987 prices…otherwise we have bigger problems.