Daily Archives: September 22, 2011

My Idea of Judicial Activism

This guy really knows how to use the power of the judiciary. Can’t find out his political party and, without any reference to diapers or wide stances, he’s probably a Dem.

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Kind Gideon

I have nothing against Gideon. I can’t help that his view of real estate is wrong, or that his politics are so far around the bend I expect him to come all the way around the curve and be to the left of Saul Alinsky by next month. I don’t expect fisticuffs, he’s too much of a gentleman for that. But I am getting prepared.

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Alas

Alas, Gideon, while my misguided and dangerous liberal beliefs may have steamed the vegetables of the true-Conservative set reflected in your brother’s mad rantings, your – dare I say rose colored view – of real estate surely has starched the shorts of the bearish among this readership as well. I too tell clients to view their property as “shelter”, not worrying so much about turning a profit for many years. But if you overpay $1 million, then sell five years later, you just paid $547.94 a night plus utilities and maintenance. That’s a pricey night out, even with this friend. You are correct that Club Road and associated Riverside are selling well, but I would suppose the old fashioned notion of scarcity (waterfront land) has contributed somewhat to making the place a little more fashionable. Just like her

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The Sound of Crickets

(Pictured somewhere on this page, the empty stadium where once sat thousands and thousands of Chris Fountain fans)

Gideon Fountain writes:

Well, it’s just you and me talking here, Frank old chum, since you pissed/scared off all of Chris’s loyal readers, but on the off-chance my Mom still checks in, I’ll respond:

You create a straw-man when you suggest I am arguing that sellers should hang in there, “waiting for the right buyer”.  That is precisely what I’ve argued against my entire career, for the simple reason that it never, ever, ever works.  What you and Chris can’t seem to grasp is that there are markets within markets. The section of town called “Riverside”, for a variety of reasons, is selling very well this year.  Are there some over-priced properties in Riverside that are not selling?  Yes. But are Riverside prices holding up much better than the rest of town?  Unquestionably.

P.S.  We probably should just switch to voice-mail, what say?

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Who has the money

I truly wish Gideon is correct, and that Greenwich is a deep pond of wealth and success in real estate. And I also concur with the notion that if one were to just drop 25% off the asking price, the odds of success are not great. I don’t think the issue these days is the buyer being too greedy, thinking their money is somehow worth more than the seller’s money. I think we are at an expectations juncture that has to be broken somewhere, and when it does I believe prices will either fall rapidly, or solidify quickly.

In Greenwich, there have been 65 sales in the $4-$7 million range – same as Gideon’s Club Road property – in the past year. However, there have only been 26 in 2011, and there hasn’t been a closing since July 29, almost two months. Of these 65, five sold for the asking price or slightly above, most traded for between 6-11% of the LAST asking price.  Three houses have contracts reported, but continue to be shown, meaning there isn’t even a written contract being executed yet. Yet there are 99 houses active in this same price range. This is a multi-year backlog, with evidence of slowing possibly pushing out more.

Additionally, time on market has been exceptionally long. While pulling on and off the market makes reporting time short on your computer, it is long in real life. Some properties in this group have been on and off for six or seven years. 404 Round Hill Road, for example, was first listed for $8.5 million in 2005 before selling in 2011 for 5.0 million.

It might be easy to decide there is no slowdown in this price range if your sellers seem content to have people tramp through their houses for years until someone “pays their price”, then someone who has $5 million cash in this market goes ahead and just does it because of a water view, or a great kitchen, or an address. But the numbers would indicate that, if you’re waiting for that greater fool to sell your house, it may be you and your pool is diminishing rapidly.

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