Live on Boulder Brook? You are so screwed

39 Boulder Brook

Thirty-nine Boulder Brook, that rather dreadful failed construction project that in 2008 was priced at $8.595, was sold today by Patriot Bank’s successor for $3.125 million. While I’m sure that’s news to gladden the darkest of bankers’ hearts, previous buyers on this street have just witnessed millions of dollars of equity evaporate.

Consider:
#39 is assessed at $2.488 million, and sold for $3.125
#33. originally asking $6.875 in ’08 and assessed at $3.553 this year, sold last month (!) for $4.882 million
#9, originally asking $6.750 in ’08, assessed at $2.877 this year, sold for $4.4 million in October, 2009.
#16, asked $5.995 in ’07, assessed this year at $3.3. sold in 2007  for $5.882
#31, originally asked $3.975 in ’06 assessed this year at $2.083, sold in 2006 for $3.6 million.
With the possible exception of the purchasers of #31 (and I have my doubts about the lasting value of that one), folks who bought these big spec homes are going to feel sore when they go to resell. Number 39 was certainly the worst of the lot but I don’t think appraisers will give that much weight. The houses are all about the same age and size and Greenwich, at least, considers them to be of roughly equal value. So if you paid $4.882 last month, of $5.882 four years ago, then “ouch” is the operative word. By the way, I can, sort of, understand someone paying top dollar in the frothy days of 2007 but what the Hell was November’s buyer doing paying so much this year when he knew that prices had fallen – Number Nine, the finest house on the street, barely escaped the foreclosure auctioneer’s hammer in 2009 – and he knew that Number 39 had been foreclosed on and was bound to sell at a fire sale price? Oh well, a nice commission was earned, and isn’t that what this is all about?

17 Comments

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17 responses to “Live on Boulder Brook? You are so screwed

  1. Anonymous

    There is a 1mm difference in assessment between 31 and 39 and the town considers that equal value? Maybe by your standards daddy warbucks this is not a big chunk of change, but unless the town royally screwed up or I can’t do basic math, they are assessing the market value of 39 at 1.5mm more than 31. The actual sales price difference is 1.7mm. So the buyers of 39 paid 200k too much on a 4.8mm house. Who gives a shit? I hardly think that is a disaster and I’m sure they are very happy there.

    • One lot is 1.7 acres, the other is just 1. I think the assessment for the larger lot is totally out of whack – guess we’ll see when those happy buyers go to resell it.

  2. Anonymous

    Meant 39 and 33 in the previous post, not 31 and 39. The payup for 33 doesn’t look unreasonable.

  3. Anonymous

    why didn’t this sell sooner? looks like a tremendous bargain– and a beautiful house. What is wrong with it? I’ve seen several recent sales in Darien in this price range (and far higher) that are not new construction. But I don’t know Boulder Brook. Do tell.

    • It didn’t sell, Anon, because its Westchester builders grossly overpriced it at the beginning and thus missed what was left of a dying market. The land slopes severely uphill and the quality, while not bad, was no match for number nine’s which was in its one trouble. Boulder Brook had mostly modest homes until one very large, very expensive spec home sold, at the very top of the housing bubble. That spurred the construction of three more houses that the market didn’t want and couldn’t afford.So prices collapsed. Last month’s sale, by the way, exactly matches the two mortgages on the place, which explains the seller’s price. But it doesn’t explain the buyer’s willingness to pay that price because, in my opinion, a seller’s needs are irrelevant to a home’s value. Don’t believe me? Call up your broker and tell you “need” to receive $90 share for your GE stock.

  4. Anonymous

    It is only going to get worse!

  5. Anonymous

    The bulk of the difference in the assessment between 33 and 39 is the structure, not the land. 900k for the structure and only 100k for the lot. No need to poop all over the buyers of 33. They bought a much nicer house on a much nice lot. Call me crazy, but those tend to cost more. You really should retract the post as it is uninformed.

    • Anon, I don’t think Boulder Brook will see $4 million again for a long time. If I’m right, then someone who paid $5 million will be in that house for at least a decade unless he wants to take a severe hit. O’f I’m wrong, then someone’s made a fantastic deal and will laugh at me all the way to the bank.Could be -I ain’t no Pope.

  6. Anon

    Also, with the increase in foreclosures, this increases the risk that builders take when they buy lots.

    This can only force builders to lower their offers, not only on Boulder Brook but all across Greenwich.

  7. Out Looking In

    I suppose we won by losing, eh Chris? #9, #9 (I just can’t get the Beatles ou tof my head)…was a great house, and at $3.7-$3.8 would have been a sweet deal at the time..but $3.125m is downright fugly…was the house starting to rot or something?

  8. Out Looking In

    what is even more bizarro is that two houses sold on Sawmill for around $3mm, which happen to be in the same school district, materially older and definitely less garnd. Okay, they had pools, but throw in another back twenty-five, and u could have a spanking new pool on BB to boot. For those that don’t know, Sawmill is a one lane street (as in 1- shared in each direction in winter) and has also added a few grander homes in only the past few years….strange market

  9. Riverside

    I don’t agree that a distressed sale sets the bar for the market on the street. If every other house on the street was distressed and being sold by a bank, maybe yes. But markets are set by willing sellers and buyers, and banks selling distressed prices are not “typical sellers”, so therefore this is not a typical comp that sets the market.

    CF, this seems like business 101 – are you really not clear on this, or is this just your bearishness bubbling to the surface?

    • Look at it this way, RVSD: if there were just one distressed sale going in in town, you could surely claim that it was a one-off and should have no bearing on the price of other houses. But when there are dozens of houses in active foreclosure and hundreds more underwater, just waiting for their lenders to drop the hammer, you’d be foolish to ignore the lower prices – buyers certainly won’t and appraisers won’ either, so who’s going to pay some dreamed-up “full price”? Even WASPs don’t always pay retail.
      Boulder Brook’s last three sales were all “distressed”. You can call that an aberration if you want – I say it’s a street that’s in trouble, with nowhere for prices to go but down. But hey, opinions aren’t money so, if you care to back up your convictions with hard cash go right ahead and write me next year, telling me how you did.

  10. Anonymous

    Chris is right. Foreclosures have not really even got started and smart buyers know that. Willing buyers know that price discovery means finding out where the distressed stuff trades since there will be many more trades like that in the near future. It is NO fun catching a falling knife!

  11. The Dog in the Manger

    Your comments once again demonstrate that you never let the facts get in the way. While stating that in 2008, #33 asked $6.875 and #9 asked $6.750, i.e., $125k less, notwithstanding that #9 is assessed for $676k below #33, it was #33 that was “grossly overpriced.” (While not to suggest that #9 is not a nice house, one of Frank’s posting when you were away implied that your firm has a relationship with the builder of No. 9 which would explain all of the cooing over that house). Ah, those ignorant “Westchester builders.” (As you know since you have been advised on this point, the builders of #33, live, are based, and have built in Greenwich for a number of years. Since they also have built in Westchester, they are one of those [gasp] dreaded out of town builders). Clearly, anyone who would stoop so low as to build in depressed downtrodden Westchester, must be second rate. That would explain why they would be so imprudent as to build on a street with such “modest homes”, e.g., those priced $2M and up, not including nos. 9, 16, 31, 33, and 39 – which notably is on a flag lot. (By the way, Boulder Brook is not that long of a street and does not have a lot of houses on it. It is also one of the few mid-country roads with a cul-de-sac. In addition, the property at 33 does not slope upwards nor was there any third-party financing involved. But again, those darn facts). In any event, it would seem safe to say that purchasers with the wherewithal to plunk down $3-$6MM on a home, probably have a little financial savvy. Accordingly, they should be able to make back the big losses you predict assuming that they were incorrect in their assessment of their home investments. Otherwise, hopefully for their sake, they have a Mama who can put them up.

  12. Anonymous

    dong in the manger…………………….you have fleas. And, you are going to get your face ripped off when the real estate market declines another 30%. Buckle up Sir……………….it is going to be a bumpy ride!

  13. Anonymous

    I happen to have seen both 33 and 39 when they were on the market. 33 was a really beautiful house – very nice finishes, very nice lot, with a gorgeously finished third floor and basement. 39 was built by the same Chinese builder who has a bunch of unsold mcmansions gone into foreclosure (101 dingletown, 2 on Montgomery Lane, and something huge on Byfield lane). All of them lack any design or taste. Bathrooms are done all throughout the houses in the same kind of ugly red and yellow marble. Details such as moldings, woodwork etc are not in line with the type of house that warrants $3-4mm. Quality overall looks just really poor – 101 Dingletown is a few years old (was rented I believe) and looked by last winter like it was in need of a substantial renovation. If the value that realtors have to add lies in quoting a number of sales of neighboring properties that really in no way (but on paper with respect to sqft) compare to each other and then draw conclusions such as yours below, I will pass. Ultimately, 33 and 39 were in no way comparable. And no, I didn’t buy either one nor am in any way connected with the builder of either one.