The spring market has finally arrived and it’s hot – I blame global warming

11 Pleasant View Place

11 Pleasant View Place

11 Pleasant Place, in Havemeyer came on last week priced at $2.375 and already has an accepted offer. I thought it was a great renovation/transformation, with really top-quality construction. I liked it so much in fact that I didn’t mention it here, wanting to show it to my clients first. Turns out that its layout didn’t work for them, but someone else certainly liked it.

For all my enthusiasm, however, I thought, along with several other good, experienced agents I discussed it with at last week’s open house, that it would sell in the $1.9 range, not $2.3 or $2.4. I believe we all missed the shift in prices that’s occurring, which is great news for sellers, bad news for buyers. And I should have caught that shift because I’ve been upgrading my own opinion on value for a number of houses that didn’t sell last fall – those same prices are looking reasonable now, because of the lack of inventory and what houses in the $3-and-under range are selling for.

33 Comments

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33 responses to “The spring market has finally arrived and it’s hot – I blame global warming

  1. Cos Cobber

    I like this one…not surprised its already gone. Also, no surprise about the Orchard Place house too. It seems anything that has been renovated to today’s standards with a B+ exterior on a solid street under $2.2 is going to land a contract. If your house isnt selling now, you have to look in the mirror….the market is being smart about truly marginal locations.

  2. How is it the new normal is not posting the usual, “I told you so” already?

    Again, things priced right will move. There is a difference between being at the market and being on the market.

    Also, with interest rates here it is interesting to look at a graph of average mortgage payment instead of average home price. 30yr fixed jumbo can be had at 3.5%! If you go back to 2007 the same mortgage pmt even in riverside or old greenwich is much higher even though prices are now the same.

  3. Mickster

    I called this market weeks ago and you were the naysayer then…remember all the Mickster taunts…the real issue here is there’s so little good stuff on the market yet….so far.

    • Cos Cobber

      Dude, some of your posts deserved scorn. They read like the typical wet behind the ears broker nonsense. Its official, the market is hot…now lets see if it has any legs over the coming year. There is no job growth in CT and NY, so all we have are people within our market trading around.

      • Mickster

        You just get tired sometime of reading the same ol crap about how bad things are – it ends up being a self-fulfilling prophesy.
        It doesn’t take any genius to know that many people are having it tough out there. I know people on food stamps and others worrying how to invest their 7 figure portfolios. That’s life.
        However, there are lots of people who want to buy in here right now and others who need to get out so let’s go with the flow…make sense?

  4. OG

    Regarding a shift in prices, the difference between your anticipated $1.9M and $2.375M is almost $500K – and that represents a 25% increase over what you and the others anticipated. Do you believe prices have jumped 25% in a few months?

    • Only if we were right in calculating that it would have sold in the $1.9s a few months ago. Oddly enough, I still think we were, which would indeed mean a huge price jump. Reminds me of Lawrence Welk’s bubble machine.

  5. firsttimebuyer

    The sale price is not public yet right? Are you all assuming it went close to ask because it sold so quickly?

      • Walt

        Dude –
        Look at all of you, getting yourselves all worked up over the price of DIRT!! It really is funny to observe. Isn’t having a stiffy spiffy?

        Well, before all of you have a Mt. Vesuvius eruption in your tighty little whities, look around. 89 million people don’t work. Half the populace pays no taxes. And those that do are getting bled dry. The stock market is manipulated by the Fed, and once they get the guns off the street, and DHS fully equipped, they will let it crash, which is when the shit hits the fan.

        And as far as the little cesspool in which you operate? Connecticut is self-immolating. (That means it’s setting itself on fire Dude). There is no reason to live here, and many reasons to not. That wasn’t true 25 years ago. Unless you want to pay for the privilege of sharing snot on a cracker, with pink pants wearing dressed up little douche bags. That must be a lot of people, right?

        Anyhows, enjoy your little circle jerk while you can. I sell commercial, so if any of you retards want to buy a bridge, call me!! Or a tunnel!! You can name it after yourself, Dude. Fountains Funnel?

        Your Pal,
        Walt

  6. Anonymous

    jumbo at 3.5% only if your dti is in the high 30’s with points. i’m not a smart man, but i do know it takes a lot of cash down and high income (full doc verifiable) to hit 30’s dti.

  7. Anonymous

    Chris, would like your opinion on “low inventory” in Greenwich. An agent representing buyer in $a-b mil price range even mailed us letters begging for listing ours. Is it really that short of good inventory? Why people are not listing at this market? Delayed move (turnover), avoidance to sell at a still low point…??? Your view with pulse on market, please. This supply/demand thing ultimately drives price, right?

    • Decent house in central-to-eastern Greenwich in good condition – recent kitchen and baths a must – under $1.495, should sell quickly. I know of a couple that aren’t, despite being what I consider to be well priced, but generally, that’s a good market to be a seller in. Very, very limited inventory, so if something sticks around for 30 days, it’s overpriced.

    • Anon

      Not everyone moves. Some people hold till they die to get a stepped up basis and avoid capital gains taxes. There is a big tax to selling our house and has been for years, since we bought it long ago. The current $500,000 limit on carryover of gains for a married couple on sale of homes means that many people are life partners with their house once they have been there for a while.

      The law is sort of stupid – hold till you die to avoid capital gains tax, but it is what it is and will keep inventory down in the more expensive metropolitan areas..

      • Cobra

        We’re in exactly the situation you portray, Anon. We’ve lived in our Greenwich home for 26+ years so (knock on wood), we’ll be here for as long as we can manage it. As the house was constructed in 1956 and typical of the architectural norm of the Eisenhower years, it’ll be a tear down/land sale in any case.

        • Anon

          There was a huge increase in prices for about 15 years before 1986, when Congress stopped allowing unlimited flipping. Anyone with appreciation over $500,000 had a once in a lifetime opportunity to flip. We missed it. If we cannot afford to hold till death, we will need to rent it.

          I also think that some heavily leveraged houses are going to be underwater taking into account the gains tax. If you are in that situation, you clearly need to hold till death or else pony up more than the house is worth.

        • Seriously??

          You are both completely insane. Your house has gone up in value and you can’t afford to pay a tax that is due only after you cash out. And by the way, that tax is a capital gains tax, not a marginal tax? Lets do some math. Lets assume you have a $1,000,000 gain in your house. Congratulations. You now have two choices. Sell the house and GET $800,000 after taxes and move to where ever you old people move to or do nothing because you can’t afford to pay the tax? Don’t cry to me about not having enough to pay taxes.

          Seriously, give me a break. Don’t tell me you have a second mortgage blah blah blah. You either have a gain, on which you are going to pay a tax, or not. You either give 20% to the government or you get 0% and take it to your grave.

      • Anon

        People bought for $100,000 and the house is now worth $1.0. Add the tax and commission and you have over $360 in cost of sale. Lets say the couple has a $750,000 mortgage having sent their 3 kids to private colleges, which was paid for by the house having been refinanced when the house was $1.3.

        Got a problem there. Even with a lower mortgage, if people refinanced after they bought, there may be little or no equity.

  8. The New Normal

    stocks and houses will continue to appreciate because TINA (there is no alternative)….

    anecdotally I know people who were hoping to buy in Greenwich who are getting priced out now for houses that are in good locations that are large enough for their family needs – they are looking in other towns now (farther from NYC)

  9. GreenITCH

    CF – 25 % off that is A LOT , no ?!?! I may have to bookmark this particular column…” we all missed the shift in prices that’s occurring ” Actually you are probably the most bearish person in town on Greenwich real estate ..where most realtors ( Gid ? ) are all about the Glass being half full for the last 4 months any ” green shoots ” of a housing recovery you alway countered with some dribble on why the argument doesnt hold up .. and ” Just wait and see ” …in fairness , i consider myself more realistic but have to say i scoffed when i got that flyer suggesting a realtor needed houses in a particular price range as being a mere ploy …What next bidding wars !?!

    • My track record is far, far better than most of the agents out there pricing houses, so I’m okay with missing now and then. You call it dribble, fine: enjoy your shopping spree with a “glass is half full” agent. Don’t cry on my shoulder in three years when you attempt to resell it, fair enough?

  10. Anon

    After each big recession, there was a big jump in real estate prices in Greenwich. I have lived here for over 30 years, and watched the cycles. Of course the past does not always predict the future, but there was a high probability that would happen starting last summer when interest rates reached all time lows and the stock market reached all time highs and New York City real estate was heavily into recovery and Greenwich was sharply depressed in price.

    It will last 2-3 years and then normalize, stabilize or prices will be flat. Not clear why this happens, but it seems to be a cyclical pattern.

    We are not yet at the teardown and rebuild for profit. Not clear if we will get back to the $800,000 to $1 million profit for a teardown and rebuild in central Greenwich. Surely there is a market coming back and prices are starting to come back.

  11. Anonymous

    let’s be realistic — “demand” is whimsical, the urge to buy can be whipped up just by media talking about how fast house started to take off… (we saw it in 2005-2007) as sidelined pent-up demand can come in influenced by perception, no mentioning of recent hedge fund long. “Supply” is usually real and stable — you move on to FL to retire, or find a CA job, need to sell. Recent inventory level is ABNORMALLY low nationally and in this town — that’s why I keep asking “why NO seller”.

    • Anon

      My street has an empty house. They are waiting to sell it as an estate. Maybe even a couple of more empty houses, and it is not that big a street.

      Thank the tax man for decreasing inventory.

    • GreenITCH

      What economics book are u reading …Supply is real and demand is ” whimsical ” ? Most of media is pretty balanced referring to a housing bounce from lows … no Boom . a tepid recovery , with today being first decent jobs number ..you dont think demand for a house , a roof over onces head is real ? or how about rent vs buy as a mathmatical equation of value ? or perhaps educated people see a bit of a silver lining on job mkt and think these historically low rates have bottomed ..sounds real to me ? supply meanwhile …you dont think retirees are sitting on homes that need to be sold to tap a nest egg ? or those that relocated or have been renting awaiting a recovery are now interested in listing a house for sale and just where are u getting your statistics on the National inventory level being low ?

      • Anon

        Inventory is low in NYC:

        http://www.urbandigs.com/2013/03/february_manhattan_market_repo.html

        In Greenwich, if you read the comments, you would see that some retirees will have to rent their nest eggs and will not find it economical to sell.

      • Anonymous

        Flanagan at BoA revised up his 2013 forecast to 8% (two day ago’s BoA conference he was talking abt 6%); Hatzias at GS talks about a “steadily up” housing market back in Feb; Citi came out this morning restating their 9% HPA for 2013! Ivy Zelman further adds to housing optimism stating “The future’s so bright, I gotta wear shades”. I am deeply rooted in the cautious camp, keenly aware of all the bonus misery on Street directly shaping (some) demand picture of this town… However, the inventory story is difficult to argue against as the reality on ground.. just check CoreLogic Feb MarketPulse for national inventory shortage issue. For Greenwich, Shore&Country’s inventory w/w, m/m or yearly reports all point that direction.

  12. Anon

    Just to be clear, in the 2010 revaluation, the assessor found a general 12% to 15% drop in prices from the high of 2005. However, some areas (e.g.,Cos Cob, Mianus, backcountry, some of western Greenwich) declined by probably a third. It is those inexplicably sharp declines that are going to do something to lift average prices in Greenwich by at least a third over the next 3 years from their low point. It is not an efficient market here. Some houses were a fraction of the price of neighboring communities. We have had some bargains. Now the buyers are coming in, and many or most of the bargains will surely disppear over the next 2-3 years.

  13. Kam

    How come Fairfield country real estate is strong now when so many Wall Streeters are complaining that their pay is deferred and they are working for free. Blah blah…