Nationally, USA Today says that homes “underwater” have decreased 40% this year.
Locally, there are either 518 active single family listing (per GMLS) or 436, according to Shore & Country. I’m not sure why there’s such a discrepancy but Surf & Turf’s numbers are always solid, so there must be a different method of calculation going on here.
Either way, it’s the USA figures that interest me because they reflect what’s going on in Greenwich by way of short sales – there aren’t many. Those owners who fought off the banks for the past four years turn out to have been wise to do so, because the market has come back. I recently spent a fair amount of time in the Town Hall records checking out pending foreclosures on behalf of some clients and I concluded, looking at the amounts owed and comparing them to what I thought each house might sell for, that there’s enough equity in most of them to bail out the owner.
This is what it used to be like in past years, when foreclosures in Greenwich were rare; the homeowners would kick and fight to keep their homes but when all litigation options were exhausted, they could usually just sell the home and get out, usually with cash in their pocket.
Last week, for example, I looked at the encumbrances on a house a client was interested in – $1.3 million first mortgage, $90,000 in state and federal tax liens and a $45,000 judgment from a credit card judgment. Three years ago or so that would have been a prime candidate for a short sale; today, I estimate the house could sell for $1.750 (ish), more than enough to get out, if not whole, at least without having to bring cash to the closing table. The owner fights on, I’m sure to save his original 20% down and because he likes living where he does, but if he runs out of all other options, he can now sell it, and end the drama. He has no interest in a short sale,nor should he.
I’m not alone in having clients who want “a bargain”, and I, and other agents I talk with have to break the news that “bargains”, especially in the under $2 million market, are gone. Want a house once priced at $5 million for $3.5? I can probably find you one. But a $1.8 house for $1.3? Not a chance, not in Greenwich, not now. You can wait and see whether the economy collapses again, which I think it will, eventually, or look in places like Redding, Weston, even New Canaan, towns whose real estate markets have not noticeably improved. But for now, for bargain shoppers, Greenwich represents only a missed opportunity.