Hell, Greenwich homeowners consider such a puny loss a profit

Can you spot Reese’s piece?

Reese Witherspoon sells her California bungalow for “a major loss”: $4.9 million, on an original purchase price of $5.8. Sheesh, that’s less than $900,000 – chump change here in our own fair city.

The actress does have something in common with many Greenwich home sellers, however: after paying $5.8 for the place in 2008, she listed it last year for $10. I wonder if a local Greenwich firm is now operating out west?

More Mid Country blues

Going down?

16 Dingletown Road takes another price cut, to $5.095 million. I like this house: it’s removed from Dingletown itself, has a nice back yard and a convenient location, but I did wonder at the owners’ decision to price it at $6.150 this past April after they’d paid just $5.6 for it in 2011. Now the elevator, having paused at the ground floor, is heading for the basement. Oops.

The owners aren’t alone in their overestimation of the value of this house, however; the spec builder who put it up in 2008 tried $8.995 and various lower price points until he found these people three years later who were willing to pay that $5.6.

I wonder if the buyers made the mistake of looking at the original asking price and figured they were getting a bargain? It happens.

We’re not in Riverside anymore, Toto

17 Windabout Lane

We’re in the mid country, where the prices keep falling. 17 Windabout Lane just cut its price, again, and now asks $2.695 million. To be fair, that’s still a price that, for this house, might face resistance even in Riverside, but the owners can be excused for pricing it at $3.250 million 222 days ago because, after all, that’s what they paid for it in 2002.

Ouch.

So what were they thinking in 2007?

195 Pecksland Road

195 Pecksland Road has a new price, $3.685 million, and notes that it now sports “a fabulous new master bedroom suite” and a new kitchen.  That sounds very nice, and the price looks attractive, but if all that new stuff now makes it worth $3.7, what on earth was the justification for pricing it, pre-improvements, at $6.250 million back in 2007?

Another demonstration, if one were needed, that the authors of Freakonomics were wrong to conclude that real estate agents not only price their own homes higher than comparable homes, but get those higher prices.  In Greenwich, at least, agents are notorious for overpricing their homes, but they never get what they think it’s worth. Emotionalism beats objective assessment, every time, just as it happens so often with normal people.

On the other hand, here’s someone who disagrees with the previous post

26 Taconic

Having failed to sell for $5.495 million in 2010 (it started at $6.495 in 2007), Kaali-Nagy has brought 26 Taconic Road back on the market for $5.950. Much as I like Mr. Kaali-Nagy’s work, and I do; he builds a beautiful home, I’ve never liked this one as much as his others. The land sucks: 2 acres, but much of it is underwater in the form of a pond or found on the hill sloping down to that pond. On the busy, lower end of Taconic. The house itself is, to my taste, too dark, in part because of a porch roof on the east side that blocks the sun.

East wall

When he couldn’t sell it he rented it, for $17,500 in 2008 and $16,000 in 2010. Now that lease has apparently ended, so he’s spruced it up and offered it for rent at $27,500 or purchase, as noted, at $6 million.

I bet he doesn’t hit either number.

Even accounting for the normal reporter hyperbole, this has some truth, and it will affect Greenwich real estate values

1929 Tesla

Wall Street hasn’t recovered from the crash, and probably won’t.

Ever since Lehman’s bankruptcy in September 2008 jettisoned some 26,000 employees, waves of subsequent layoffs have stripped thousands of Wall Street traders, bankers and analysts of their six- and seven-figure salaries and bonuses.

New York City lost some 28,300 securities industry jobs during the financial crisis after Lehman’s demise, according to estimates by the New York state comptroller’s office. That doesn’t include the thousands more that vanished from hedge funds and private equity shops.

Only 8,500 of those jobs have come back in the past few years, according to the comptroller’s office.

“In past recoveries, Wall Street has been a driving force. That hasn’t been the case this time around,” said Kenneth Bleiwas, deputy New York state comptroller.

What’s more telling is that members of the current crop of Wall Streeters just aren’t making the same kind of money that they were before, even if the nation’s banks are racking up record profits. The comptroller’s office said the average salary has fallen by about $40,000 since 2007.

Moreover, bonuses have declined sharply. In 2006, the average Wall Street bonus was $191,360, according to the comptroller’s office. Last year, it was $121,890.

“Five years ago, you almost had unlimited horizon of opportunity, of what you could create or how much you could make,” said Greg Gentile, who was a Lehman credit trader and played guitar at the blues lounge. “That’s been severely limited and capped by regulation and by just a massive decrease in the risk appetite of the institutions.”

One 40-something stock trader who has bounced around major Wall Street investment houses complained of a “morose” mood in his line of work. Bonuses these days are often deferred, tethering traders to their firms longer than they wish.

A former Lehman trader at the Times Square concert summed up the zeitgeist more bluntly.

“Everybody is miserable,” said the trader, who like many still working on Wall Street declined to be quoted by name because his firm prohibits employees from speaking to reporters. “Everybody’s leaving who can, or they’re being squeezed out.”

I sold a $4 million house last year to a banker who told me, “I could buy a $9 million house (and he could have), but I want to be financially conservative”.  Naturally I thanked God for sending me a  client who viewed the purchase of a $4 million house as being “financially conservative”, but the fact is, that was one less sale of a $9 million house. I also have had clients who either deferred purchases or dropped their price ceiling by as much as $1 million when they found out how much of their bonus was going to be deferred: 90% in some cases. I suspect that sort of thing is happening all across the market.

She wore an itsy bitsy, teenie weenie, yellow polkadot …

Price advisor

After nearly six months on the market, 45 Hillside Drive has dropped its price $100,000, and now asks $4.495 million. I suppose the idea behind taking such an itsy bitsy teenie weenie price cut is to signal that the owner is finally willing to at least listen to a lower offer, but the message I get is that, if he wouldn’t budge for six months and is barely budging now, he’s intransigent.

Which would be fine, if the entire market hadn’t been telling him since April that his price was wrong. I’ll pass.

After Greenway’s $50 million cut, a mere $2 million doesn’t sound like much.

This one won’t last!

Nonetheless, that’s what the owner of 918 North Street has shaved off his price, so what would have cost you $13.9 million yesterday can be yours today for $11.9 million. This property has been on the market since 2009, when it asked $16.9 million and so far, it’s proved to have the attractiveness of a junked Corolla. Perhaps this latest reduction will fix that.

Sealed bids (!)

6 Lita Drive

6 Lita Drive, lower North Street, is an uninhabitable cottage on .3 of an acre in the R-20 zone, which means it is allowed a house no larger than 3,000 sq. ft. The tiny lot it sits on sucks. It came on the market at $1.395 million a few days ago and has received four, perhaps five bids, the highest of which is said to be around $1.3 million.

The buyer better hope this isn’t one of the addresses being reassigned to Parkway.

$50 million price cut from Ogilvy

Stormy Weather ….

499 Indian Field Road, which made headlines around the world when it was listed a few months ago for $190 million has, as predicted here, taken the first of what will probably be many price cuts. Today, that same property can be yours for the bargain price of just $140 million. Also as predicted here, the same reporters who gave Ogilvy such great press originally will not be around to report on this or subsequent price cuts. Smart man, that Ogilvy and a master at garnering free publicity.

I’m still holding to my prediction of $45 million, tops.

Stormy Circle

Further down the price scale and across the street from the water, 7 Stormy Circle (I kid you not) reports an accepted offer. It asked $1.680 in 2004 and didn’t get it. Owner brought it back at $1.095 this year and found a buyer.

Turns out, there IS a limit

And not just in Riverside, as these transactions from all parts of town show.

5 Old Mill Lane

5 Old Mill Lane, 14,000 sq.ft of questionable taste on 2 acres, sold for $10.375 million. That’s  lot of money, for some of you, but the sellers paid $11.2 million for it in 2007. They originally priced it at $12.750 this past winter, but that proved overly optimistic.

5 Irvine

5 Irvine Road, Old Greenwich’s price trajectory also illustrates, maybe, that there’s  a ceiling after all. It’s marked down today (pictures will be posted soon, I assume), for $2.835 million. That’s a lot for a house with a FARport instead of a garage to keep Stamford bicycle thieves at bay, but it sold for $2.750 in 2004, $2.875 in 2005, and $3.225 in 2007. This time around, in 2012, it started at $3.350 million before falling back to earth. Welcome back to 2004, if someone’s lucky.

31 Vista is not a new listing, but its agent switched brokers and took this property with her. Given its history, her old broker was probably glad to see it go. It’s been for sale since early 2010, when it wanted $16.750 million, and has been at its current price, $8.995, for more than a year. Not happening. I’m not sure what a waterfront building lot’s worth over here: I’d guess around $5 million, but whatever that price is, that’s what this place is worth.

6 Meadowcroft

And here’s a surprise: 6 Meadowcroft, which started at $17.4 million in 2011 and finally reported a contract on its last price of $13.750 million a few months ago is back on the market, still at that $13.750 price. The contract was reported as fully executed, no contingencies, so I wonder whether the defaulting buyer walked from his 10% deposit? That would hurt.

Sometimes, you just have to change the channel and move on

64 Howard Road

64 Howard Road, away up yonder on the Stamford border, is back on the market, still listed at $2.550 million. The owner is a (former?) newscaster who was  hottie when we both lived in Bangor Maine – made the evening news almost enjoyable, even if she seemed no more intelligent than any others in that box of bricks, made her way down here to New York and made, presumably, a lot of money. It may be time for her to let some of it go.

The house was sold to her for $2.775 million in 2004, which is what happens to people who come out from the Big City to buy a house in the country, so it must have seemed logical to her to list it for $2.995 in 2010 when she decided to sell. Logical, perhaps, but two brokers and 904 days later it remains unsold – time for a time check, lady.

I like the northeastern corner of Greenwich because it still feels rural, but historically, homebuyers have not shared that affection, and prices up here are much lower than in much of the rest of town. 2004 probably marked the top of the curve for upper Taconic, and certainly prices haven’t increased since then. 64 Howard is a very good house and someone will like it very much but, and  I’m just guessing here, I see another price drop in this home’s future before it is finally sold.

Moving day?

Round Hill deportees

Ten new listings priced at $9 million and above have been added to the market in the past thirty days, joining thirty-nine homes already there. Only five in that range have sold thus far this year, but obviously the revival of the $1-$3.5 market has convinced some people that their time has come.

They may be wrong.

Accepted offer in Havemeyer

33 MacCarthur Drive: roof, chimney and driveway included!

33 MacCarthur Drive, $1.1 million, gone in 7 days. The owner paid $905,000 for it in 2008 and clearly put some money in it, but not so much as to prevent her from making some money on this project (she’s a real estate agent, so commission costs will be reduced). I might quibble with the use of the term “understated elegance” for a home in Havemeyer – I prefer “elegant without being overly ostentatious” myself-and I’d point out that, at a million-bucks plus, people probably expect to find that the “master bedroom suit has a full bath”, but all that really counts is whether she priced this right, and she obviously did.

A buyer for everything, at some price

Two listings to illustrate that.

326 Cognewaugh

326 Cognewaugh Road, $1.275 million, reports an accepted offer. This is about as typical a 1993 builder house as you can find, and stuck in the middle of winding Cognewaugh Road, with no back yard to speak of and plain, plain plain. One of my clients asked about it and I told him, “it’s not for you, but at this price, someone will buy it”. Looks like they have.

18 Porchuck Rd

18 Porchuck Road, on the other hand, is still trying to find the magic price. It was brought on the market by Ogilvy at $9.5 million back in June, 2012 and has suffered the indignity of a number of price cuts since, one of which was the subject of a certain amount of derision on these pages back in August.  Another cut came today, when $1.3 million was sliced off yesterday’s price and the house can now be yours for just $4.5 million. Will this do the trick? We’ll see.

The exception that proves the rule

66 Glenwood

66 Glenwood Road, Belle Haven, was listed by its agent Chris Finlay for $6.750 million yet despite that preposterous price, he still managed to get it sold in under four months, for $5.1 million. Usually, too high a price simply kills a listing, so hats off to Finlay for avoiding that fate. It might be interesting to consider whether a better price could have been achieved had it been priced right to begin with, but that’s just pure speculation.

Gentlemen, start your dozers!

On the other hand, that same Mr. Finlay has probably hit the end of the nail upon its head with his new Belle Haven listing, 211 Otter Rock, at $5.4 million. This ramshackle old house (listing says “as is”), sold for $5 million at the height of the market in 2008, and it’s probably worth almost close to that today, so adjusting for the necessary sacrificial anode of that $400,000, the price seems right.

Clapboard Ridge

Leslie McElwreath’s new listing at 218 Clapboard Ridge, $25 million, is profiled in today’s Greenwich Time.  Here’s what Leslie has to say about the street, and the house at 218:

“There’s been a lot of activity on this street, starting from here and going all the way over…”

On July 3, a home at 75 Clapboard Ridge Road went for a little more than $9 million. Twelve days later, 89 Clapboard Ridge Road fetched $3.45 million, followed by 124 Clapboard Ridge Road’s $3.65 million sale on July 17.

At Linden Court, the current owners “took it down to the studs and expanded it” when they purchased the house in the early 2000s. With a modern exercise room, theater, eight fireplaces and eight bathrooms along with three powder rooms, it balances old world charm with modern conveniences.

“It’s really a trophy property,” she said. And while a price tag of $25 million will certainly narrow the perspective buyer pool, she said she’s not concerned about the possibility that it will sit on the market long.

“There are pockets of people looking for something special,” she said. “And this, this is something special.”

Leslie’s a top agent – truly one of the best- and if she’s optimistic about this home’s prospects at $25 million, who am I to gainsay her?

Bust heck, what’s this blog about except to do exactly that?

To date, the top selling price on Clapboard Ridge is $10.6 million, and while there have been 6-8 sales in the $10s ,$10 million is not $25; not even using math as taught today.  Of all those top-end property sales,  the one I see as most comparable to 218 is 97, which sold in 2008 for $10,350,000. Here’s why – take a look at the two listings, both on the same road, same neighborhood (218’s listing describes it a located in Khakum Woods, but it’s entered via Clapboard, not the association’s main drive, which places it “of the wood, but not in  the wood”, as I see it).

218 Clapboard Ridge: 1929 construction, renovated “from studs out” in 2004. 5.11 acres, 13,080 sq.ft. asks $25 million.

97 Clapboard Ridge: 1925 construction, renovated by Hobbes, a premier builder, in  2006, 5.34 acres, 12,200 sq. ft., sold in 2008 for $10.350 million. 

I understand the art of fruit comparison, and appreciate the difference between an orange and an apple, but these two look like peas in a pod or, if you insist, two apples. A Jonathan and a Northern Spy, perhaps, but they didn’t fall far from the same tree.

Of course, that’s just my opinion, and like Leslie, I’m “not concerned about the possibility that it will sit on the market long”. But the cause of my indifference is different from hers: it’s not my listing, so why should I care?.

A final shot of real estate news for the day: price cuts

Five of ’em

31 Chapel Lane

31 Chapel Lane, Riverside (and when have you seen a price cut in Riverside? Must be serious), from $2.295 then, $1.995 now. Sold for $2.270 in 2004. I’ve somehow missed seeing this house, but Chapel’s a decent street, albeit with noise.

5 Knollwood

5 Knollwood sold for $2.850 million in 2006, asked $3.995 million back in May, wants $3.195 today. There were some improvements made after that 2004 purchase, so even at full price, this won’t be much of a home run.

15 Reynwood

15 Reynwood is now at $13.750 million after being for sale since 2007 (!), when it asked $23.9 million. Still offering a mere 2% commission which might have made sense when its deluded owner thought he’d be getting $24 million, but after all these years he’s going to need the cooperation of every agent in town to find a buyer for a property no one has wanted in six long years.

122 Clapboard Ridge

122 Clapboard Ridge will accept $3.6 million. The listing says it was built in 1998, in which case its caveat “as is” seems odd – can a house really deteriorate that much, so badly, in such a short time? Doesn’t inspire much confidence in the builder, certainly. Judging from its mortgage debt, there are a couple of lenders out there who’d heave a sigh of relief if this fetches anything close to this price. On the other hand, who knows disappointment better than banks, these days?

Fortunately, salt water melts snow

And over in Byram, 3 Gamecock has not actually reduced its price, it’s just back on the market at exactly the price; $1.150 million, it’s been seeking since 2010. That s, however, an improvement from its first price of $1.498 in 2009. Four years, no buyer, and now FEMA flood zone regulations – bad combination.

Open House report

Three suitable for comment, in my opinion.

20 West End Avenue

Star of the day was undoubtedly 20 West End Avenue, $4.189 million. The drawback first: it’s on a long, shared driveway, and everybody hates those. That out of the way, the house is fantastic: open, beautifully finished, just livable and unstuffy. I didn’t hear a negative word about it from the dozen or so brokers who were there when I was, and in this nasty business, that’s unusual. Is this the right price? Who knows, but it feels about right.

340 Stanwich

340 Stanwich’s price I’m not so sure about. It’s asking $3.495 million which, on first walk-around, I figured was at least $1.2 too much, but that’s before I went outside. Inside, it has a nice, but cluttered layout that looks as though it would make for excellent entertaining space. The clutter can be removed of course (one man’s clutter, by the way, is someone

view from 340 Stanwich patio

else’s prized possessions, I get it – but I’m looking at it from a buyer’s perspective, not a collector’s). There are bedrooms upstairs that feel like a ski lodge dormitory but that could also be changed.

It’s the outside that transforms this place – 3.5 acres, including a pool an a great lawn sweeping down to Frye “Lake” (I was told by father that any body of water you can see across is a pond “unless”, he added, “you’re a real estate agent”. I’m a real estate agent now, a life decision that would have my father spinning in his grave, if he had a grave, so I’ll go with “lake”).  But all that land poses a problem: it, and the pool, and the Frye Whateveryoucallit, are down a long, steep stairway built into a rock wall. Not a big problem at all for an active family, but the house itself will presumably a couple of old fogies who need its first-floor bedroom. So that’s a conundrum, but one I’m sure will be worked out by the market. Stay tuned.

40 Winthrop

40 Winthrop Drive in Riverside is priced at $3.395 million, a price that gave me pause when it came on this week and still has me a little unconvinced after seeing it; a little, but it also wouldn’t surprise me if it sold for this price. I think I’ll follow the lead of our president and Senator Markey and vote “present”.

Plus side: very nice inside, good layout, and a fantastic yard, in the back and on the (western) side. These days, finding an acre of yard in Riverside is just about impossible, and an acre on Winthrop, a beautiful, traffic-free street within easy walking distance of the schools and trains, is even rarer. If someone pays what I consider to be a premium for this location and this acreage, I wouldn’t be surprised.

I do think, however, that if you’re reaching for top dollar, it would be wise to spend a little bit up front to make a good first impression. This is a pretty plain looking house as is, and a rusty handrail on the front steps, an uneven, sagging stone walkway to the front door and a banister on the third floor that threatens to fall off in your hand raises questions, unjustified, surely, that maintenance wasn’t in the budget during this owner’s tenure. I am not saying that the house is in poor condition; to the contrary, it appears to be in great shape, overall, but as a general tip to homeowners thinking of selling, fix up the minor cosmetic problems that detract from a home’s appearance. You know what your grandmother told you about first immersions? It’s still true.

We’re back!

First, some market activity that was reported while I was out enriching the Saudis.

4 Cat Rock

4 Cat Rock Road closed, for $1.750 million after 302 days on market. Nice old (1908a house and nicely renovated, it’s real problem was that it sold for $1.880 in 2005, was improved, yet sold for $1.860 in May, 2011, and when this was put back on a year later at $1.995, buyers balked, probably because they saw the price decline and speculated that it would continue down. If that’s what they guessed, they were right.

1361 King Street

1361 King Street sold, $2.125 million ($2.495, ask), proving only that you can get a lot of house for $2 million if you’re willing to live under the flight path a long way from town. Some people are.

5 Butler Street

5 Butler Street, Cos Cob, on the other hand, didn’t linger. It was priced at $835,000 and went via bidding war for $842,100. As an aside, it’s often smart to throw in an odd number in one of these things. Win or lose, you don’t want to tie, which will only set off another round of bidding.

15 Upper Cross

And waay, way up in nose bleed territory, 15 Upper Cross whacked a cool million from its price today so that what would have cost you $9.1 million yesterday can be yours today for $8. That’s an improvement over its 2011 price of $11.995 but, at least to my taste, this is about the land this old pile of stone sits on and not the house itself. So, what’s five acres near the Banksville border worth? Not $8.1 million, certainly, so we can anticipate more price reductions in the years to come. Of course, that’s just my opinion of the house; someone else may come along who falls in love with the place and will pay for the privilege of restoring it. Maybe.