Two properties whose price and sales histories have not been cleaned up (yet) expired unsold today, for the very good reason that they were over-priced (attention B.J. O’Rourke, lawyer attorney and member of the bar: the marketplace determined that conclusion, not I).
12 Doubling Road, originally a 6.68 acre parcel with a great old, tired house on it was listed in ’04 for $14.5 million. The house and 3.75 acres of the land it sat on were carved off and sold for $7.575 in ’05 and the remaining land met a similar fate in 2006, when it sold for $4.130. The house was renovated and put back up for sale at $13.5 million last September and never dropped its price, despite the resounding silence of the market to its presence. It expired today and whether it will come back again or the owners have decided to stay put and enjoy the work they put into the place, time will tell.
A ridiculous example of over-pricing, 54 Rock Maple Road (off Stanwich) also expired today. Purchased new in 2002 for $5.3 million, the owners made no improvements worth mentioning yet put it back up for sale in September, 2007, at $11.750 million. When I speak of houses that aren’t seriously for sale, this one comes first to mind. Five price-cuts and two or three brokers later, it finally reached $6.950, which would probably have been a good place to start two years ago. Now that it has sat and been laughed at since then and the market for homes in its price range has evaporated, I predict an out-of-pocket conclusion to this sales experiment.
Yes, it’s Tuesday again (seems to happen quite frequently these days) so once again there’s an opportunity to revisit old favorites and see what’s new to the market. I will confess that I’m not particularly swayed by brokers’ notes on the open house list calling a new house right on North Street “an incredible value” at $8.995 million, or tired old, over-priced building lots, “a rare opportunity”. What’s a little bit scary is that in my darkest moments I think that the brokers actually believe their own nonsense, which would explain why we’re so far out of adjustment from reality. Oh well, it’s always fun to have a good chuckle before lunch.
I linked to a WSJ column awhile ago in which the author, clearly a man after my own heart, discussed house listings as being divided by the “have to sells” and the “don’t have to sells”, and how that affected their respective pricing decisions. Today a house on Oneida Drive that was originally listed in January for $7 million was dropped to $5. And also today, 5 Lindsay Drive, land, was renewed at $4.950 million, where it has been, unsold, for the past year. One of those houses is owned by a serious seller, the other by someone indulging in a Zillow “make me move” fantasy. I won’t be bothering the owner of the latter.
150 Pecksland Road, listed at $6.250 million in May, 2007, was deleted today from our listings and has immediately reappeared at a new price of $4.789. Sellers do this because the Greenwich Multilist is so easily fooled – the listing now makes no mention of the original price or even hints that the house has been lingering. I don’t think I have a problem with this, actually – a stale listing date harms the seller and if a buyer is curious (and he should be) his or her agent can easily dig up the information. I just mention it so that you’re aware of the practice.
In any event, I looked up the sales data on this house and it sold for $1.880 million in 1989. Using the CPI calculator, that’s $3,106,420 in 2007 dollars, and we’re obviously not there yet. Of course, the place hasn’t sold yet, either, so the jury’s still out. And, although it didn’t help 7 Gisborne’s price, like it, this house was extensively renovated in 2006. That used to count for something.
He’s talking about stocks, not real estate, but I think the principle applies: if you can find a house priced at a level that mirrors the Dow’s current depreciation, buy it. If not, wait.
159 Lake Ave
(Notice the correct spelling, Hiram? Boy, do I feel sheepish!)
This place on lower Lake was “renovated” in 1993 and sold in 1995 for $468,000. In 2008 the buyers priced it at $1.395 and now have reduced it to $1.170 million. Are we closer to 1994 prices than 2004? We’ll see.
7 Gisborne Pl
This Old Greenwich house sold for $1.810 million in April, 1999. The buyers renovated it and added on, then sold it for $2.860 in January ’07. Those buyers tried reselling it for $3.095 but were unable to find a buyer until they lowered its price to $2.5 million on January 27 of this year. It went pretty quickly then, and yesterday was reported as under contract.
718 North Street
This North Street property continues to encounter difficulties in finding a buyer, despite it being a nice house on a beautiful setting. It sold for $3.583 in ’01 and was put back up for sale in 2004 at $4.350. It didn’t sell and the owners pulled it from the market until May, 2008, when they again asked $4.350. No takers still, so yesterday it was reduced to $3.2 million.
That’s pretty safe, eh? But this Moody’s report predicts that those areas already hardest hit by foreclosures and lowered prices will hit bottom in the last quarter of 2009 while other markets just entering the morass (that would be Greenwich) will continue to decline until 2010 or longer. Attention Greenwich/Naples residents: Moody’s predicts Naples prices to settle 70% down from their peak. Owie.
66 Perkins Road
I’m heading off soon on the Thursday open house circuit (and you thought this job was all about glamorous women and exotic locales) and one house I’d like to revisit is this one on Perkins Road. It seems to provide a good indicator of what’s happening in the market.
This was a tired old house in 2005 when it was put up for sale at $2.995 million, proving that, even at the height of the market, people could still manage to overreach, but it did eventually sell for $2.2 million 14 months later. That sale probably marked the high water level for Greenwich real estate in this cycle, at least. The new owners renovated it and put it back on the market in November 2007 for $3.6 million. A year and some months later, they have reduced its price to $2.75 million. It still hasn’t sold but I’m sure it will eventually. My question is, how much will all the renovation prove to be worth? I figure the sellers will need at least $2.350 million to break even on just the land purchase, leaving $400,000 to recoup the expenses of remodeling. That’s probably enough, but if the price drops much further before this place sells, someone will be left sucking wind.