Hold that line, dammit!

10 Tod Lane

In April 2005 this house on Tod Lane was listed for $2.795 million and sold five days later, via bidding war, for $2.905 million. Those were good days for sellers, bad for buyers – which makes me wonder, when Mad Monkey refers to “greedy buyers” today, whether he appliedthe same term to sellers four years ago, but never mind – today, it’s been relisted, for $2.495 million. Someone didn’t get MM’s memo, obviously, about refusing to give in to market conditions. I don’t need CEA’s sophisticated calculator to figure out that the owner is not expecting a profit on this one.

Mad Monkey’s gonna love this one

71 Fairfield Road was purchased for $1.442 million back in 2002, underwent extensive renovation and has been returned to the market today at $2.850, or almost the Monkey’s specified minimum price of $1,000 per square foot. I’m not sure how one puts $1.4 million of renovating into a $1.4 house without expanding its size but I’ll be curious to see it.

"I do wuv this, I do!"

 

The sun comes out at noon

And with it, the clouds will dissipate, the economy will heal itself and Greenwich real estate properties will return to where they were two years ago and resume their meteoric rise. Or so some sellers seem to think.

Here’s a new price reduction today, from 54 Doubling Road. Purchased for $1.5 million in 2003 and untouched since then, the owners listed it for $2.295 million this November. Not a crazy price, were this 2006, but not one that will move it today. But the owners must feel that, if  The One is coming in to heal our wounds, why give away the store? So they’ve dropped the price a whopping $46,000. Yeah, that should do it!

122 Cat Rock road may have the same problem. These owners paid $2,125,000 in 2000 and again have done nothing but live in the house since. They’ve been trying to sell it for $3.595 since June and now have reduced it to $2.950. That’s a substantial reduction, but if we’re really approaching 1999 or 2000 price levels, and I think we are, then this one still has a ways to go. Unless, of course, we really do see a miracle on Pennsylvania Avenue this afternoon. I have my doubts; many others do not.

An ebbing tide raises all (buyer’s) boats

Tomorrow’s NYT Real estate section reports that first time buyers, encouraged by low mortgage rates and huge price drops, are returning to the NYC market.

Many of these buyers have never received a fat bonus check, so they don’t miss it now. They did not suffer huge stock market losses, because they didn’t have huge stock market investments. They aren’t mourning the loss of value in their existing co-ops or condos, because they have never owned one.

They have jobs and good credit ratings, and they are looking to buy.

And now, brokers say, these mostly first-time homeowners are taking advantage of reduced apartment prices and interest rates that have fallen to the lowest levels in a generation. They’re making deals — sometimes far below asking price — on apartments marketed for under $1 million, and especially under $500,000. Still, the hard number of transactions remains depressed; in the fourth quarter of 2008, they were more than 30 percent below levels of a year earlier, according to a market report by the Corcoran Group.

———

At three tenement buildings on West 107th Street last weekend, buyers shuffled past one another as they climbed the narrow staircases, often up to the fifth floor, to look at newly renovated two-bedroom apartments in otherwise unrenovated buildings.

The buyers, some of whom said they had been priced out of the market in the boom years, were drawn back by low prices and the promise of deals.

“It is price, price, price,” said Jason Haber, a broker at Prudential Douglas Elliman. 

The same phenomenon is just starting to appear in Greenwich, and I’m glad. Look: as a real estate agent, I welcome the beginning of the return of reality because prices were crazy and getting crazier each day, narrowing the pool of buyers into an ever-thinner slice of the population. Had it continued, this price spiral would have resulted in just two buyers being able to afford Greenwich houses, Warren Buffet and Bill Gates, and Mr. Buffet doesn’t seem to share the taste of most Greenwich spec builders. Something had to give.

My pal Nancy Fountain was always amused by my fascination with hurricanes, accusing me, accurately, of taking a perverse pleasure in tracking the chaos and disruption huge storms brought to land. I love blizzards, too, so I might as well admit that watching the fall of our local market is kind of cool. 

But my extended family owns houses in town to, just like the rest of you, and I know very well the sense of unease watching the value of those assets drop. There was always something comforting in knowing that, if everything hit the fan, a couple of million was available – we might have to move to Bumfruck North Dakota to take advantage of that pile of cash, but it was there. Now it isn’t, or not as much of it is. Owning a house here was sort of like taking an airplane flight: you know there is a possibility that the plane may come down unexpectedly but what are the odds? As Thursday’s U.S. Air flight into the Hudson shows, you never know. The passengers in that one escaped with a couple of broken legs and no other serious injuries. We can only hope we land as successfully. 

So things are what they are, and we’ll see how they develop. My advice remains unchanged: if you have to sell today, or within the next year or so, slash your price to the bone and hope you attract one of those buyers looking for a bargain. If you’re buying, insist on a price that will shield you from a further decline in the market. And we’ll all get along and on with our lives, I hope.

It’s not your agent, it’s your price

A condominium at 351 Pemberwick Road sold yesterday for $735,000, 85% of its original asking price of $865,000. But the owner held onto the unit from August, 2006 until yesterday, changing agents three times and her price no more frequently. There’s really no need to go through this agony. And for those sellers who resist lowering their price out of the belief that “I’ll let someone make me an offer- I won’t bid against myself”, here’s a nice little object lesson in how a relatively small over-pricing kept bidders away for more than two years. When this unit finally dropped to $743,000, it found a buyer almost immediately. Couldn’t someone have offered 85% of the asking price way back then? Sure, but they didn’t.

Most houses aren’t really for sale

I mentioned this yesterday but today I saw that 180 Round Hill Road has expired unsold yet again and so I bring it back up for discussion. The owners of this property have been trying to sell it since 2001. First at $3.795 (expired 2002) then at $5.250, beginning in 2005. It expired Today at its last asking price of $3.795. One day, they may actually decide that they want to move.

44 Grahampton

A reader asked about this Surf & Turf listing and I told him it was on Clapboard Ridge. Well, Clapboard Ridge runs into Grahampton, so give me a break. Asking $5.995 since August. Good, large (7,000+ sf) house, nice pool and yard, good location. The owners paid $5.125 million for it in 2004 and spent a fair amount adding the pool and doing various renovations/improvements, then put it up for sale in October, 2007 for $6.995. The fact that I’d forgotten about it proves my point about over-pricing your listing: don’t do it. We see the place, dismiss it, and promise ourselves that we’ll revisit when the price drops. But then we don’t; other houses come on, inventory swells and ….. I really had no idea this place was still for sale, and that’s too bad, because at a million dollars less, it looks pretty good. Maybe not really, really good, but certainly worth considering.

UPDATE: CEA posted this comment on the original post but now that we’re writing about it here, …

That’s on Grahampton, near Beechcroft. Big house, backhard is narrow and overlooks the people behind. 0 outdoor privacy.

I knew there was something I didn’t like about it – privacy is expected at this price.

“Say, you didn’t really come here to hunt bear, did you?”

That’s the punch line to a crude joke that circulated on Wall Street maybe 20 years ago. This is a family- safe blog so I can’t tell more than the punch line but it involved a man, purporting to be hunting bear, who has a series of humiliating things happen to him during his quest.

I was reminded of the joke this morning while speaking with Rick Loh, an agent with Surf & Turf whom I respect and admire. He said something like, “well sure, there’s tons of inventory, but most of those houses aren’t really for sale.” I absolutely agree with Rick, but I wonder how many of the owners know that that’s the market place’s reaction to their pricing? Perhaps not many.

Rick, by the way, had another observation, namely that, for houses that haven’t been renovated since their purchase, we’re back to 1999 price levels. I’d been saying 2003 (and before that, 2004) and the leap from 1999 to 2003 levels wasn’t as great as in later years, but that’s still a significant drop. Is he right? Well he suggests that I pull out an old sold book from 1999, look at the prices and see how many that I nod my head at and say, “yeah, that’s about what it should sell for today.” great idea and I’ll do it. My guess? He’s right.

How to sell a house in a bad market

I can’t say which one because it’s only at the “accepted offer” phase but I just called the listing agent of a house whose huge price reduction I wrote about last week – I wanted to set up an appointment to show it tomorrow but too late. I’m not at all surprised – I emailed three of my own clients when this reduction came through and said, “bargain, in any market”. I wasn’t the only one to think so, obviously.

So the lesson is that, if you really want to sell your house, there are buyers out there, ready to act. But there has to be a price low enough (or realistic enough, take your pick) to stir them into action.

A sale! A sale!

There have been a handful, and 944 Lake Avenue (up near St. Barnabas) is one of them, closing January 8th for $3.975, not too far from its original 2005 asking price of $4.5 million. A nice Coggin’s colonial reproduction (that would mean low ceilings for you basketball players out there) set on very nice meadows, so someone has done well for themselves, but how about the seller? I’ll leave it to readers like CEA to do the math, but I can’t believe it was worth waiting 3 1/2 years to get this price when a lower price would have yielded cash sooner.

But hey, it’s their decision.

“I don’t get it!”

71 Richmond Hill

That must be what the would-be seller is thinking now that his house has expired, unsold, for a second time. He first listed it for $4.050 back in March, 2003: expired. He tried again in July, 2008, asking $3.795: expired again.

It’s a perfectly nice 1994 house with a pool and good grounds. But there must be something wrong with it that causes it to fail to sell. What could that be? I have a hunch and I bet you do, too, but we’ll wait and see whether the owner figures it out for himself.

Race against time – lost

The condominium unit # 8 at 1 Old Church Road was offered for sale at $1.865 million back in October 2007. It didn’t sell despite several price reductions and now its back with a new broker, new price – 30% off, $1.295, and a new owner – the estate of the original seller. I hope the poor lady didn’t have her heart set on moving before she died. I’ve seen such cases before and often the owner does want to move yet the sales price is too high to accomplish that. Don’t know if that was the situation here but in any event, the heirs are trying obviouslyto achieve a different result.

Some sellers are finally getting it, but only after a great deal of pain

49 Pecksland Road: Originally priced way back when at $3.850, eight price cuts later, reduced today to $2.350. It still has a swamp for a backyard, but very nice inside.

25 Dorchester Lane: original price, $2.950, six price cuts before today’s, down to $2.190. Purchase price 2004? $2.150 million. I think we’ve fallen below 2004 pricing, myself.

What’s a good buy these days?

A reader suggests that the Pecora’s new construction on Cognewaugh, now priced at just $3.150 million, should attract a buyer and of course he’d be right if this were last year. But what’s the right price today? I think everyone: buyers, sellers, agents and even appraisers is at sea right now. I toured a house today that was on a great street, very desirable once and probably still today. The house itself was, to my eye (viewing it as my current brace of buyers might) a bit cramped and too spread out. I thought it was overpriced by a million – the selling agent suggested that at its price, “it would never have lasted last year.” I think she’s wrong; I think she would never have reached this price in even the strongest market but the real point is that I don’t think she or her clients have accepted today’s reality. She sounded resentful that it hasn’t sold and if she is, her clients probably are too.

If they ever existed, the days of pricing in the stratosphere and being confident that, if the address were right, someone would pay it, are gone. When sellers finally realize that, we’ll start seeing movement in our inventory. Until then, we won’t.

Times are bad? Shoot the moon!

When it sold as a building lot in 2007, 1 Charter Oak in Byram set the record for its street at $1.5 million. The existing house was razed, a new one twice its size built, and now it’s for sale at $3.2 million. While it is undoubtedly true that, as the listing promises, one can enjoy a water view by peering down the street, across Byram Shore Road and past the houses thereon, that water is about 500 yards away. About a football field’s length the other way one can enjoy a view of I-95. For truck spotting fans, that’s probably a good thing.

$3.2 million? This will be interesting to watch.

22% Off

59 Old Mill Road

This cottage has been marked down to an even $2.0 million (actually, $1,999,999, but that’s a little too precious for my taste). It’s been renovated, and $2.0 certainly looks better than its original tag of $2.495, but it is literally on the Old Mill Northbound Merritt exit and entrance. Just before you merge, hang a right into the driveway and you’re home. I had the listing before it was renovated and tried advertising it, “EZ ON/EZ OFF” but it didn’t help. We’ll see if this price cut does.

Eliminate fixed asking prices?

Buckingham Palace

The Brits and their former colonies, except us, advertise their houses as “inviting offers between ….. and ……”. These days, when no one seems to know what a realistic asking price is, perhaps we in Greenwich might adopt that approach. I stopped by that new construction of Byfield the other day to see if the listing agent could explain how its price dropped from $9 million to $5.1 million and back up to $5.9 million. He basically shrugged and said, “who knows what it’s worth?” I refrained from giving him my guess but he has a point. An ad that said, “entertaining offers from $4,750,000  to $5,350,000” (just to pluck some numbers from the air) might not elicit any offers, but it would send a strong signal that the seller was willing to negotiate, provide some sort of floor defining what, at the present time, a seller considered a low ball offer too low to consider, and would spare him the embarrassment of looking  as foolish as he does when he’s yo-yoing the price up and down.

Just a thought.

Riding along in the tumbling tumbleweeds

45 Upland Drive

January 2007: $9.25 million

January: 2009: $7.850 million

Who’s tired? I’m not getting tired!