Price cuts

I won’t vouch for these new prices but at least the owners are getting serious. 142 Cat Rock, a really nice house, in my opinion, was purchased for $4,050,000 in 2005 and is marked down today to $2.995 million. There has to be some value there, don’t you think?

8 Sherwood Lane is not particularly appealing to my taste, but it has dropped from $5.8 million in 2007 to $3.8 today.

And then, just to prove that we still have stubborn sellers among us, 4 Old Camp Lane makes its return today, at $1.975 muillion. Each year, beginning in 2006, this house has appeared on the market. It asked $2.345 back then and, at least to my mind, its new price is not significantly different.

So what didn’t the broker understand?

25 Dairy Road

This house on Dairy Road, right across the street from the site of the Andy Kissel Massacree, was built in 2003, sold for $7.3 million in 2006 and put back on the market in April 2008, unchanged, for $10.5 million. Some of us – not just me, but several agents who saw it – weren’t taken by that price, as recounted here, when New York Times reporter Peter Applebome was invited in to take the broker open house tour.

The Greenwich market probably peaked in the fourth quarter of 2005 and has been slowing since, but this is the first time there’s a whiff of panic in the air.

After sampling the quiche and crudités at the lunch buffet in the empty kitchen of one of the new houses in the Golden Triangle area of Greenwich’s mid-country, the brokers wandered around with the air of picky estate appraisers.

Yes, it had the basics: 6 bedrooms, 7 ½ baths (it is practically illegal in Greenwich to build houses in which the future investment bankers of America don’t have their own bathrooms), master suite in the master wing, pool, spa. But at north of $10 million, in this market, well, maybe the closets were a tad small, the fixtures kind of ordinary, the mix-and-match exterior of stone and clapboard generic enough to be best described as neo-neo.

Mr. Fountain figured it would eventually sell for $7 million. Someone else said $7.5. The high estimate was $8, but she was talked down to $7.5 as well.

“It’s going to be an interesting market,” said one.

“It is an interesting market,” said a second.

“It’s going to be a challenging market,” said a third, and the escalation stopped there.

That was then – it took until today, but its price has finally been dropped to $7.750. Catch a falling knife, eh?

Similarly, another listing, this one at 591 Round Hill Road, was purchased for $4.584 million in 1998, placed back up for sale in 2007 for $9.5 million and reduced today (same broker – a busy weekend of client meetings?) to $7.150, a little below its assessed value of $7.277. My point, if I have a point, is that you can list your house at the highest price any agent promises you but in the end, you have to concede to the market. And the market isn’t rewarding silly prices right now. That was then, this is now.

Sellers cutting prices – who’d a thunk?

Price cuts by sellers nation wide, according to Trulia.

The combined value of reductions was $27.1 billion in the year through July 1, Trulia said in its previous monthly report.

Sellers of higher-priced properties in states that haven’t been hard-hit during the housing recession may be “catching up with the rest of the country,” Flint said.

Discount Centers

Connecticut, Massachusetts, Rhode Island and Illinois had the highest share of homes with price reductions at 33 percent, followed by six states at 29 percent: Oregon, Washington, New Jersey, Minnesota, New Hampshire and Maryland.

No contracts today but 19 insignificant price cuts and some retreads

There are a number of tiny price cuts today which will accomplish nothing but it’s interesting to see the cumulative effect of some of them. 17 Hendrie in Old Greenwich started at $7.750 back in April ’08 an dis down to $4.995 as of today. 361 N. Maple, an 1865 house not dissimilar to 357 Stanwich discussed earlier, also started in the $2.6 range and  is down to $2.0 million now. 6 Chieftans has never sold, I believe, but tried for $6.196 in 2007 and is back on today at $5.475. Assessed value is $3.4 – just saying …

212 Shore Road, that scrap of land overlooking Lucas Point Beach and Long Island Sound sold for $3.535 in 2005, sold again a year later for $4.975 and those buyers tried to keep that math going by listing it for $5.695 in 2007. Oops – the music had stopped by then. Today they’ll take what they paid for it: $4.975, but the funny thing about deals like this is that sometimes the record stops spinning clockwise and, after pausing, resumes in a counter-clockwise direction. Assessed value is $2.232. Again, I’m just saying.

There’s more, but nothing particularly noteworthy.

A sale and a price cut

27 Ford Lane

27 Ford Lane, new construction in Old Greenwich, asked $4.550 million, just sold for $3.576. The builder paid $2.085 for the land in ’07, so I wouldn’t call this a home run, but it’s a nice house and I think the buyer got a fair value. ML# 72676

3 Roger Rd (Lane? Off of Baldwin Farms) was renovated and sold for $4.595 million in 2002 and sold again for $5 million in August, 2005. That buyer has now dropped it to $4.195. ML # 73134

Price reduction

502 Cognewaugh (ML # 72847) reduced to $5.495 million. Original price in 2007 was $6.995. Highest price ever paid on Cognewaugh was $5.250 in March, 2007, at the height of the market. This is a great house and should have sold by now but this is not the market to try to set a price record on a street (I’d mention a certain spec house in Riverside as an example but I think I’ll give that one a rest).

Price cuts

15 Quail Road, listed at $6.250 in April ’06 has yet to sell and today took its fifth price cut, to $3.9 million. Not for nothing, but 70% assessed value is $3.502, so perhaps we’re getting somewhere here.

2 Le Jeune Court shows  the regrettable fortunes these days of previous winners of bidding wars. The place was listed for $1.1 million back in ’05, the present owner “won” with a bid of $1.2 and has now dropped his price to $998. Assessed value, $638,000.

44 Riverside Avenue, a nice house that, were you so foolish, you could open a window and pat the roof of trucks whizzing past on I – 95, sold for $890,000 in 2005. The new owner tried to get $1.075 million for it last year, perhaps hoping that the highway had shifted north and away from his house during his ownership, and today dropped it to $950. Assessed value is $840, which seems optimistic, to me.

“We’re wildly busy, but not as productive as we’d like to be”

So said a noted realtor recently when asked how business was. The lack of results for all that activity (on everyone’s part, not just this one broker) may be explained by the reluctance of sellers to acknowledge the new reality of the market.  From time to time, I like to point out examples of where the market is today and here’s one more:

200 Lake Ave

This beautiful old (1889) house was purchased for $1.975 in 2003, extensively renovated in 2004 and placed for sale in 2006 for $2.850 million. It hasn’t sold, despite its charm and now, three years later, it’s back where it started, pre-renovation: $1.995. This is reality, the rest is just clouds in your coffee, as Carly Simon once sang.

Compounded mistakes

1 Charter Oak

Hmm – here’s a project that’s not going well, and no wonder. First of all, the builder, an experienced local boy so who knows what was going through his head, paid $1.5 for the land back in August 2007. Not only was that awful timing, he paid the record amount for the street and previous sales included a house (!). Charter Oak may be, as the listing for this describes, “in the Byram Shore area” but as everyone knows, Byram Shore Road on the waterside is a completely different animal than the landside, and Charter Oak is landside. We’re talking $23 million vs. $1 million, just to give you perspective. 100 feet, $22 million – go figure.

Okay, so he over-paid for the land. Next up, he lists it for $3.2 million last January, or 3X more than anything on the street has sold for before. It’s a wonderful house and some family will be very happy in it but who would pay that much to be a pioneer? No one, apparently, because he eventually, and much too late, lowered the price to $2.995 in March. Today he made another mistake by lowering it again by just $200,000 to $2.765 million. I keep saying this but it can’t hurt to try again: at this price range, buyers have already discounted your offering by at least that much, so if you aren’t getting offers, itsy-bitsy price cuts aren’t going to do it. Go big or stay home, says I.

Oh, and one final mistake? Check out the snow in the picture. On the eve of Memorial Day, I can’t think of a better way of demonstrating that no one, buyers, seller or listing broker, has any interest in this house. Not smart.

Price cuts – how much and how often?

Two houses with new prices today illustrate the difficulty sellers face when trying to adjust their price to draw a buyer. 25 Selden Lane dropped $300,000 to $4.495, hardly large enough to draw attention these days, when buyers have already discounted it by at least that much.  65 Tomac Avenue saw a similar dip to $3.795.

But both these houses are now about a million dollars less than their original asking prices: $5.250 for Selden, $4.860 for Tomac. Had they had a million whacked off their price a month after first being listed, that would have attracted buyers’ attention, but who wants to do that? So it’s tough – you end up like that poor guy at 187 (?) Stanwich Road, who has been taking $10,000 a week off his price since Hector was a pup and still can’t unload the place. Dramatic action is called for, I think.

By the way, I wonder what the reaction of the sellers would have been to offers a million less than their asking price when the houses first came on. I suspect the angry owner and her agent would blame those horrible readers of that horrible blog, running around town making irresponsible, unreasonable bids! That’s my guess.

More price reductions

46 Terrace Ave

46 Terrace in Riverside sold for $1.925 (bidding war, I believe) in 2007. Asking price as of today? $1.525.

 

38 Khakum Wood, a building lot purchased by Scott Lawler (Broadway Partners) for $4.8 million, is down today to $3.8. That’s bad enough, but Scotty, while busy  building Broadway Partners up into a REIT behemoth and watching it implode this year, poured a fortune into a foundation for a 17,000 sq. ft. house (and doesn’t every rich man want to start a foundation?). He put the land and foundation back on the market for – I am not kidding, this is not a typo – $8.5 million in 2007 and has been slicing that price ever since. So what’s a three – acre building site in Khakum Wood worth? Not $8.5 million and probably not $3.8, either. But at some price, someone will want this dirt pile, won’t they?

UPDATE: Thanks to Frankie Foker, here’s a story about Lawler’s woes from a nifty website called Developerimplode.com. The site’s so much fun I’m adding it to my links. Is this a great partnership or what?

The Queens native, who owns multiple homes in Greenwich, Conn., and Nantucket, Mass., is a self-made mogul. He started Broadway in 2000, after stints at financial outfits including BlackRock and UBS.

Broadway’s first purchase, a former school in Westchester, cost a mere $4.8 million. The company grew modestly until 2005. At that point, Mr. Lawlor switched to the fast track, launching a series of real estate investment funds backed by large pension funds and others. At about the same time, a dispute over how the fund’s profits would be paid out led three of Mr. Lawlor’s partners to quit, with two of them suing him for back pay.

In 2006, Broadway bought its first Manhattan office tower, paying $216 million for 660 Madison Ave. After that, Mr. Lawlor picked up the pace as he piled on more debt. In the same year, he bought 10 buildings from Beacon Capital Partners—including Boston’s striking John Hancock Tower—in a $3.3 billion deal. Six months later, he purchased 24 more buildings from Beacon for $5 billion. Little more than a year ago, with the credit markets already seizing up, Mr. Lawlor added another trophy, 280 Park Ave.

The question now is how much of that empire he will be left with when the commercial real estate recession that is only just beginning finally hits bottom.

“Is Scott smart? We’ll see how much he loses on the way down,” says Steve Klein, a managing partner at Joss Realty Partners who also sued Mr. Lawlor for back pay

Realism or a down market?

I’d say realism, in this case. 11 Mountain Wood Drive is back on the market, now listed for $3.750 million. It’s a 1978 house on two acres that was originally listed for what I thought the laughable price of $6.250 million in May of 2007, eventually changed brokers and was relisted for $4.950 in ’08, and now here it is again, still another million lighter. Original listing showed 4,072 square feet, now it claims 5,922, all without benefit of a renovation or addition. Gotta love those rubber rulers!

70% rule has it at $2.493 million, just if you’re counting.

Not every price cut can be blamed on the recession

29 (?) Topping Road failed to sell for $37 million four years ago so in 2008 the seller raised his price to $45 million. Only God knows why that tactic didn’t work but regardless, he’s down today to $39 million. It doesn’t come with a real house on it, like his neighbor Leona’s does but, at least for now, it’s cheaper. dream on.

14 Bayside Terrace in Riverside was priced at $1.495 a few monthgs ago and came down today to $1.295. That would probably have been a better place to start.

Price Cuts – getting there

Heard of a sale today up the line: seller paid $3.6, had it on the market for two years and sold it today for $1.6. We haven’t quite reached that point here in Greenwich but I am seeing more and more houses at least approaching reality. Three today of note:

99 Husted: Asked $5.250 million in ’08, now $4.150

11 Pinecroft: Asked $4.350 million in 2007, now $3.295

180 North : Asked $5.495 million in 2007, now $4.495

Eventually, these will all sell. If your house still occupies their original price point, you might want to consider what will happen to a bank appraisal should you be lucky enough to find a buyer. Because if your house doesn’t compare to what the lender’s appraiser considers a comparable house, there will be no financing.

An end to all that?

One of the brokerage firms in town – Prudential, I think – has been running some odd little campaign where their listings are priced so as to end with 876 dollars. I have no idea what the point is – didn’t get the memo, I guess – but I notice today that 62 N. Stone Bridge Rd, previously priced at $1,644,876 has been reduced to $1,640,000. I don’t believe a $4, 876  reduction is expected to flush buyers out of the shrubbery – certainly no such fortunate thing has happened since September, as this price was slowly reduced from $1.830 million – so perhaps the marketing campaign has ended and more traditional pricing is coming back.

Or not – I’m just guessing. I’m also guessing that a 10% cut from September ’til now won’t be enough to move a house in today’s market, but perhaps I’m wrong about that, too.

Don’t blame this blog, blame sellers!

10 Taconic Rd

I get a tremendous amount of flack from fellow agents, all blaming this blog for the death of the Greenwich market. (My favorite quote: when someone defended me to a broker by saying, “well he’s just telling the truth” the broker responded, “how dare he!”).

But as I’ve suggested before, I’m not the one driving this death spiral, I’m just reporting it. Every day, buyers receive a message that is exactly contrary to what some agents are telling them, to wit: prices are falling, and if you wait, or toss out a low ball offer, you will benefit. Take the lovely home pictured above. In July 2008 it was priced at $8.6 million. Today it’s been marked down nearly $2 million, to $6.750. 84 Meadow Wood, in Belle Haven, asked $7.150 last June and today will accept $5.950. 34 Perna Lane, in Riverside, wanted $975,000 in October ’07 but will accept $750,000 today.

And so it goes. I represent a buyer who bid $4 million on a $7 million house last summer. The seller wouldn’t respond but has now lowered his price to $5 million. $4 million may still be unacceptable but the lesson my buyer learned is that by waiting a bit, he saved $2 million. He’ll wait a bit longer, and who can blame him?

Same thing, by the way, for rents. Today two price reductions were posted for houses on Milbank. Each started out a few months ago around $8,000, and now the owner will accept $4,000. So don’t blame buyers, or other agents, for low bids. Experience is telling buyers that they’d be chumps to offer anything like full asking price.

Mark of the Devil: 666%

121 Old Mill Road

Or perhaps the mark of a sensible seller. This house on Old Mill, perfectly nice but showing definite signs of wear started off at $8.250 back in June. Today it dropped to $5.495 million, which is getting there.

1/2 price sales

30 Strickland Rd

Well not quite, but there are a number of houses that have dropped way off their original asking prices – which is not to say, by any means, that their value has dropped that much – these houses were overpriced to begin with (an opinion based on the fact that they didn’t sell for what they asked) but they’re certainly approaching, and some have reached, a realistic level.

Thirty Strickland is a neat old (1749) house that could probably use a thorough renovation, but I love it the way it is, and it has a rentable cottage in the back that could offset some of those costs, perhaps. I think I’d have liked it better in 1749 before the Thruway went up a few hundred yards away but what is life if not change? This was listed last summer at $1.750 million – today it’s asking $995,000.

24 Maher Avenue, praised in this blog just recently, has dropped its price yet another $100,000, to $2.395 million, down significantly from its first price of $3.175 last April.

614 Riversville Road, another antique (1850) on four acres, started its latest sales history in 2007 priced at $4.2 million. Three brokers later, it’s back on the market today for $2.6. Wise decision.

Maher Avenue

24 Maher Ave

This nifty old house was reduced to $2.495 million today, a price that should attract more buyers than did the original price of $3.175. While one house on Maher, #25, did sell for $3.505 in 2006, nothing before or since has broken the $3 million barrier that I’m aware of. April of 2008 was, in retrospect, not the best time to try breaking that threshold again. At this price, it should attract those who like Maher, and they are legion. I myself consider it too close to the Brunswick kids and their Lexus SUVs on the street but I’m just an old grump.

Sparks of activity

28 Welwyn, Rvsd

28 Welwyn Road, off of Indian Head, has gone to contract today. Listing price is $3.650 million so that’s a nice sign. Good house, built in 2003 either for the present owners or they bought it from its builder but a solid home and Welwyn’s a great street.

35 Sunshine Ave. also in Riverside but north of the Post Rd. was reported as under contract before, I think, but in any event, it’s there now. This house needs replacing, even though (or because) it served as home for those rowdy Kaye kids, and was listed as land, first at $790,000 back in July and then this February at $650,000. The last reduction seems to have done the trick.

Thene there are some price cuts reported today that, while they aren’t yet sales, at least show that their sellers are getting serious. 173 Stanwich, a contemporary on 2 acres, originally came priced at $3.595, today it’s $2.195. Two Grimes Road, in Shorelands, sold for $1.250 million in 2000, was put back up for sale in 2004 at $1.745 and sold in a bidding war for $1.904 (remember 2004?). Those buyers tried getting $2.795 in May, 2007, and after two years of waiting for a buyer to appear have reduced it today to $2.325. Twenty-sixValley Road, a speck of a lot in Cos Cob, debuted at $640 in May and has now dropped to $425,000. Thirty-seven Midwood, off of Glenville Road, tried things out at $1.750 for awhile and is $1.395 now.  And then we have 98 Glenwood, in Belle Haven, which must have had a beautiful setting when it was built in 1838 but which now overlooks the Belle Haven Club. Nice water views and how painful can it be to look over a beach club, but still, its first price of $16.8 million brought to mind Crazy Eddy and not necessarily in a positive way. It’s got a new broker and a new price today: $12.5 million. Still a tad out of my range, but an improvement.