Pricing decisions

718 North Street

This is a nice house, in need of renovation, perhaps, that was bought for $3.583 million in 2001, relisted for $4.350 in ’04 and slowly whittled down to $3.2 before being yanked today and put back on at $3.3 million. Okay by me, what the hell – nothing else seems to be working.

 

 

43 Doubling

This optimist on Doubling Road paid $5.155 in April 2008 and has got it back on for $5.2. Nice house, if you like that front-loader-garage sort of look – I don’t, but that’s just my taste. I’m thinking that the market has declined since last year but again, no one says you can’t try. Perhaps the owner drove a shrewd bargain back last year.

 

Finally, another property that had dropped below half its original asking price suddenly jumped $4 million today. Why? Perhaps the owner has come into cash and can now afford to wait for a good price. Or, possibly, he’s setting up a short sale and is receiving too much traffic to convince a bank that he’s cooked. If the latter is the case, and if it works, look for massive price increases to appear all over town. Wouldn’t that be amusing?

Something’s got to give

I have a good selection of clients spread through the bulk of the Greenwich price ranges ($1 – $4.5 million) and I’ve grown as frustrated as they are by the lack of what we perceive to be reasonable prices. For instance, there are houses perfect for my $1, or perhaps $1.2 clients, but they’re all priced at $1.695 and above. Their owners may think that’s an appropriate price but comparing them to houses that have sold for $1.3, for instance, these are clearly worth just around a million. But we won’t bid.

It’s the same situation all the way up the price scale. $4.5 houses still asking $5.9, $2.5 asking $3.75 and on and on. People like Mad Monkey and my brother Gideon are positive that it’s the buyers who are wrong but I disagree. More important, the buyers are the ones with the checkbooks and theydisagree. It’s all reminiscent of the Antares fiasco; many of us saw it coming but they kept staying alive, year after year, proving us wrong, until we were right.

Smart sellers

No one’s going to steal theirhouse! Just heard of yet another story of seller idiocy where a seller who priced his house at almost $4 million a year ago and dropped it to $2.8 with great reluctance, rejected and refused to counter an offer of $2.5. Now just consider: the assessed value is $1.7 million, the house needs at least a milion dollars in renovations because it seems not to have been touched in the 120 years since it was built and the pool of buyers willing to do that kind of renovation is increasingly shallow. So after a year and a half, one finally shows up and you turn up your nose? The only encouraging thing about this tale is that it is common, and sellers daunted by the huge inventory presently afflicting our market can find some solace in knowing that much of it isn’t really for sale.

Tearing up the pea patch

Pretty quiet days in real estate, for the most part. I refuse to get excited about the sale of 480 North Street for $4.750 million, $250,000 more than it was purchased for last year because I don’t believe its reported price, even if a fine firm like Coldwell Banker says so. It is possible that this house is the only exception in Greenwich that actually increased in value this year but I’m from Missouri.

More typical is the new listing right up the road, 510 North. Listed by David Ogilvy for $11.5 million in 2002 (yes, we had wacky prices even then), it languished until 2004 when Sally Malone got hold of the listing, cut the price to $9.450 and finally, in 2005, sold it for $6.550. Today it’s back, asking $5.995. The seller obviously made a poor choice in brokers – if he wanted to make money on this deal, he should have chosen the miracle workers at Coldwell Banker.

Another new listing that won’t set the landscape on fire, now, is some new construction at 29 Old Wagon Road, asking $1.895. I’m fairly certain that the best that street has achieved was $1.995 and that was for far more house at a far better time. But there’s hope – if Patriot Bank holds the construction note on this project, it may very well end up being reported at $3.2 million, and won’t that make the neighbors on Old Wagon happy!

The customer’s (often) right

There’s a new price reduction on a house today – I can’t reveal details without disclosing old negotiations, but I think it’s okay to say that a year ago, a client of mine offered 87% of what is now the new price. At the time, the offer was a much lower percentage of the ask: 64%, I believe, but the seller has now paid taxes and maintenance on an empty house for a year only to reach a price that was within easy negotiating reach of the buyer then. Of course, the buyer has moved on, and the sellers now have to deal with the next potential buyer, who will use the new price as a starting, not ending place. There’s a lesson here, somewhere.

Off to (a very few) open houses

Looking over the open house list I see little worth spending gasoline on. There’s 3 acres of land with a tear-down house on Lake Avenue, asking $5.6. I’m sure it’s nice land, but I’m also sure there is comparable land for $2 million less, so we’ll let this one sit for awhile. There’s a house way, way north that sold for $2.5 million in 2005, failed to sell at $2.795 two years later so has now been bumped up to $3.250. That might work, but not for my clients.

Then there’s 98 Glenwood Drive, in Belle Haven, which I do want to see. It’s right across from the club’s beach, which is either a plus or a minus or perhaps a little of both, but I’d like to view it at it’s new price of $12.5 million, rather than the ridiculous price of $16.8 million its first broker pegged it at in 2007. I’ve said this before, but homeowners should resist the impulse to label as “insulting” low bids, even if one of the most successful agent in town has set your price. If a mere schnook like me can walk into your house and figure out that it’s at least 25% over-priced, perhaps a buyer who has been seeing the competition has a better idea of your home’s value than your agent does. Perhaps.

UPDATE: contempt before investigation rarely pays off. The Lake Avenue land (471?) is really gorgeous. Three acres, on a lot deep enough to build back away from the road and make the traiffic of Lake pretty much a non-issue. Is $5.6 the right price? These days, probably not and I would certainly advise some hard bargaining but for someone looking for a close-to-town location (this land is just south of the Round Hill Road intersection), it’s a pretty special parcel. There is a house n it, by the way, and you don’t have to tear it down, but whatever this goes for, it’s going for its land value – the house is free, do with it what you want.

22% off from 2007 price

31 North Porchuck sold new for $7.850 million in July, 2007. Beautifully constructed on four acres of land, with pond, the new owners added a pool and other improvements and must have had, conservatively, $8 million into the place. It sold Friday for $6.250. Maybe if they’d staged an art show they’d have done better.

Every then and now

1 Stonehedge

Sold 7/95: $700,000

Sold 4/09: $900,000

Chris Fountain tax assessment rule of thumb rule: 70% : $886,000

Down down down

Buyers are swarming – my pal Frank and I have a ton of them, all looking for – surprise! – bargains. In the meantime, sellers are maybe getting a tad more realistic, slowly. As they do, we’ll start seeing sales.

11 Juniper

This house, on the Stamford border but still in Greenwich, asked $5.3 million back in 2002 and sold for $4.3 that November (over-pricing is not a new phenomenon in Greenwich). Back on the market at below 2002 prices, asking $4.2.

And 31 Sound Beach Avenue sold in a bidding war back in 2006 for $1,000,100 (ask was $1.095) . Today it’s up for sale at $1.075. Acceptance of a loss is the first step toward recovery.

The rockets go up, who cares where they come down?

Old song. Anyway, I see that 204 Lyons Farm West sold today for $855,000, a fair bit lower than its asking price of  $1.175. I remember when Lyons Farm units began breaking the million dollar barrier and being a tad dubious. Seems that we’re seeing them come down closer to earth.

On the other hand, 32 Twin Lakes Drive (really Gilliam Lane) in Riverside is back on the market, still asking $13.5 million. I’m not impressed. It has an acre and a half of yard, which is good, but the water access was sold off years ago so you’re left with just views and, half the day, those views are of mudflats framed by neighboring houses. The house itself is old, old old and, although the listing says it has been “complete renovated” [sic] it looks as tired and beat up when the 12 Fritsche kids were tearing things apart down there in the 1960s. As land, I suppose it would fetch $4.5 million, maybe. If the remaining $9 million is for the house, someone admires old, leaky leaded windows more than I.

Life in the slow lane

10 Kent Place in Cos Cob was listed a year ago for $699. You wouldn’t think there’s a huge room for error at that low price but it finally sold today for $576,000. If you wonder what harm a bit of padding on your price can do in this market, ask yourself whether you want to sell now or sometime in the distant future.

One builder who didn’t conduct that self-examination is the guy who bought 136 Cat Rock for $1.4 million four or five years ago, spent a fortune building a new, three bedroom septic system and a smaller fortune redoing the house. He ended up with a so-so, 3 bedroom house on one acre in a two acre zone without room for a garage and, compounding his original stupidity, priced it at $3.625 million back in September 2006. That lunacy was rewarded with a slow descent, as his resources disappeared and the asking price dwindled until finally he lost the place to Webster Bank. They had to drop the price even lower, to $1.699 and today it went to contract. No word on its sales price yet but I wouldn’t be surprised if someone paid the cost of the land as it was in 2005 and accepted the house and that septic system work for free.

Prices and reality

There are three similar houses for sale in Greenwich, all on the same street (just to keep my cellphone and emailbox less crowded today I won’t identify the street – these could be anywhere in town). One started at $3.750 million last spring and despite being a nifty house with beautiful grounds, is still unsold today after dropping a full million. Another started at the same price ($3.750) last September and has dropped to $3.5 and also remains unsold. Earlier this week the third house joined them on the market, priced at $4 million. I understand that every home owner considers their house to be exceptional but trust me on this – the age, architecture and state of renovations all appear to be roughly the same, and all are of very high quality. I wonder, then, at the decision to price the third house where it is, given the failure of the first two to sell at lower prices. But, as always, we’ll see.

And I note that another price reduction has been recorded today, again at an address I won’t give because the builder owner screamed at one of my colleagues and threatened to take their business elsewhere (funny thing, it’s not a Raveis listing) when I suggested, a long time ago, that it would probably encounter difficulty selling at its asked-for price. It dropped 25% today, which is too little, too late, but perhaps that builder will call back my colleague and apologize. You think?

A bellwether

1038 Lake Ave

This large house way up on Lake Avenue on 4 acres sold for $4.4 million in 2003. So far as the listing shows nothing was done to it between purchase and January, 2005 but the buyers put it back up for sale for $9.7 million. Their estimate of how much the market had gone up was flawed and the listing expired. Today the house is back at a new price of $7.495. I’ll be curious to see, if it sells, how close it comes to the 2003 price.

The owners of 46 Quail Road, on the other hand, have already decided to bite the bullet. They paid $4.875 million for their house in March 2005 and as of today, will part company with it for just $4.3 million.