Not All Bleak News
Back in May, Francine Colby listed 50 Dingletown, a beautiful old house on six acres, for $9,850,000. It sat through the spring and summer markets but in October a bidding war broke out and it sold last week for $10,250,000. Odd how that happens but this phenomenon of no one wanting a house and then two or more buyers appearing simultaneously occurs in all price ranges. Joan Crossman’s listing at 11 Center Road in Old Greenwich sat for three month this fall before three different buyers appeared at once. Nice for sellers when that happens, of course, but it’s a lesson for buyers: if you’re seriously attracted to a house, make the bid – you never know how much time you have, regardless of how long a house has languished.

Wall Street Follies?
Far be it from me to criticize Wall Street, the source of so many of my buyers, but the recent announcement that Reology (formerly Cendant’s real estate division) is going private in a leveraged buyout has me scratching my head. Reology holds under its umbrella several of the country’s largest real estate firms, including Century 21, Coldwell Banker and Soetheby’s. It was created just last August (?) when Cendant spun off its real estate business and now its President has suddenly discovered that the publicly traded marketplace doesn’t like cyclical businesses. Shouldn’t he have noticed this during the years when Cendant owned them? Realogy shareholders will receive a nice premium but both Moody’s and Standard & Poors are knocking Realogy’s credit rating to junk status while Realogy’s President is walking away with $135,000,000. To this non-expert, the deal seems to more about bankers’ fees and cashing in on stock options than about business, but I guess we’ll see. My guess: look for them to go public again in a couple of years, thereby generating another round of fees.

Cos Cob
There’s a nice house in Cos Cob that sold two years ago for $2,312,500. Its owners returned it to the market this spring at $2,675,000 and now, two expirations (and three brokers) later, it’s still unsold, asking $2,449,000. Even if it sells for anything close to that the owners will not stand to gain much after taxes and commissions are deducted. I don’t know if there’s a lesson here, other than it can be tough to buy at the height of the market and have to sell when it’s down (they did teach you in school that real estate is very much not a liquid investment, didn’t they), but the house’s travails caught my eye. I know that the Cos Cob market has been particularly slow this year – the same house in Riverside or Old Greenwich would almost certainly have appreciated – but still a surprising predicament for Greenwich. Oh – there is at least one more lesson here: if your house isn’t selling, you’re better off lowering its price rather than firing your broker. All the marketing in the world won’t move your house if it’s over-priced.

Starting Over
If you’re planning to sell this year, now’s the time (well okay, enjoy New Year’s Eve) to start getting it ready. Historically, the third week of January sees the start of the spring market and there will be a new crowd of buyers (we all hope) getting out and about, seeing what’s available. Your house will certainly show better when its gardens are in bloom but by then you’ll have missed a lot of buyers. Betty Moger, who ran Cleveland, Duble & Arnold forever used to preach, “if you wait for the dogwoods to bloom, you’re too late.” What was true for her long career still holds, in my opinion.

What if your house sat unsold for the fall market (or since Spring, like that Cos Cobber)? Now’s an excellent time to sit down with your agent to discuss what you can change. Price is always a good place to start, but is the master bath a wreck? Kitchen obsolete? I’m not suggesting you sink a ton of money into a sinking ship, but $10,000, say, in improvements might be more effective than dropping the price that amount.

See You Next Year
So that wraps up 2006. Not a terrible year for real estate – some of us had our best year ever – but it certainly saw a significant drop from 2004, the all-time high. Don’t panic and remember, as Realogy’s President just discovered, real estate’s a cyclical business. Happy New Year.