A view from the trenches

I just spent much of the morning listening to Nora King, owner and president of the appraisal company Nora King & Associates. She looks great but her news was ugly. 50% of her firm's Greenwich case load is now devoted to pre-foreclosure or work-out notes, compared to zero last year, and 34 homes in town are now in foreclosure with, as her caseload suggests, more on the way.

This isn't necessarily bad news for buyers, of course, because it means some sellers may finally get serious, and real, about their pricing, and your "low ball" offer might now be heard by a receptive ear. Or not, depending on the seller's state of delusion.

Other tidbits: condo sales are not only way down, underwriters hate lending on them (which may be the cause of the effect). As King explained it, an underwriter in, say, Ohio, sees that 1/2 of its troubled loans, nationally, are arising from condos, and they don't want to hear about what the condo market's doing in Greenwich; they just don't want anything to do with any of them. There are still loans available but King suggests, as I did here last week, that if you're putting your unit on the market you take the last comparable unit sale for your compplex and price yours 10%less than that. This is not the time to stretch for a new price - your buyer won't get a loan.

Nationally, 1/3 of all single family homes sold within the past few years are underwater, or worth less than their buyers paid for them. Greenwich hasn't reached that stage, but it sure makes lenders nervous.

Appraisals are taking at least 7-10 days now - they one day turn-around time is gone, so make sure your mortgage contingency (yes, they're back) is for at least 20 and preferably 30 days; you'll need the extra time. Sellers, be aware of this new reality and don't be inflexible.

Buyers, go out and get pre-qualified now if you're even thinking of buying this Fall.

Sellers, know that the comparable sales your buyer's lender wil look at are no older than 90 days (30 days in depressed and falling markets) instead of the 6 month window used before. So if your neighbor down the street sold his house for $X back in March, don't count on your own house appraising out for the same amount.

Oh - "fixtures": pools, new kitchens, great new master baths etc. are not considered to add value to your house these days. Your house will probably sell faster but, as far as the lenders are concerned, you might just as well have saved your money (that's a bit of an overstatement, but generally true).

There's more, but how depressed do you want to be? The upside is that buyers should start seeing some decent opportunities if they haven't already. Sellers should start adjusting mentally to a down market, and hope that things get better next year. According to King and some other pundits there are some faint signs of a recovering market but I don't anticipate much good news in the immediate future. Especially if, as rumored yesterday, Fannie Mae has to be bailed out by us taxpayers. Wall Street's gonna hate that.