Whither, or wither the market?

Heck if I know. Interest rates are higher than they were although, at 6.5%, I find it hard to be too sympathetic toward buyers - when I graduated and bought my first house, my mortgage was 14% and that "special" rate was granted only because my new law firm represented the bank. But credit remains elusive, and the only two players in the mortgage market, Freddie Mac and Fannie Mae, don't lend in amounts that will do Greenwich buyers much good. I don't see that changing in the near future. In fact,Freddie Mac just announced dismal financials for the last quarter and sees no turn around in sight. Pakistan is impeaching Musharraf, which won't do much for stability in that region and Israel appears to be readying a nuclear strike against Iran. Add the possibility of a veto-proof Democratic majority in the Senate and House, plus Obama, and things don't look all that swell.

But despite all this, it might still be a reasonable time to buy. No one, particularly me, can predict the future, and it's not entirely irrational, I hope, for you to expect that you'll hold onto your job, that income will keep flowing in and that you'll continue to have a family who you want to house. So should you wait for what you think will be the bottom of the market? Here's a little financial exercise that might give you perspective.

Suppose that last year you found a house that you liked for $500,000 (feel free to add zeros to these sums until you've reached Greenwich pricing). Interest rates were 5.5%, and assuming an 80/20 loan to value ratio, your monthly payment, principal and interest, would have been $3,406.73. This year, that house has dropped 10% to $450,000 but interest rates have climbed to 6.5%, yielding a P&I payment of $3,237.57. You've stayed in a house that you didn't want to own (or rent) and saved $169 a month. If that sum is enough to make or break you, you probably have no business buying this house to begin with.

So buy now or not? Prices may continue to drop, and my personal suspicion is that they will, but I don't anticipate a free-fall. And remember, while the price of the house you want to buy may be dropping, so is the price of the current house you want to sell. Interest rates and property values may go up or down - you won't get a sure-proof guarantee from me or any real economist but it's often the case that the two move in opposite directions. Over the long run, Greenwich real estate has always held its value and I don't see that changing. I might not rush out to buy a condominium in Las Vegas or Naples, Florida right now, but if I were looking to raise a family here and planned on staying put for 5-15 years, I'd buy here again.

2nd Quarter sales statistics

Nothing encouraging here. 154 single family homes sold in Greenwich in the second quarter of 2008 (134 of which were multi-list, the balance for sale by owner, I believe). This compares to 230 in the same quarter last year, 225 in 2006, 266 in 2005 and 296 in 2004. Average and median prices were $2.874 and $2.012 this year compared to $2.780 and $2.067 in 2007. If you really want to get depressed, my former employer, Greenwich Post, says just 84 single family homes sold in the second quarter. They credit Bob Fossum with those statistics and he's always right, so it's a puzzle but not great news for sellers in either case.

Speaking of The Post, I just learned that they downsized their real estate reporter, Jane Dove. I got fired for ticking off a couple of advertisers but Jane's demise was caused by budget cuts at the paper. Both firings raise the question, however, of how little content can you leave in a newspaper before your readers leave you?

Update: My friends at Shore & Country Real Estate have more data comparing the first half of 2008 to 2007. Same sort of stuff, but note their caution at the bottom of the page that many of the transactions reported as sold in 2008 were contracted for in a better market, 2007.

OwlGore buys a houseboat

One hundred feet long,powered by solar and bio-fuel (although, inconveniently, it's presently running on good old diesel and electricity and they don't sell bio-fuel on the lake where this behemoth is docked), and dig that jet ski! Pictures at the link above, but you don't really need further proof that this fat fraud has one agenda for himself and his friends and another for us, do you?


Maybe he'll use the thing to give rides to polar bears.

Waterfront redux

A commentator below asks why certain Old Greenwich waterfront properties are lingering, if these properties are so hot. I answered him in the comment section but here it is again:

It's true that there are five waterfront houses currently for sale in Old Greenwich, but I blame price for their availability more than anything else. Old Greenwich saw some very quick sales of better waterfront - better priced or better location or better condition - in the past two years. 19 Meadow Place, for instance, basically land, came on in April this year for $7.950 and sold immediately for $8.500. 35 Cove Road asked $8.2 and got $8.2 in 22 days. 200 Shore Road, new construction with an incredible view, asked $8,000,000 and went to contract almost immediately for what I'd guess was asking or close-to-asking price.

Etc. The houses that are lingering are doing so, I think, because the sellers paid too much attention to the prices other waterfront fetched and not enough attention to the particular drawbacks of their own land. Nothing that can't be remedied by a price cut. 164 Sore Road, for instance, came on at $8.4 but the sellers quickly realized they were too high, cut the price $500,000 and had it sold for $7.4 within 28 days of first listing it. That's a smart buyer - why prolong the agony? Besides, they pocketed a very nice sum.

And if you're looking for impressive sales of waterfront and are willing to look a bit past Old Greenwich into Riverside, Lowther Point sold this spring for $22,000,000. That one did take a few years to find its buyer, but the original price was er, "aggressive" and put many buyers off.

So I still like the stuff.

Zillow - Misperception of home value

Zillow reports (see link above) that the majority of Americans think that their house increased in value last year while the reality is, few did. This is very much like the reaction we agents get when, giving a price opinion, we show the seller a list of comparable house sale prices and are met with, "but my house is special". So is your wife, and so are your kids, but they're all a drag on the market. Get real (and yes, I'm just kidding about your wife and kids - I'm sure they're just adorable).

Blowing against the wind

If you Google "windmill opposition" as I did in the link above, you'll find 230,00 entries. Wherever these projects are proposed, opposition immediately swarms up to defeat them, whether in Bovina, New York, anywhere else in the Catskills, California, Nevada, or anywhere within sight of those eco-champions, the Kennedys. The same phenomenon can be observed for a power line transmission wires (893,000 hits)coal powered fuel plants (1,990,000)or nuclear energy (12,100,000) I'd guess that this fierce nimbyism will severely curtail the amount of energy generated from wind and certainly delay massive projects for at least a decade. So how are we going to run our economy? The best, or most revealing answer, comes from a European environmentalist - we don't - our western economy must be destroyed.

So the next time Mr. Obama says that our economy must be transformed, you might ask, "transformed how?". Nancy Pelosi isn't concerned. As she recently stated, "this whole wind power thing is a hoax - it will take ten years for wind power to make any appreciable contribution to our energy needs and we need a solution now. That's what the Democrats have come up with: we're going to release 10% of our Strategic Oil reserve right now, right away. That will give the country a four-day supply of fuel, which will allow AlGore, Barack and me to gas up our jetsand get the hell out of here to Bali. The rest of you chumps can just freeze in the dark. See ya!"

Thanks, Nancy

Waterfront is still King

B.K. Bates recently listed a Belle Haven waterfront property for sale at $15,750,000. The property was listed on July 23rd but the first broker open house wasn't scheduled until early September, no doubt because BK wanted to give her fellow agents time to return from vacation. She herself was clearly not taking it easy because yesterday she reported that she had a contract on the place - both sides of the deal which is nice work if you can get it.

I didn't see this place before it went but, at 1.6 acres and its construction date of 1933 I hope I'll be forgiven if I suggest that this represents a very healthy price for waterfront building lots. It might be renovated (which was last done in 1980) but, given the relatively large size of the lot and the age of the building, it might easily be destined for the dustbin of history. Regardless, it's nice to know that not everyone has lost their pocket change.

What is it about Byram?

Greenwich Time reports today (link above) that the Byram Library expansion project is behind schedule and, worse, has soared from a $2.7 million budget to $4.8, a figure which is presumably still climbing. How in Hell do you miss a cost estimate by this much? I can only guess that the same folks who have dealt so well with our Hamilton Avenue and Glenville schools turned their attention to storing books, but maybe they should retire. "Only" $1.3 million of Greenwich taxpayer money is sunk in this mire, but it's still appalling. Sheesh!

Lawyers and Real Estate

One area of disagreement my instructor and I had yesterday was the proper role of lawyers in real estate transactions. She, like most agents I know, hates lawyers and thinks they should be eliminated from the entire process, as they are in California and many other states. I think that, given my instructor's own estimation that 97% of all agents don't know what they're doing, why would anyone entrust a $3,000,000 transaction, "the most important investment decision you'll make in your life" if you believe the flacks from the National Association of Realtors (I don't, but never mind, to anyone except a trained, experienced real estate lawyer? I heard more misinformation about real estate law yesterday than I usually encounter all year. "Time is of the essence is just a standard term," for instance. Wrong! And, as I pointed out to no effect, if you don't know the legal implications of a term, don't write it into a contract. Buyers and sellers in Greenwich are spared the doubtful assistance of well meaning but ignorant wanna be lawyer/real estate agents because we don't use binders and all transactions are done via contracts prepared by attorneys. Yes, there are some lawyers in town who know as little about real estate law as the agent who sold the house, and there are some out sized egos around ready to screw up deals by imposing ridiculous terms and conditions solely because they can, but a good attorney, together with his or her paralegal, will protect your interests and ensure a seamless, smooth transaction far better than most agents. No, I longer practice real estate law but I remember when I did and I certainly can appreciate watching a good one at work today. Money well spent, I think.

Sales Meetings for Real Estate Agents

I usually avoid these things like the plague because, in my experience, the instructor usually tries to impart neat tricks that are supposed to bamboozle the customer and get them to buy what they don't want and don't need. The whole concept reminds me of why I hang onto my cars for ten years - I hate, absolutely hate, enduring the agony of dealing with an uneducated car salesman practicing Cheap Tricks 101, like "what will your neighbors think when they see this new car in your driveway?" I don't care what my neighbors think and I don't need to visualize owning the car, no matter what you were taught. Give me a good price and let me out of here.

But yesterday's meeting was refreshingly different. The instructor,a woman with 35 years experience, emphasized treating people decently and well, developing a rational schedule to select, view and eliminate houses for showing and bringing value to the transaction by knowing real estate - inventory, neighborhoods, the cost of improvements - cold. I'm not sure I learned all that much because I already try to employ those skills to the best of my ability but I left feeling much better about the firm I'm associated with and the training it's imparting to its agents. The best agents, by the way, are often exactly this type, regardless of where they park their shingle. The instructor claimed that 97% of all real estate is sold by 3% of all agents and suggested that that meant that 97% of all agents don't know what the hell they're doing. I think she was a bit harsh there, but I won't disagree that there are a lot of licensed agents who don't put much effort into keeping up with this business. Perhaps they're too busy writing blogs about non-real estate related matters!

no blogging til this evening

stuck in a sales meeting. If I learn any new tricks about deceiving customers I'll post them this evening.

The New York Times thaws on global warming

Yesterday Thomas Friedman conceded (see link above) that maybe, just maybe, global warming is a phenomenon caused by non-human events. He wasn't convinced, of course,that we should stop worrying because, hey, "you never know", but that admission represents a large hole in the "mankind's doomed the planet" hype. His concluding words:

That project is already causing a stir in the climate community. In an article just published in the journal Science Express, Dahl-Jensen’s team wrote about how it had discovered from the ice cores that the atmospheric circulation in the Northern Hemisphere over Greenland “changed abruptly” just as the last ice age ended around 11,700 years ago.

It seems to have been driven by a sudden change in monsoons in the tropics. The change was so abrupt that it warmed the Northern Hemisphere over Greenland by 10 degrees Celsius in just 50 years — a dramatic increase.

“It shows that our climate system has the ability to make very abrupt changes all by itself,” said Dahl-Jensen.

Some climate-change deniers would say that this proves that mankind is not important in changing the climate. Climate change experts, like Dahl-Jensen, say it’s not so simple: The climate is always changing, sometimes very abruptly, so the last thing that mankind should be doing is adding its own forcing actions — like pumping unprecedented amounts of greenhouse gases into the atmosphere. Because you never know — you never know — what will tip the balance and send us hurdling into another abrupt change ... and into another era.

Last week, the Times' official worrywart, Paul Krugman acknowledged that we can't be sure how bad the effects [if any -ed] of global warming might be, but do we want to take the chance?.

This is all heartening news to some of us. Al Gore claimed that "the dispute is over". People like me were called Holocaust deniers and worse. Now, it seems, that judgement may have been a bit premature. Better yet, I'm now justified in postponing yet again my first viewing of "An Inconvenient Truth".

More price reductions

Probably not enough to move them, but there were nine price reductions today and the real estate board's still open for business. 18 Thunder Mountain Road doesn't strictly qualify as a price reduction but it was offered for sale with a to-be-constructed house for $5,800,000 way back in 2002. It never sold, the house was never built and today the land itself reappeared, asking $2,500,000 for a 2+ acre lot. I like that 4 acres I mention below for $1.6 more than this one.

249 Bedford Road does has a house on it and it's been for sale since it was built in 2005. Three years later it still sits empty and effective today, is asking $5,200,000, a drop from its original price of $5,885,000. I think they should have started at its present price three years ago.

There's another house around the corner from Bedford that will never, ever sell for anything close to either its original price or its current reduced price. Fear of being hauled before a grievance board prevents me from identifying it, but it certainly provides a neat example of willful ignorance of market conditions.

Alert! Not about real estate!

Don't click on the link above if you're only interested in real estate news. But if an eloquent essay on the danger Obama presents to this country and its economy might strike your fancy, I recommend this piece by Ms. Kyle-Anne Shiver.

New Gasoline ripoff

I just filled up at my local station which advertises, in huge numbers, "$4.39" for regular grade. When I looked at my receipt, I realized I'd been charged $4.49 per gallon. I'd fallen victim to what our state democrats (see link above) touted as a taxpayer bonanza, a bill, effective July 1st, allowing gas stations to whack their customers an extra 10 cents for putting their purchase on a credit card (and who carries enough cash to fund a fill-up at today's prices?. Now, if you browse through the link above, you'll see that the Dems also pat themselves on the back for "saving home owners from additional property taxes" by extending the conveyance tax on real estate sales, so it shouldn't surprise you that they see a ten cent sop to their gasoline retail constituents as a boon to us suckers who buy the stuff on plastic. But I dislike the deception employed by this particular retailer. who lured me in with one price and stuck me with a higher one. I once praised this particular Old Greenwich station as being a reliable source of honest repair work. I've been repaid by twice being sold unnecessary and over-priced repairs and now this. The heck with them. The Sunoco station in Stamford (on the Post Road near Shaeffer Rug) sells gas for $4.29 regardless of how you pay for it. From now on,I'll just mosey on up the street.

Update: I just walked over to take a picture of their sign for this blog and I see that the cash/credit differential is posted - my fault for not noticing. I'm still not going to pay them a dime extra per gallon, especially in light of their repair practices.

The Breath of Gods?

I love wind energy. We all love wind energy, I'm sure. But the New York Times really loves wind energy and says so right here (link above) in what is supposed to be a news report. Does the following text sound like objective reporting, the kind that was once taught, I presume, in journalism school? To me, it reads like the sophomoric work of a dewy eyed high school student.

Though painted gray, the turbines stand out against the evening backdrop of battleship-colored thunderclouds and bear an almost celestial whiteness when day’s light is right. Airplane pilots can spot them from far away, and rarely does a bird make their unfortunate acquaintance.

The sound of 8.5-ton blades, three to a turbine, turning and turning, only enhances their almost supernatural presence. Standing at the base of a turbine’s stalk, you hear a whistling whoosh — whuh ... whuh ... whuh — as steady summer winds come like the breath of gods to toy with pinwheel amusements.

Or this:

Nebraska Public, for example, will buy the energy created by two wind farms being built by private developers 140 miles east of here, and will replace those two turbines up in Springview by next year. It hopes that within a decade or so, 10 percent of its energy will be produced by clean, free, plentiful wind.

It's all very nice, but I wish the reporter had picked up on a few things that might make this marvelous project a bit less viable in the east. First, Nebraska bought 11,000 acres surrounding the turbines to prevent future development from blocking the wind - try doing that in Connecticut or anywhere that's in view of teddy Kennedy's compound. Second, and unlike conditions here on the east coast, there were transmission lines already in place, capable of carrying the generated electricity to where it's needed. Out here, we refuse to let anything be built, windmills or transmission lines (or pipelines, power plants or LNG plants). Perhaps, when we suffer our next brown-out, the New York Times will send us a reporter to sing us back to sleep.

Exxon's Profit Margin

10%, as we've noted before, and discussed in today's Wall Street Journal (link above). And here's someone else who isn't impressed with our mainstream media's coverage of this issue.

Bargains?

I'm beginning to see some and I'm hearing about a few huge price reductions that aren't yet publicized, so there may be some sense returning to the market. Until now, the buyers were skittish and many sellers were content to sit things out - not a situation conducive to moving real estate. I'll tell you where I'm seeing reasonable prices but only after I finish trying to sell them to my own clients; I do have to make a living, you know. Check back in at the end of the week. By that time, "they snooze, they lose".

In the meantime, you may want to read this column in The New York Times on the glut in single bedroom condos-turns out, first time buyers can't get financing, which is what's hurting sales of our lower-priced inventory here in Greenwich. Take note of the frustrated seller quoted as saying "I wish we'd negotiated more with the first buyer". He didn't, lost the deal and a year later is still sitting on a property he doesn't want to own. There's a lesson in this.

Ban it!

Some state representative is pushing for a one year moratorium on artificial turf playing fields until the State of Connecticut conducts a study on their safety. Never mind that there have been dozens of studies performed by other states and several branches of the federal government, we won't be safe unless we spend this state's taxpayers' money to see for ourselves. The hysteria on this issue has reached Greenwich, too, via Selectwoman Lin Lavery but as far as I know, our kids are still playing on the stuff, no thanks to her.

Nalgene water bottles

It's all reminiscent of the recent fervor that resulted in the world-wide banning of Nalgene bottles - the best invention for hiking ever made (with the possible exception of lightweight LED headlamps). The old bottles stunk of plastic and often leaked. Nalgene bottles were unbreakable and imparted no taste or odor to the water they contained. But someone, somewhere (Canada, actually) decided, in the face of every other study that said otherwise, that the chemical these bottles were made from might harm infants and presto! We're back to cupping our hands in streams and dribbling on our chests. But chemicals are bad, man - they aren't organic.

It's their Birthday!

The U.S. Department of Energy was established on this day in 1977 by The Great Rabbit Hunter, Jimmy Carter. It soaks up $25,000,000,000 (that's billion) a year now, and it's working every bit as well as our Department of Education.

Antares lays an egg

Despite Antares's best efforts, including a phony PR visit by A Rod last summer to this 35,000 square foot instant white elephant (picture in link, above) the partnership's mansion project is in complete disarray. How'd you like to be the chump who paid $10,000,000 for your house one month and watch the identical house next door sell for six just five weeks later?

Connecticut windfall

The Connecticut section of the New York Times (link above) discloses that, surprise! our government's been taxing the hell out of us under the guise of a gasoline tax (50¢ a gallon and climbing, as it's based on the price, rather than fixed by gallonage) that was supposed to be devoted to rebuilding and maintaining our roads. Ain't happening. Since the tax was passed in 2003, over a billion dollars have gone to non-transportation items and this year another two hundred million is destined for the same rat hole. You may remember that Lowell Weiker and his cronies pushed an income tax on the state with the promise that they'd use it wisely and balance our budget. Since then our population has gone down, the number of state workers has increased 200% and we haven't seen a balanced budget. We have, however, brought back the estate tax, imposed a real estate conveyance tax and then doubled it and, in general, seen our Legislature spend our money with abandon.

By the way. Just like Obama's latest promise to impose a windfall profits tax on the oil industry (Exxon's record profits last quarter amounted to a 10% profit margin - media companies, with the exception of the dying New York Times, make close to twice that) and pass out his largess to "American families, 25¢ of our gas tax is called a "wholesaler tax". This was supposed to tax the windfall profits of gasoline wholesalers and was passed on to the consumer. Guess who will see their oil prices increase if taxes are raised on oil companies? The American family. But we're stupid and it sounds good.

Dinosaurs at the Gate!

The postman just delivered four phone books to my, and everyone else's house in Greenwich. Mine went into the mixed paper bin. When was the last time you used a paper phonebook?

Greenspan - "Housing slump to continue"

Discouraging news, but Mr. Greenspan is not necessarily always right. Two years ago, he predicted the worst is over. So, as always, you pays your money, ya take your chances. I do wish credit would return, though.

Asbestos? Yawn.

Dundee School, site of the new/temporary wiffleball field, turns out to be enjoying a bit of asbestos removal in the building. Parents of the wiffleballers are upset, according to the Greenwich Time article linked above. For once, the town is right - this kerfuffle is all much ado about nothing, spurred by ignorance, which breeds fear. My personal opinion is that the Congressional mandate to remove asbestos from all schools in the nation is a colossal waste of money that diverted billions of dollars to contractors when it could have been spent on books, new buildings or even increasing teachers' salaries (if you're going to waste money anyway ....)

But even if you think asbestos is right up there on the danger screen with Nalgene water bottles, an asbestos removal project is a pretty safe operation for those outside. The building is reverse-pressurized, keeping all dust inside a plastic sheet-sealed area, the workers all wear space suits, air is monitored and everyone has a grand time while being very well paid because it looks so dangerous. In fact, years ago I defended one of several young kids who were caught up in a federal sweep of unscrupulous asbestos removal contractors. these kids, acting under orders from their boss, skipped the pressurizing bit, shucked the spacesuits and basically just ripped everything up, ran a vacuum cleaner over the site and went home. After the busts, tests were done and, surprise! No harm, no foul. The kids got probation; their boss was sent off to cool his heels for a spell, if I recall.

Eco Hysteria

There's a movement afoot to ban bottled water, which seems dubious to me. A commentator below ("The Bag Lady is Singing) suggests that ecological awareness is a good thing, no matter how misguided a few zealots are, or sound. I might agree, if I didn't fear that the zealots were on their way to taking over our schools, our children and our lives. The NYT article linked above doesn't scare me - some of the comments appended to it do. Here, for instance, is one from exactly the type of person who sets my teeth on edge and tempts me to reach for my revolver:

"10. July 29th, 2008

Bottled water is THE. BIGGEST. MYTH. IN. HISTORY.
(next to WMDs, of course)
I’ve done some research on this topic. I believe anyone who frequently drinks only bottled water is a disgrace. THey are selfish folks who care nothing about their surroundings and the environment. THey don’t care that tons of plastic, and energy and oil are used to make bottled water (which in some cases, like Dasani, is filtered tap water already).
ANything that states “purified water” means it is TAP WATER that goes thru a Brita-like filter. So why pay for it?
Also, water like FIji, actually comes from Fiji - 7,000 miles away. That uses fuel for the airplane, plastic for the bottle, and tons of energy to make the darn thing. Workers are paid a few cents an hour to make this product, which you carelessly throw away.
ANyone who doesn’t care about the environment, or buys bottled water by the multi-pack, should be ashamed to call themselves American, or even a concerned human. People like this are the ones who have polluted the Earth.
Bottled water is for those occasions when you forget to take your own, or you have a sudden urge for water. That’s it. It’s an emergency product. Drinking bottled water is as stupid as breathing air from an oxygen tank 24 hours a day.
— Posted by irritated"

When not being irritated by water drinkers, this lady busies herself by slipping abusive messages under the windshield wipers of SUVs. You can't tell her to get a life because she thinks she already has one. Ugh.

Fill a tire, save the world

The Messiah has suggested that, if only we were to properly inflate our car tires, we'd save as much gasoline as that which could be produced by additional drilling. Even a moron like myself could detect that something was wrong with that figure so I did a little digging on the internet to see how much oil we're talking about. The result: a lot, from the drilling (28 billion barrels from ANWAR and off shore, minimum) and not a heck of a lot from driving on properly inflated tires (maybe 90,000,000 barrels annually). Figure 311 years to match the foregone production. For a more interesting take, check Professor Hinderacker's calculations in the link above. Be throws in oil shale, which I won't because oil shale development is going to require tons of water, a commodity scarcer even than oil in the Rockies, and figures we'll take 3,110 years to match what Obama wont drill for.

Even if you share my low opinion of the intelligence of former Harvard Law Review editors, is it possible that Obama is this dumb? I think not; I think he assumes that we are, we gun-clinging, religious fanatics who don't have the sense to live in an urban paradise like Chicago. He's trying to sell a bill of goods that seems painless: we switch a few light bulbs, check out our tire pressure every month, stop drinking bottled water and presto! The polar bears are safe. The question is, will Obama and his friends content themselves with passing out free light bulbs and tire gauges or are they preparing to shut down the western world's economy? If it were Al Gore about to be crowned emperor, I'd know exactly what we were in for. Obama remains a mystery, to me.

Anything can happen but don't count on it

156 Lockwood Road (on the corner of Sound Beach) in Riverside was originally listed in April 2007 for $5,995,000. Although I didn't give out its address in my column I did mention that, given its location on the two busiest streets in Riverside and Old Greenwich, I didn't think the seller would get that price. In fact, I thought he was friggin' loony, and neighbors who guessed which hose I was writing about agreed. It finally sold this past July for $4,100,000. Again, considering where it was built, I think the seller got lucky. Lesson is, if you're an out-of-town builder doing your first project here, don't let the magic name "Greenwich" blind you to the oldest of real estate maxims - location, location, location.

Flipping houses for fun and profit

It doesn't happen often these days, but 38 Highview Avenue in Old Greenwich was purchased by an investor couple I know (but don't, alas, represent) for $1.395M on August 16, 2004, and went to contract just 7 days after being listed this July with an asking price of $1.795M. I assume, based on it selling so quickly, that the winning bid was close to or at the full asking price. If so, that's not a bad result in this market, even knocking off 10% (a grossly pessimistic percentage) for commissions, taxes and all that. It probably doesn't hurt that the sellers are local, and one of them is both a town native and an excellent financial advisor. They picked the right property and did just fine. Nice work, if you can get it.

New vs. experienced agents

A couple of readers have asked how inquires about real estate are handled by brokerage firms here in town. Speaking only for the two or three firms whose policies I am (sort of) familiar with, here's how it works: a call comes in - Hallelujah! The Internet has killed 90% of such calls in the past five years - and is routed to whoever has "desk duty" that slot (usually, an agent holds down desk duty for 1/2 the day). In the pre-internet days, a caller stood a pretty good chance of finding an experienced agent on the line because that's where the business was - we'd run ads in local papers and those ubiquitous real estate gimme books found in supermarkets and would-be buyers had to call to find out the price (often) and the address (almost always). People volunteered for desk duty because they could count on receiving at least a couple of calls a session and, with luck, could convert the caller into a customer. That's not true today so a lot of us find we have better things to do with our time. Not all of us - I know of at least one very experienced, successful agent who still grabs the duty desk and does well at it. I personally will do it only as a matter of being a team player.

The bane of an office manager and those of us who have the misfortune of being within earshot of a telephone inquiry regarding one of our own listings is the agent who has never seen the property in question and can do no more than recite what's on the listing sheet, information that the caller, thanks to the Internet, already has. A lazy, experienced agent is no better in this regard than a new agent who hasn't troubled to personally view the inventory. If you're lucky, however, you'll find a real person who has seen the property, remembers its details and can speak English well enough to communicate that knowledge. If you find that you're getting along with that person, by all means make an appointment to see the house you called in on and perhaps others with her, regardless of whether she or he's a star performer or a novice. Enthusiasm, coupled with knowledge, will go a long way.

Two points: 1. Desk duty is very much not a "personality contest". Whoever wants to sign up for the task gets it and an ambitious, eager agent can find all the slots she wants. 2. Don't be (too) afraid of identifying yourself and disclosing what you're looking for. One reason the Internet became so poplar, I suspect, is that buyers can search for property anonymously without fear of being hounded to all ends of the earth by a starving, desperate agent. In my experience, that usually doesn't happen - we ask, politely, if you'd like us to email you additional information on the house and whether you'd like information on other houses that seem to meet your criteria, and that's it. If you decline, we don't have caller ID and won't telephone you at 2:00 a.m. to tell you about the perfect house that just appeared nor will we appear at your daughter's christening. I did witness one agent chase a walk-in out to the parking lot and act like a Pekingese with loving on her mind, but that was once - most of the rest of us are more restrained.

So feel free to call. You'll often find a good person on the other end of the line who can give you some valuable information, free and without further obligation. If you like what hear and feel comfortable with the agent, try out a relationship for a day. If not, there are at least 999 other agents here in Greenwich twiddling our thumbs and awaiting your call.

Here's a depressing opinion piece

The Wall Street Journal asks, Is John McCain Stupid?. The author concludes that he is. I'm sorry to say I agree. It probably doesn't matter, now that Obama is already fitting himself out for the dollar bill but it does seem a shame that we've ended up with a choice between a moron and a megalomaniac. of course, I have many friends in town who would respond, 'we've done the dolt, let's try the preening ward heeler." Fair enough, but I think we're heading for (more) trouble.

Here's a good value

8 Mansion Place is in the King Merit development off of King Street in western Greenwich. Not one of our most expensive neighborhoods but that means you can still get over an acre of land (1.19, in this case) and a nice house for far less than the average run-down Riverside house will cost you. This house, added to and renovated in 2005, has a ton of bedrooms, a really nice yard and a knock-you-dead solarium/family room all for just $1,499,000, down from its original June asking price of $1,699,000. Disclosure: it's a Raveis listing but long-term readers know I've never let that sort of thing affect my calling a house a good (or a bad) buy and I'm not doing that now. In a better market, I think the original price would have moved this place. Its current price is better still and, if the alacrity with which the seller has adjusted her price is any indication, i think you might be able to nibble away at the price even more. Unprepossessing from the front - it looks like the plain old ranch that it once was, this is one worth seeing, if you can adjust to or want to live out west. No highway noise, either, which is not the case in some houses over here. A very nice house, and one I liked a lot.

Cheesey or sleazy?

The 12 hour parking slots at Town Hall give you 2 hours for a quarter - a nice price if you need to park for awhile. But take a look at these meters and see whether you can tell how much time is left on the meter. I usually can't, which means that, even if I find an unexpired meter, I still have to slip in a quarter to ensure I don't get a $15.00 ticket. I don't know whether the scratches and condensation that prevent a reading are deliberate or just the result of poor maintenance, but it's annoying either way.

Going Down?

A few months ago I would have gagged at this price but now it's an encouraging signal, I hope, of where the gasoline market is heading - 20¢ less than yesterday! (Taken in Cos Cob at 6:56 this morning)

Hamilton Avenue Mess

I've refrained from delving into the fiasco involving our two schools (Ham Ave and Glenville) in our west because (a) I don't know much about what's going on and (b) http://www.Greenwichroundup.blogspot.com is already doing a fine job of coverage. I do know that, when the town and the YMCA, faced with huge cost overruns on their projects being run by Worth, denied any knowledge that there was even a whiff of impropriety concerning the firm, that a simple Google search turned up plenty. Try the link in the title and see for yourself.

Why wait 'til November? Let the coronation begin!

I don't think it's news that Obama supports the wacky bill that would grant native Hawaiians (defined as anyone who is, once was or would like to be known as Hawaiian) rights to most of the state, free education and a Smart car - that's pretty much a standard democrat platform. No, what I find disturbing is that the press - remember them? The hard-bitten, skeptical crowd of truth seekers who exposed fraud and pomposity without fear or favor has suspended even the faintest pretense of objectivity. I'm sure they'll recover once the man is ensconced in the White House, but by then it will be too late. Here's the money quote from the article linked above:

When Obama walked on stage at the McCormick Center, many journalists in the
audience leapt to their feet and applauded enthusiastically after being told not
to do so. During a two-minute break halfway through the event, which was
broadcast live on CNN, journalists ran to the stage to snap photos of
Obama.

Where's the Sitemeter?
The little Sitemeter that's usually posted on the right is missing today, not because I'm ashamed of my modest readership (which in fact is building very nicely) but because the service that provides it is preparing to upgrade things. Their official explanation:

"For the next 30 - 45 days we will be testing our servers and databases in preparation for the launch of our new SiteMeter platform. If you are currently using our NoScript tag (plain HTML) the little SiteMeter icon that appears on the pages where you have pasted our tag may disappear. Please rest ... " [. - you get the picture - ed]

When it's available, the Sitemeter is fascinating, at least to me. I have one reader who logs on from Germany every day - don't know why, don't know who - and another from Peking. The Internet's a thing of wonder. The meter is public, so when it reappears, click on it if you're interested.

$200 Million in campaign contributions and counting

The washington Post (above) has examined Fannie Mae's giving history and the results don't bode well for us taxpayers no matter who wins this year's election.

Greenwich Time Links

Here's a link (click on title above) to one of the Greenwich Time articles on the egg tossing incident. We're still working on the others.

Here's a great comment on selecting an agent that makes a lot of sense (because I didn't write it!). I didn't want it to get lost in the shuffle so I reprint it here.

"Though I agree with some of the techniques Chris mentions in scoping out the "better" agents, I have to say that elevating this town's handful of good brokers to a level of consummate competency is unfair.I had used a couple of the "power" brokers in Greenwich on different occasions and found them to be too busy and/or scattered to pay me the kind of attention that I felt I deserved. They have too many listings and clients to manage with equal effectiveness. I eventually went with a lesser-known, non-veteran agent who has been wonderful. She appears to be among a large group of serious agents in Greenwich who are hungry for business but seem to be edged out by the veteran agents who rule the market -- just because of their reputations. And not all of these veterans have favorable reputations on the street. I'd rather deal with someone who is smart and sincerely a hard-worker (even if he/she is not a veteran) rather than a tired, pushy, elitist."

Too bad greenwich doesn't permit for sale signs by Realtors. This one makes sense.

A quiet morning, but check out the comments section - there are a number of discussions going on.

I suppose we can talk about the latest tale of wayward boys causing trouble at the high school. According to the Greenwich Time's sanitized version, five "high school football players" tossed eggs at a coach's car over the course of several nights. The coach eventually took down their license number and handed it over to the police, then resigned presumably, the GT would have us believe, out of disappointment over the actions of his players. The true story or I should say, the rumored story, is, as usual with our local paper, far more interesting.

According to rumors, and some of these originate from people who should know, the egging crew included two co-captains of the team and they all pelted the car four nights running. The coach lost his cool and lay await for them on the fourth night, then engaged them in a high speed car chase across town to Byram or, if you prefer, across the Tappen Zee Bridge. Either way, he called off the pursuit, turned in the license plate number and was then fired from his coaching duties because his reckless actions had endangered the lives of the kids (who cares?) and any innocent by-standers who might have wandered into his path (that I do care about).

The kids, again rumor has it, although the school denies it, were ordered to run some laps and the matter would have ended there with one fired coach and five sweaty kids. But grumbling arose over the lack of punishment - the kids will continue playing with the team, for instance - and the perceived special treatment accorded star athletes. So yesterday our Superintendent announced a new round of punishment will be meted out, albeit without specifying what that punishment will be. I'd guess it will be a form of "super secret double probation" but what I'd like to see, just to make clear that budding pigskin tossers are treated no better than chair kickers, is them marched to the center of the football field, Tasered three times and then arrested and held on $50,000 bail. Now that would send (some kind of) a message.

(no links this morning, for reasons known only to God and Blogger.com. - if either of them deigns to send me a fix, I'll have links in this post later)

Who knew a pool could kill?

Greenwich Time reports that the president of Shoreline Pools claims he never knew that a child could be sucked into a drain and injured, let alone killed. Well gee, sir, isn't that why they put drain covers on the things in the first place? It's a tragedy that the one you installed fell off, but its presence in the first place implies that you had some sense that danger lurked within.

But as bad or grossly negligent as Shoreline Pool's actions were, I do sympathise with the man's other argument: what was the Town of Greenwich's building department doing when it inspected this pool and granted it a certificate of occupancy? That the town gives its approval does not excuse Shoreline, but the parents of Zachary Cohn were let down twice, once by Shoreline and again by our town. They are now suing both the town and Shoreline and I shudder for my pocket book. If a fat dentist can turn a broken leg into $6,000,000 by merely waving the red flag of "Greenwich" in front of a Bridgeport jury, what will happen when another jury is presented with real culpability and the wrongful death of a beloved child?

The bag lady is singing

I have a friend at a liberal New York magazine who is convinced that global warming is about to bring our doom so the link above is for you, Nick! I continue to side with that master of doom, Glen Reynolds, who says, "I'll believe that we're facing a crisis when the people preaching that act like it". So when Al Gore gives up his private jets, when Edwards leaves his love child and mistress and returns to North Carolina (by train) to raze his 26,000 mansion and Barbara Streisand starts hanging her wash out to dry in Beverly Hills, I'll believe. Until then ...

Off to see open houses

Not much new on today. Leona Helmsley's place is open again to us agents but I've seen it once and, while it's very nice, I don't have any customers in her $125,000,000 price range so I think I'll pass this time. Those statistics I posted yesterday were so depressing that my manager told me that she was not going to pass them out at today's sales meeting for fear that everyone would run into the street and beg to be run over. Ah, it's just a cycle. Just like automobiles or airplanes, these things go round and round, up and down. The uncertainty - how down will we go, and for how long? - is what's whacking the market right now, but we've seen it before and we'll see it again.
In the meantime, if you're a buyer and have access to cash or a mortgage, you're king.
More after the tour.

Update
Well that was quick (quicker than writing this update, which disappeared down the rat hole when I tried to post it). One decent house in north western Greenwich on a beautiful acre and asking $1,499,000 which I think is pretty good. I'll have pictures and a write up of it soon. Other than that, we were treated to a Belle Haven house that sat unsold for a full year at $16,800,000. It now has a new broker and a new price, $14,250,000, but I don't think that will do the trick either. "Belle Haven premium" notwithstanding, I suspect that, at this price, the house will still be here a year from now. Another house, on three close-to-town acres, offers either a total renovation project or is a tear-down. Asking more than $9,000,000, it too will probably continue to linger. All in all, current sellers seem to be ignoring Dr. Johnson's warning about second marriages which he described as "the triumph of hope over experience."

Deck Materials

Popular Mechanics (click title above for the link) has a good article on the various options for decking material. I've made decks from three of the four mentioned (pressure treated, fir and composite) and my experience matches the reporter's. I no longer build decks - or I haven't in a long time - but Rick Crossman does, and his company, Archadeck, is here in Old Greenwich. Give him a call (978 - 9050) and he'll give you prices on all of this. If you can't sell your house and you're going to stick around for awhile, you might as well enjoy the view from a new deck.

Sales and Inventory

Well, as I suspected, we're a little slow here in town - time to head for the Rockies or the beach until say, next February. Contrary to what I opined in a comment below, the $1 million to $3 million dollar house is still our bread and butter but according to these stats, we're reduced to dining on stale crusts and oleo margarine. Here's what we're up against (and sorry for the layout - we're still futzing with this blog - what I see is not what you get, and it's frustrating):

Contracts since March 1, 2008
<$1,000,000 39 current inventory = 72
$1-$1.49 31 current inventory = 137
$1.5-1.99 29 current inventory = 98
$2.0-2.99 41 current inventory = 163
$3.0-$4.99 37 ` current inventory = 161
$5.0-$7.99 16 current inventory = 103
$8.0+ 7 current inventory = 81

Best Agents?

In a comment to my previous post concerning active, knowledgeable agents versus the 90% who eat bon bons by their pools and wait to view properties for the first time with a client (I refer to this as a "mutual voyage of discovery" and consider it a huge waste of the client's time) a reader asks how he can determine who among the 1,000 agents in town is one of the best. Since he already has my name, I'll restrict my remarks to other agents.

There are plenty of good agents in town but, short of posting yourself outside a broker open house all day and seeing who shows up and who doesn't, it's tough to figure out. If you call a brokerage firm's manager and ask for one of the top producing agents (we do represent both buyers and sellers), you might get the right person, but you might also get whoever is on floor duty that day. Depending on who is in the office at the time, this could be good or bad.

Reputation is usually a good sign - ask friends who have recently bought or sold a house who their agent was, and what they thought of her. For large firms with sales recognition programs, check the agent's websites for membership in the firm's top 5% or 1% circle (naturally, I've been in both, so I think this is a great technique!). But the top selling agent last year, town wide, was David Ogilvy, who doesn't employ such showmanship, nor does he need to - see above, under "reputation'. My brother Gideon works for Cleveland, Duble and Arnold and they, too don't have top producer awards yet his name will be found among the top sellers. Jean Ruggiero, my colleague here at William Raveis, is not only the second-most productive agent in Greenwich, she's got an excellent reputation for success and has also been a member of the Raveis "Chairman's Elite Club" forever, so there you have it.

My personal experience is that the agent is more important than the firm he or she works for. We all have websites, some of which are better than others, we all have "international connections", for what they're worth (generally, very little) and we are all capable of exposing your house to the Multiple Listing Service, which is what will probably sell your house, eventually. So comfort level and confidence should take priority. Until this year, I'd have insisted that you check how many transactions a candidate did in the past year, just to get a feel for their familiarity with the market place but today? A fellow agent came into the office last week, crowing that she'd just been out with a buyer. I suggested that she stick the guy in formaldehyde and preserve him as the last of his breed.

So ask around, make some calls, talk with a number of agents and either ask them about or check their resume. And, even in a slow market, you should probably keep your listing to six months, so that you can get out of an ill-fitting relationship. For you buyers - if you're out there - be especially careful about signing a "buyer's representation agreement" that locks you in for more than a day or two. especially if you've never met the agent before. State law requires that we get you to sign such an agreement the first time we meet face-to-face, but the agreement can be limited to just a few specific houses or one day. The worst thing you can do to yourself is sign up for six months exclusive representation with someone who, on your first tour you discover is incompatible. I use one-day agreements, but I am aware of agents who try to lock customers in for six months or even, in the most egregious example, a full year. Someone who's that insecure about getting along with you is probably no one you want to do business with.

Good news, bad news

The good news is that 1 Flagler Drive, asking $5,900,000, went to contract over the weekend, presumably for something less than asking price but proof nonetheless that there are still some deep-pocketed buyers out there. The bad news is that this gargantuan (by my standards - at 11,000 sq.ft. it's probably tiny for other folk's taste) mansion sat on the market since September 2, 2005, when it asked $8,495,000. Lesson here, I suppose, is that if you slash $2.5-$3.0 million from your asking price, you'll eventually sell anything in this price range. Another lesson is don't be so silly in the first place.

A New low in euphemism

Greenwich Time refers today to "anti-prohibitionists" who used to run booze up my creek and stash it at what is now Dot McCullough's boat house. Didn't we used to call these folks "rum runners"? More colorful and far more accurate: I'm pretty sure that the criminals were very much in favor of Prohibition, because it enabled them to make huge, albeit illicit fortunes - just ask Joe Kennedy.

By the way, I hate using Greenwich Time's website because of the pop-up ad for Greenwich Hospital that floats across the screen, blocking access to the main article. I don't know how much the paper is receiving for this ad, but I'd think the cost of reader annoyance exceeds the fee.

Don't Taser me, Bro!

Our School Board has sent out a survey to parents, asking if they "support a school resource officer at the high school". The Board eschewed the use of such inflammatory language as "armed and tasered" because they apparently feared that using the more accurate description might alarm parents and cause them to withhold their support for a program the Board itself obviously endorses. "School Resources Officer" sounds so benign - officer Friendly, there to help students find their lost textbooks, perhaps coax a stray kitten from a tree or maybe help out with a tough homework assignment. The reality is that at least one such officer tasered a kid last year for kicking a chair and tossing a water balloon - a dastardly deed, but, speaking as someone who lobbed 1/2 a grapefruit across the Student Center at a group of visiting educators way back in 1971, hardly a capital offense.

The trouble with giving cops toys like Tasers or, God help us, lots of really cool SWAT Team equipment is that, sooner or later, they're going to want to use it. I say, if we're that concerned about a Columbine at the High School, either arm the teachers or take the taser away from the cop. Someone might still get killed, I suppose, but the temptation to use non-lethal force beyond a head-lock would be removed.

Over-sized houses

I had to reset my computer's P Ram yesterday (don't ask) and it seems to have killed my ability to import photos. Drat - I was planning to start adding photos today, beginning with a picture of a new house under construction at 247 Riverside Avenue. Well, maybe later. In the meantime, if you're in the neighborhood, take a look at this place. It might not be a bad looking house in another location on a larger lot but it's replacing an 1800's farmhouse that had been set far back from the road and, no doubt because of lot-size restrictions, the builder has stuck a huge garage on the end facing the street. The total effect is just butt-ugly, is what it is, and it annoys me to think that it doubtless complies with all applicable FAR regulations. It's precisely here, where the street scape is threatened, that FAR rules should operate to save us but they don't. FAR is a complex, ineffective and costly mess, and yet, the more this is pointed out and solutions proposed, the tighter Franklin Bloomer and his friends on the land use commission grip their creation. Pride of authorship is a good thing; so, too, is the ability to admit when you're wrong.

Update
Figured out the photo thing (for today, anyway)

The polar bears are drowning! (next year)

Alaska is experiencing its coldest summer ever (in recent history, I presume). Climate experts have rushed to explain that this says nothing about global warming and boy, watch out for next year, but as one commentator notes in the linked article, how come every cooling phenomenon is attributed to natural causes and every warming spell is blamed on humans? It's embarrassing data like this that caused the almost-subtle switch last year from "global warming" to "climate change". Once the terminology was changed, everything that happens on earth can be blamed on people who live in 26,000 sq.ft. homes and fly private jets to Bali - oh wait, that's not right.

Amazing News

The New York Times hasn't done much reporting on the surge in Iraq's success but suddenly it's catching up with what less mainstream sources - .bloggers in Iraq, primarily - have been noticing for months: things are getting better. Oil production is up from 1 million barrels a month to 18 , and the Shiite militias are weakened, for instance. Why this sudden outpouring of good news? It could be that the Times has finally noticed what's been going on, I suppose, but I suspect that the paper, like all Obama supporters, wants to get Iraq behind him. His (continued) opposition to the surge, so clearly wrong in retrospect, makes him look like the inexperienced naif that he is, notwithstanding his photo-ops with various world leaders last week. But if Iraq's "so yesterday", then let's move on to things that really matter, like raising taxes on the "rich" and ruining our health care, the only things Obama fans really care about anyway.

Opne Houses

A reader asked how often an agent should hold open houses for a property. He specifically asked about broker open houses, but both broker (agent, technically) and public open houses are worth some comment. Broker open houses are essential - there's no substitute for actually going inside a house, gauging the quality of its construction, the exact noise level of the street outside, the "flow" of the house and so forth; you get none of that from merely reading the Internet listing.

But, of the 1000 real estate agents in town, probably only 100 can be bothered to go out and examine the inventory on Tuesdays (North Street and west) and Thursdays (east of North Street). What are the other 900 doing? God knows, but I certainly wouldn't want to use their services if all they can contribute to my knowledge is what's already on Realtor.com. A good broker open house is one that draws 30-40 agents. You'll never get full attendance of the 100 because, not surprisingly, those 100 are our most successful agents and they are often busy conducting their own open houses. So I'd suggest holding 2 open houses in the first 2-4 weeks, just to give everyone who's going to come a chance to see the property. After that, every 6 weeks is probably not a bad idea - we don't like returning to a property but if something's happened; a price drop, or a new buyer for that price range, we can be lured back for a refresher.

Public open houses are, if not a scam, not really going to do much to sell your house. You'll draw nosy neighbors, a fair bunch of lookers and, very rarely, an actual customer. I think only 1% of viewers at a public open house end up buying that particular house, so your odds aren't good. On the other hand, agents like the events because our success rate in selling visitors a house other than yours is much better than 1%. There are buyers, after all, mixed in with the mere lookers - they just may not like your house. I've been known to bring my notebook computer to an open house and, if a couple clearly isn't interested in the house I'm showing, I'll pull up other choices in their price range. And because I've usually seen all those houses and am familiar with them, it gives me a chance to show off my knowledge. Good for me, tough luck for you - sorry.

So you can have a public open house every weekend, if you wish (your agent, who often is busy on weekends showing other customers around town, may be reluctant, but we can usually find a new agent willing to cover, in the hope that she'll find a new customer). Given the low odds of success in this endeavor, I think once a month is a more realistic schedule but, especially in a dead market, when the only hope of unloading a property is to keep slashing its price and the seller won't do that, we all tend to adopt the professional politicians' mantra, "when in danger, when in doubt, run in circles, scream and shout". A public open house is the moral equivalent of that.

An ebbing tide lowers all boats

New York City's financial firms expect to slash their bonuses by at least $10 billion this year and some experts are predicting cuts 2 or even 3X larger. While politicians love attacking Wall Streeters' excesses, New York City's and New York state's revenue will drop 10% and 20% respectively, based solely on the lowest estimate. If the cuts turn out to be as large as the more pessimistic forecasters say, you can do the appropriate math.

A lot of those people who won't be receiving year-end party checks this year live in Connecticut so our own state's revenue can be expected to be impacted (guess which county's residents Hartford will look to to make up the loss?) and, of course, it was these huge bonuses that kept the Greenwich real estate market so strong. As Joni Mitchell sang,"you don't know what you've got 'til it's gone".

The Mighty keep dropping

14 Baldwin Farms South, 13,500 sq.ft. of new construction, was put up for sale in May, 2007, asking $9,795.000 (that's $725 per sf, if you like that measurement). Not a bad house, but there were no takers, so its price has been gradually dropping. Today the seller whacked it again, down to $7,445,000 ($551 sq.ft). Don't know whether that will do the trick for this house, but, while we're not yet approaching the "affordable housing" threshold, we're getting there.

Update
Zillow.com, by the way, estimates this house's value at $7,652,000 (I love their precision) which, until today's price drop, was more accurate than the owner's opinion. On the other hand, and while I was on their site, I looked up a house with which I am quite familiar. They have it pegged at $1,495,000 which, if it weren't on a tidal creek, would probably be about right. But it is on the creek and that waterfront aspect adds, I hope, an additional $500K or so to its value. I don't fault Zillow - how the hell would they know? - but it does demonstrate that local knowledge is always a nice thing to have.

It's not about real estate, but (I think) it's funny
From an Englishman who wasn't impressed by Obama's European tour.

Update
Okay, it's been a slow morning for real estate, so here's a bit more Obama bashing (fans of the Messiah should avert their eyes). First, despite what he claimed in Berlin, there's no drought in Kansas, Dorothy. But never mind a lack of dust bowls,there's plenty else to fib about,as detailed here. I've grown used to Al Gore being given a free pass to spew nonsense, but he's not running for President. Couldn't the press ask a bit more from this ward-heeler from Chicago?

Is Zillow watching?
Within an hour of posting a comment about Zillow.com a nice-sounding fellow named David Gibbons replied on behalf, he says, of Zillow itself. What gives? Does Zillow have some sort of internet crawler that searches for references to itself and flashes the news back to headquarters? Is Mr. Gibbons actually a local resident who just happens to know more about Zillow than me? The latter is easily accomplished. I see that the gentleman has posted a second comment, requesting feedback on how sellers react when Zillow's price estimate is lower than their own. In my experience, it's the other way around - the few times a potential client has tossed a Zillow quote in my face, I usually have to argue for a price even lower. But Mr. Gibbons, I'll be happy to aaddrss the question in detail if you'll tell me how you found this tiny blog! Inquiring minds want to know.

Untold tales
I just went on Zillow.com's website to see what they're up to and noticed a house for sale (by owner) located at 12 Lockwood Road in Riverside and asking, according to Zillow, $6,000,000. Zillow estimates its worth at $2,566,000 and I think even that figure's high. The current owners paid $2,305,000 for it in March of last year and apparently have done nothing to it, so what gives? Is this seller insanity or an error by Zillow? If it's Zillow's fault, the owner ought to check his bait more often. If the seller himself set the price, it only serves as a demonstration of why some objective advice can sometimes be a good thing.

Update
As a commentator notes below, this is a Zillow feature called "make me move", which is, as he or she says, a "pie in the sky" price placed on it by the owner w/o any intention of actually placing it on the market. Good thing, too, because,as I saw in another Zillow listing, it looks like these owners aren't going anywhere soon. I do wonder, though, at Zillow's own calculation of value. The owner of 16 Willow Road's "make me move" price is $3,995,000, which ain't gonna happen; Zillow's own estimate is $3,600,000 and that's not reality either, in my opinion. 2 Willow, a more modern house, sold for $3,100,000, in a better market. If you're selling moving services, don't bother with these guys.

Our man in Washington
There's an interesting discussion going on in the comments section of the previous post concerning Wall Street, Washington and in general, pigs at the trough. In the meantime, the question of Senator Chris Dodd coming up, I thought to confirm my suspicion that his "presidential nomination campaign" served as nothing more than a sop to his ego and a sponge for the campaign contributions he could solicit (or extort) because of his position as Chairman of the Senate Banking Committee. As for ego, there's no doubt that every boy and girl serving in the Senate believes, deep down, that he's qualified to be President. But it takes an ego of truly gargantuan dimensions to act on that belief when polls list you at 1% voter recognition. That didn't stop Dodd, of course, particularly when he could indulge his aspirations at the expense of the financial community he regulates. Sure enough, the senator put the touch on his new best friends. Try this or, for a general overview from years past (I believe this latter doesn't include his presidential campaign contributions, which are tabulated separately) this.

Dodd learned from his father, of course, that direct solicitation of bribes leads to trouble, but squeezing folks you can choose to put out of business, well that's just Washington politics. Years ago, William F. Buckley pointed out that our Senator from New London regularly voted against every single defense appropriation except those supporting new nuclear submarines. It's certainly possible, as Buckley posited, that the senator truly believed that the only weapon that could protect our nation from its enemies was the nuclear sub. On the other hand, cynics might be forgiven for suspecting that the man was just a hollow, greedy shill who looked out for his interests and his interests only. I was one of those cynics oh so long ago and I've never changed my opinion.

Wall Street hearts Fannie Mae
Good article here in Bloomberg News concerning the pending bailout of Fannie Mae. It starts out with the rather typical cautionary tale of a borrower seduced by a sub-prime lender and her eventual rescue by her friendly government bank, but then proceeds to discuss, or at least touch upon, the various scandals, fraudulent accounting and other difficulties that have plagued this entity. Why does Jamie Diamon, head of JP Morgan Chase, love Fannie Mae? Why did Warren Buffet dump all his holdings of its stock three years ago? You really should explore some of the Wall Street Journal editorials that condemned Fannie Mae over the past decade for a full understanding but essentially, Jamie Diamon and his ilk could make a lot of money peddling crap and unloading it on Fannie Mae and Mr. Buffet has different standards. Of course, when you add in the cash contributions Fannie Mae made to Chris Dodd and his cronies over the years, it's hardly surprising that this fraud was permitted to operate for so long. And will continue to do so, apparently - just ask The Journal.

Mea Culpa
There's a nice post in the comments section from Pam, who gently reminds me that I used to defend the strength of the Greenwich market. It's true, I did: I did point out what I thought were over-priced houses, and cautioned that, obviously, prices couldn't keep increasing 20% per year, every year, but I was fond of saying that, so long as NYC continued to attract the best, brightest and most ambitious young people from around the world, they'd continue to meet, fall in love, have babies and look toward the suburbs to raise those babies. Because Greenwich is one of the best of those suburbs, I was pretty confident that we'd continue to get our share of new blood, and buyers. But "No one expects the Spanish Inquisition" and I didn't expect the collapse of the credit market and the subsequent downturn on Wall Street. Greenwich never had many sub-prime mortgages or large spec developments to begin with so when the sub-prime lenders and real estate speculators started to topple I thought the disaster would be limited to places like California and Florida. Wrong.

But, long term, I still like our position. There will always be money to be made lending to millionaires, and we're still not adding any new land, so I expect to see a recovery not too long in the future (unless Wall Street and its bankers disappear and the financial world shifts to Dubai, a not entirely impossible scenario). If you own a house that you want to sell, hang on and hope. If you're thinking of buying, I'd look silly suggesting that prices won't continue falling, but as interest and construction costs keep rising, you might want to grab a good deal now - if you don't have to resell in the next few years, I think you'll do just fine.

Pricing
There were 26 price reductions reported yesterday, compared with 2 contracts. Not an encouraging ratio. One reduction that caught my eye was for 4 Old Round Hill, a big, almost new mansion just off of Round Hill itself. This place was originally priced in May '06 at $14,500,000 and slowly dropped to $12.5M a year later. Still unsold, the seller increased its price to $13.995M the next day; not a tactic I'd ordinarily recommend. It's been dropping ever since and yesterday took another hit, coming down another million to $10.9. So two years after first being offered for sale, it's still unsold and is now $3.5M less. The first price was obviously (in retrospect) too aggressive, even for the 2006 market. In today's market, the new price may still be too high. Somewhere in the past two years, I suspect, a realistic price would have moved this house but now, who knows? It's a very nice house with a great location and yard, but is anyone buying?

HoJo's
Thanks to two intrepid readers, Pam, who remembered what letter the place would start with, and Jess, who actually tracked down the article, we learn the following:

"From the Greenwich Post:

Jun 5, 2008
Going up in Blue Smoke
Howard Johnson to house new restaurant; plans for hotel
By Sonia Fernandez, Staff Reporter

The Howard Johnson will be renovated as the Delmar opens a new hotel at that location and Blue Smoke takes the place of Tandoori restaurant
Blue Smoke will be sweeping through Greenwich as Union Square Hospitality Group prepares to open its first restaurant outside New York City.

Named after its predecessor on 27th Street and Park Avenue, Blue Smoke Chophouse will move into the space that was occupied by the Howard Johnson in Riverside, along with a new hotel operated by the same group that operates the Delamar Greenwich Harbor hotel....

The Union Square Hospitality Group has enhanced the ambiance of the restaurant by focusing on wood-fired cooking. Not only will the meats be wood-smoked, but the grills and ovens will also be wood-fired....

Plans to renovate the Howard Johnson and the attached Tandoori restaurant were submitted to the Planning and Zoning Commission on March 19, but have been dropped as both the hotel and restaurant are being gutted to make room for the new plans.

While the new hotel has yet to start the planning and zoning process, Mr. Swinghamer said he hopes the restaurant will be ready by next summer . . . .

[end of article]

I love both Cajun and barbeque, so I'll probably give this a try - if the estimated completion date is accurate, I'll have a year to save up for the experience.

Funny thing - when I Googled HoJo's Riverside to see if there were any stories about its future I found lots of information on the old place with no hint that you won't be staying there again - surprise! and a map locating the motel just over the Stamford border. I suppose that, since it's closed anyway, a little misdirection won't harm anyone but how many other Google maps are this far off? Makes me want to rethink tossing out my old paper maps.

Price reductions

The condos on South Water Street have just had their prices cut by several hundred thousand dollars each. Not too surprising, but it's too bad for the developers. I think they stood a better chance of success before the town zoning folks made them slash the number of units and amenities. You'd think we didn't want Byram developed, or something.

Fun with numbers
The Greenwich MLS has just issued its latest quarterly sales book and it's been interesting to seen how my organization continues to screw up sales data, for unkown motives. 723 Lake Avenue, for instance, was actually first listed at $7,250,000 in February,2005 and finally sold for $5,775,000 in June, 2008. The sales book shows an original price of $6,995,000 (one of the intermediate prices as it climbed down, actually) and only 210 days on the market. I'm not too good at math, but February '05 to June '08 would seem to be more than 210 days.

The sales book gets 26 Mayfair Lane's days on market right (I think - I didn't actually count: 547, but shows the "original price" as $6,750,000, thus making the selling price of $6,250,000 look reasonable. "Nothing to see here - move along, move along." In fact, the original price was $8,350,000 and $6,250,000 represents a heck of a bite from that dreamed-for sum.

So who's gaming the system here? Maybe no one - whenever I inquire at the Board, they blame everything on some third-party computer program that they can't control, but our data are being corrupted and that, in turn, makes it impossible to trust what's being spewed out as truth. In the long run, this can only hurt the entire Greenwich real estate market.

Needless Tragedy
Greenwich Time reports that the head of Shoreline pools has been arrested on second degree manslaughter charges in connection with the drowning death of a four-year-old boy last summer. According to the prosecutor, our state building code mandates three separate safety devices/systems - the newly installed pool had only one of them. Admittedly, the code had recently changed and the pool company may have been unaware of its new obligations, but what troubles me is that our town's building inspector issued Shoreline a certificate of occupancy, an official imprimatur signifying full compliance with all applicable regulations. Our building department has no difficulty sniffing out non-lethal violations of FAR requirements, and is delighted to order builders to chop up attics into non-usable space, lower or remove retaining walls deemed too high, etc. What's so difficult about inspecting something as dangerous as a pool and ensuring that it complies with code?

Statistics
We have 626 single family homes currently for sale in Greenwich, an 18% increase over this time last year. From May 1,2008 through today, July 21, 37 houses sold, compared to 68 last year (comparable numbers for YTD are 174 vs 208.
Contracts aren't any better: 115 this year (May -July 21) vs 148 last year and 160 in 2006. That's a 28% drop over two years, if my calculator and atrophied math skills haven't failed me.

The market is going down
I've complained before about the difficulty of comparing selling prices for the same property because so many houses are renovated between purchase and resale. Here's one that wasn't: 26 Lake Drive South, in Riverside. The current owners paid $2.125M for it in January 2005, did nothing to it (the previous owners had done the necessary renovations like new kitchen and baths)and put it on the market this year for $2.250. That was a reasonable response to the softening market - after commissions and taxes, they'd have been luck to break even - but it sold yesterday for just $1.850. So apples to apples, three and a half years later, it was worth $275,000 less.

And here's another sad tale, perhaps, depending on how you feel about wildly-unrealistic original asking prices: 402 Sound Beach Avenue was listed February, 2006 for $3.399 M and went to contract yesterday for something less than its latest price of $2.395M. In answer to my reader who keeps urging me to show over-priced listings, this is a nice example of why I won't bother; it took 2 1/2 years for the seller to come to his senses. Of course, by pricing it so high to begin with, the seller missed what was left of the bull market and sold on the downside, all to his loss - I doubt this house was $1,000,000 too high in 2006, but it sure was by the time he sold it.

On a cheerier note, Joann Erb's listing, direct waterfront at 200 Shore Road (close to the beach), was listed June 26 this year for $8,000,000 and has already gone to contract, demonstrating again that a beautiful newish (5 years?) house with spectacular waterfront will trump price, a busy road and a narrow lot, every time.

Well, almost every time. 23 Eggleston Lane isn't a new house but does have waterfront on the Cove and a dock. It originally asked $8.5M and dropped again yesterday to a new price of $6.975. You'd think that a $1.5M chop would speed things along but we'll have to wait and see.

26 Mayfair Lane originally asked $8.375M. 547 days later, it sold for $6.250M. I won't presume to read the minds of sellers, but these seemed quite elderly and I wonder if they really wanted to get a high price or just got some bad advice. Either way, it's tough to keep your house in showroom condition for almost two years so, unless you like that sort of stuff, I'd price it realistically and move on.

The glaciers are melting! The glaciers are melting!

Bruce Museum has mounted an exhibit depicting the melting of glaciers all to scare little kids and prove the wickedness of our ways. Fine and dandy, but I do wish they'd thought to include in the exhibit a reference to wooden structures dating from the 12th Century emerging from the melting glaciers in Switzerland, or even some indication that not all scientists agree that the current warming spell is unprecedented in human history . Because, if the earth has undergone this sort of thing in recent history but before the small scattering of humans had the numbers to significantly affect the climate, then perhaps we should pause a bit and reconsider shutting down 80% of the western world's economy. Just a thought.

Seller's season?
A reader asks about the upcoming fall season but I confess that I don't know what's going to happen. Historically, the spring season began in late January, continued through March and early April, then cooled off when all the buyers who wanted to get in their house by the end of June had found a house. Summers tended to be slow, but there were buyers who wanted to be in their new house before school started so they remained active and we usually saw a fair amount of activity. I always liked looking for houses with buyers in July and August because so much of our competition - other agents and buyers - tended to be away and the search could proceed at a more leisurely pace. The Fall market began after Labor Day, roared through the next ten weeks and then shut down for the Thanksgiving-New Year holiday season.

This year looks pretty dismal, to be honest. There is a scattering of buyers around - one of my listings is being shown today, in fact - but certainly their numbers are way down and there's absolutely no sense of urgency. And why should there be? Mortgages are hard to find, house prices are dropping, we're threatened with a possible string of bank runs, Wall Streeters are jumping out windows, Iran threatens war (unless, as it insists, the threat to wipe Israel off the map "was just a joke" - ha ha ha), the Demmerkrats loom on the horizon, etc. etc. If I were a buyer but didn't need a house right away, I think I'd wait. Of course, sellers are getting nervous, too, so what might have been an unacceptable offer six months ago may very well be received with gratitude today. If the market does rebound by spring (big if), that opportunity may be gone.

All of which is to say that I may go on vacation in August and, if I find myself in a nice place, I just might stay there through the fall.

Oops!
54 Rock Maple Road (off Stanwich) was originally listed for $12,450 last year (thanks for the correction by one of the commentators below. I thought it crazily over-priced at the time and said so (without identifying it) in my column. Apparently the market agreed with my assessment so it hasn't sold and today it was marked down, again, to $6,950,000. The sad thing (for the seller, at least) is that a lot of folks in the $7,000,000 market last fall never saw this place when it was pegged at almost $12M (notwithstanding the pleas of one of my commentators, agents just won't waste their time showing grossly over-priced houses. The seller is obviously not serious, so why bother?. They either bought something else, like my own clients, or moved on. Either way, there are fewer buyers in that price range now than there were a year ago, so an opportunity was missed. Where's the bottom for this house and the market in general? I don't know.

A Practical Seller
Nokia, the cellphone people (they also used to make fine snowtires, but I believe they've left that business) bought 30 Owenoke Way in Riverside for one of their executives two years ago(6/29/06) for $2,950,000, down from its original asking price of $3,450,000. The executive having presumably moved back to Finland, the property is back on the market, asking $2,995,000. The company may or may not get that desired appreciation of $45,000, but at least it hasn't mistaken a flat or falling market with a soaring one.

5 Lockwood Drive, in Old Greenwich, seems to be taking a more positive view than mine. This house failed to sell at $2,950,000 in 2005 and was withdrawn. Now it's back, still asking $2.95M. I'm not at all sure that the market is better today than it was in 2005. The seller obviously would disagree.

Falling in Love
It almost never happens, at least in real estate. It's true that, in 1954, my parents saw a house in Riverside with a beautiful library, with fireplace, looking west over a huge backyard and my mother did immediately fall in love: she envisioned having her afternoon tea in that room, with a crackling fire behind her and her wonderful children frolicking in the back yard. My parents bought the house, but the tea thing never happened - five kids did, and our squabbling, noisy behavior put paid to that dream. A typical outcome for most real estate fantasies.

But other fantasies persist: the stranger who will fall in love with a house while simultaneously agreeing to pay more for it than a comparable house, the "foreigner" who, lured to Greenwich by some "international" firm's website is shown your house, converts Euros to dollars in his head and makes you a full price offer, or Elvis returning from Mars in order to reestablish Graceland on your site. Don't hold your breath for any of these to occur.

What you as a seller might want to do is have your agent arrange for you to see two or three houses that she feels are competing for your buyer, then go see them while maintaining an open, objective mind. Leave your memories and life's adventures behind when you go. The swing set that your now 22-year old daughter played on when she was three holds no value, sentimental or otherwise, for a buyer. Same for that secret flower garden where your wife hosted Brownie troop meetings. All warm memories for you, and worth nothing to anyone else. Memories aren't a factor in pricing. On your tour, check out the kitchen - are you offering Formica counters and 40 - year-old cabinets? Was your bathroom last updated during the Coolidge administration? These may indeed have been "good enough for my family", but you're trying to sell the place to a new family, not keep yours in place. Adjust your price to your competition.

And if you have renovated your house, know that all the cherry flooring, Sub-Zero appliance and coffer-ceiling libraries you've installed probably don't set your place apart from others in your price range - they all have such things, or lack them, depending on that price range. If you've got all those amenities and your competitors don't then congratulations: you've priced your house right and you should expect an early sale. If it's the other way around, you're doomed.

Alternative Energy Hogwash
AlGore has demanded that we stop all production of oil and switch to "alternative energy" (undefined) by 20015. How are we to achieve that? He doesn't say. Nor would the very nice young college student who visited my house the other evening, soliciting signatures on a petition that "was in favor of alternative energy". "How are we going to get energy produced in Arizona to homes in Connecticut?" I asked. She was a little imprecise in her answer but I didn't press her - she was about the age of my own daughters and there was no way I wanted to be mean to her. But for all you fans of science fiction stuff, here's Steven Den Beste's take on the subject. He makes my point with far more clarity and succinctness than I can.

The other education shoe drops
Despite its cheery headline today,Greenwich Time does finally get around to reporting the bad news: test scores for writing and math are down for elementary and middle school students. The end of the world is not upon us - almost 80% of the students are at at least grade level in these skills, but the future for the failing 20% looks bleak. There were some thoughtful comments submitted in response to my previous post on this subject, and I do sympathize with teachers who face the unenviable task of drumming knowledge into thick skulls distracted by imessages, the latest U Tube and last night's results from American Idol, but what he heck are we doing here? Some years ago, while trying to make a living as a writer (didn't work, but it was fun), I hired on as a Kaplan tutor for LSATs - Law School Admission tests. My students were all college graduates and eager to master the test, something you don't often encounter when teaching high school students, and I had reasonable success guiding them through the logic and reading comprehension questions that comprise most of the exam. But I was struck by their complete lack of historical and literary knowledge. I'd refer to an event, or a line from Shakespear or even a post WW II classic and be met with blank stares. Edmund Burke said that without continuity, men 'would become little better than the flies of summer"; we're fast approaching that level.

My own beloved daughter, a graduate of the high school, has an appalling lack of 20th Century history and I wouldn't dare to test her knowledge of eras predating that. I once, after seeing her reading some insipid bit of fluff for her English class, wrote to her teacher, who happened to have taught me English in 1969-70, my Junior year. I pointed out that we'd read "Look Homeward Angel" that year, which opened up the entire world of Thomas Wolfe and his works - I think I read them all. "So what's happened?" I asked. He replied that, today, if he assigned anything even approaching the difficulty and length of Wolfe, his students would simply refuse to read it.

I don't pretend to know how to instill a love of learning and the aptitude to apply a keen mind to difficult tasks, but if we can't do it in Greenwich,with all its advantages, I suspect that the Indians and Chinese will figure it out. And then won't we be in trouble.

Update
I agree with the comment posted below about seizing control of our schools back from the union and our superintendent. For an example of how this was done in Los Angeles, check out this article