AGI and Lehman, explained. But the authors seem to have no better idea what will happen going forward than I do which is to say, eh?

World does not end (today)
Stocks Soar

Buying during the Depression?
A reader asked if anyone had the institutional memory of what happened to real estate in town during the Great Depression (and no, I don't think we're going there). I'll call some of my friends who do have that kind of memory - Bernie Yudain would be a great source, I suspect - but I do know that a friend of mine's great uncle was offered almost all of the land that now comprises Indian Head Road and its offshoots for $30,000. He saw the value but alas, was no better off than the seller so he turned it down. My friend is still working for a living but had that land been bought ...

I also have noticed that some of our most magnificent estates were built in the 30's, and why not? Land was cheap and labor was cheaper. If you had money during the Depression, there wasn't a better time to spend it.

There are already great buys out there today. I've mentioned my brother Gideon's listing on Indian Head Road - one acre of beautiful lawns, pool, secluded, with a custom built house, all for $3.6 million. Other agents and I were marvelling today over how much the market has changed because, 2 years ago, $3.6 million in Riverside bought you very little. Heck, I sold two houses just last year at $3.8 each and, while the houses were nice enough, each was on a half acre on a busy road. And no pool. If I had money and wasn't worried about being forced to move in the next year or two, I'd be out looking for bargains. This period will eventually look like a buying opportunity if you buy the right house at the right price.

And so, look: I found some happy news after all.

Well darn, this isn't going to help fill out the Happy News department. NYC coop prices plummeting.

Manhattan's finest co-op apartments may have already lost a fourth of their value as a result of the financial crisis, and the worst is yet to come, says leading New York estate broker Kathy Sloane, of Brown Harris Stevens.

An owner of a five-million dollar Park Avenue apartment, only an average residence by investment banker standards, "may be lucky to achieve $3.5 million" a month from now, said Sloane, whose clients have included celebrities, the super-rich and prominent families including the Clintons.
"If someone saw a bid between $3.8 million and $4.2 million from a qualified buyer, take that bid," said Sloane in an interview to be broadcast on 20/20 Friday night.

Some of these owners sold in New York and came out here to buy houses. Can anyone say, "down sizer"?

Sucking up to Royalty
Okay, this is shooting fish in the barrel but ...
Grab onto your hats, my old paper,The Greenwich Post, has launched its new gossip column:

Scene ... Greenwich residents and talk show hosts Regis and Joy Philbin were seen dining at Valbella in Riverside last Saturday night. At a separate table was WWE chairman and Greenwich resident Vince McMahon and his wife, Linda. Also seen dining among the celebs was Greenwich Hospital president and CEO Frank Corvino. On a separate occasion, His Royal Highness Prince Moulay Rachid of Morocco and a bevy of young beauties were dining downstairs in the wine cellar while his three bodyguards waited for him upstairs.

Scene... Riverside residents and TV personalities Kathie Lee and Frank Gifford were seen having dinner at Figaro on Greenwich Avenue last week.

Aside from the fact that, if you want to see, meet and actually speak with Frank and Kathie Lee you can come to my church on any Sunday and do just that, instead of gazing longingly from afar as Frank masticates a lamb chop,is it really worth chopping down a tree to distribute this hard-hitting, must-have news? Does it enrich one's life to know that someone heard from someone else that Eric Clapton was on the same island (maybe even at the same time!) as that third party? What sort of self-respecting newspaper editor allows himself to be involved in this schlock?

It surely hasn't escaped the notice of the Greenwich Post that our town is suffering a bit of a rough spot in the ol' real estate market yet, to save printing costs, they've cut their last remaining real estate columnist to a bi-weekly schedule to make room for the doings of His Royal Highness Prince Moulay Rachid of Morocco. The columnist is no loss, unless you wanted to read the latest press release from the National Association of Realtors ("Everything is beeeoootiful, everything is fine ..." ) but still, how does this man look himself in the mirror?

I was the only paid columnist at the weekly advertiser (and they solved that problem) so the absence of real estate news can be attributed solely to the lack of funds to actually print a paper. Of course, if you remove all the content from your paper, there might - just might - be a connection with a declining readership, no matter how many copies you stuff, free, into mailboxes.

I'm not (particularly) bitter that I'm no longer associated with this drowning enterprise -I'm having fun being on line and I'm proud to be free. My former editor might try it himself.

Do as I say, not as I do

This fine gentleman from our Parking Authority is parked in the exact location that netted me a $25 parking ticket. I have his license plate (197 GW) - should I drop him a note and ask that he contribute to the cause?

How not to cut your price
65 Summit Road in Riverside just cut its price from $1.375 to $1.350 million. I strongly encourage sellers to check their asking price and slash that price if no one's offering to buy, but a tiny price cut will accomplish nothing. If your house isn't selling, a $25,000 difference of opinion as to value isn't the cause.

Housing Lots for sale
68 Halsey Drive in the Havemeyer section of Old Greenwich was offering a four-lot, approved subdivision for $3.450 million, or $862.5 per lot. It's been reduced to $2.7 million - $675 per lot but I'm not sure that will do it. Assuming $1.0 million to build and carry each house here, you'd have to sell them for $1.675 each, or more. Two of the lots are tiny: 7,000 and 8,000 sq.ft., respectively, so if they sold for less, you'd have to get more on the other two. I like Havemeyer, but new houses there were struggling at the $1.75 range at the height of the market and to risk that kind of money today means you've got a rosier vision of the near-future than I.

Fuld's Acres
Wanna buy a house?
I figured that Dick Fuld was too busy to invite me in for a cup of coffee this morning and escort me on a photo tour of his cottage at 717 North Street, but here's the entrance. Very nice, and I suspect that it nicely balances his $26 million coop in the City.

You know, my father pulled a few of his Wall Street connections years ago and got me an interview with his best friend, Bill Golden, who mentored me when I'd just graduated college and was considering: Wall Street or law school? I concluded that I was strong on communicative skills and weak on math so I chose law school (reading his obituary linked here, I just discovered that Mr. Golden hated math too - darn!). Now I learn that all these "math wizards" were just making up the numbers as they went along - shucks, had I known that, I could be living where Dick does now, instead of being relegated across the street, snapping pictures with my iPhone. Too late smart.

89 Lower Cross

House for sale, cheap
This almost-completed mansion at 89 Lower Cross Road can be yours for just $2.595 million. It's within a stone's throw of prestigious Conyer's Farm (but just try throwing a stone across the barrier and you'll be arrested faster than you can say "chukkar") has it's own pond just beyond a large swath of wetlands and the building is mere inches from the road, thus sparing you expensive snow plowing bills in the winter. I'd rush - as they say, "this one won't last!"

Slappy the Clown's Happy Dance

Happy Talk
I am under increasing pressure from my real estate peers to stop being gloomy and start reporting happy news. Ever eager to please, I looked up recent listings going to contract and compared them to last year. From June 15 through September 17 of 2007 147 houses went to contract, compared to 101 this year. That's a drop of 31%, more or less. In the shorter period of August 1 '07 through September 17 2007, we saw 64 contracts vs 33 this year.
So what's the happy news? I dunno - I suppose we could have sold nothing, and wouldn't that be a bummer.

This is offensive
Received via email this referral fee schedule from a local builder:


Offensive because I think a real estate agent's customer should be able to trust that she's getting good advice, not a disguised sales pitch. Or at least, that's my opinion.

Sleeping in the Playground
The town is planning to
redo the Bruce Park playground.
According to its sponsors,
a) Every child can reach the highest play level
b) Play structures are configured to support all children’s development
c) Pathways and surfacing are universally accessible
d) Cozy gathering and away spaces provide a rest from the action
e) Equipment such as swings with back support
f) Sensory-rich and ground level play activities.

It all sounds boring enough to drive even the most adventurous child back to his videogames.

Ugly
Stocks not doing well today
Uglier still:

With no hope for the return of the mortgage securitization and overall liquidity continuing to dry up, we believe that with fewer mortgages available,fewer people will qualify for mortgages, and homeownership will head materially lower. All this creates a recipe for meaningfully lower US house prices.

With apologies to the Rev. Jeremiah Wright, the chickens have come home to roost

Lehman's bad real estate ventures

One real estate investment broker described Lehman as “the real estate A.T.M.”
“They definitely were the mavericks out there,” said the broker, who did not want to be identified to protect his business relationships. “If you needed money, you could get it.”

Does anyone remember the Lehman/Antares ventures? Here's what Mr. Beninati, "Mr. Antares" says of his lenders on his own web page:

"In every deal we do, lenders decide if that project is for them," Beninati said. "But over the years, the opposite problem has arisen. Several banks might agree to finance our projects, and we regularly have to call some of our oldest and dearest friends in the industry tell them that Antares cannot give them business on a particular deal."

Gee, I don't know, it seems to me that Antares was only too happy to "give them the business".

From The Grim Reaper Gazette

Housing starts at 17 1/2 year low
I've had a couple of conversations with builder friends and clients and I can confirm that this same sense of caution pervades Greenwich, too. Of course, fools rush in ... and all that, so we may still see some activity.

Where's the legal authority for the Government to buy AIG?
Nowhere, but apparently not enough people care.
David Zaring:

But, in the Fed's legal defense, maybe, just maybe, the settled expectations are different here, based on the government's takeovers of Fannie and Freddie, and the pleading by AIG for government involvement. Does the very fact that the insurer hoped for Fed action suggest that the Fed could act?
Hmmm. The other defense would be that emergencies are emergencies, and when that happens the rules go out the window, and hopefully regular elections mean that the officials the people trust are dealing with the emergency. Abraham Lincoln adopted that reasoning, and he won the Civil War. I suspect we're at the "anything goes in an emergency" stage of things. But maybe reasonable minds could disagree.

Megan McArdle writes,

A lawyer friend IMs "I would be fascinated to know on what authority the Fed is claiming the right to do this." It's probable that they don't actually have the legal right to do anything like this. Their authority is this: who's going to stop them? No one wants to take on responsibility for this mess themselves.

I'm all for living in interesting times, but these days, things are getting curiouser and curiouser.

Hunter Thompson Lives
Reading the rantings of Greenwich Round Up is a bit like spending time with your crazie Uncle Eddie, fresh from another unsuccessful round of electroshock therapy at Silver Hill. Always entertaining, equally confusing and crammed with HUGE HEADLINES, tuns of mispelings and nasty things to say about almost everybody. But always fun, so long as you're not on the receiving end.
And, to give Crazy Eddie his due, they guy is way ahead of the local press on issues like the Byram School fiasco, the bozos (okay, I used a picture of bonobos to depict them, but close enough) on our School Board, and the sad, escalating decline of our daily paper, Greenwich Time.
I disagree with him most of the time - I happen to support the new Stanwich School, for instance, even though I have no kids at that school and if I, as a disinterested person, can applaud their efforts it seems reasonable to assume that our P&Z's decision in favor of the project could be because reasonable people think it's a good idea, rather than because of bribery and corruption.
But so what? It's a fun read.

NOT subject property
The builders are leaving tra la, tra la
89 Lower Cross Road was offered as a to-be-built mansion back in 2006 for $6.7 million. Construction started but no one bought and now you can buy it, complete with "foundation and partial framing" completed, for just $2.595. How valuable are such improvements after they've sat out in the weather for a few years? Another way of asking that is, what's a building lot worth on Lower Cross, minus the expense of scraping off and disposing of the wreckage?

Gabriel Nathan Schwartz
Ah, those fun loving delegates!
Some readers suspect me of being a Republican sympathizer. I'm not. But I do like following the foibles of politicians of both parties, such as this yokel who got robbed $50,000 at the Republican convention by a lady he let into his hotel room. What a 30-something male lawyer is doing carrying that much jewelry is a mystery, but $4,000 of the loss was a pair of earrings and he is a Republican, so perhaps that's the explanation. But take a look at the guy's picture. Could anyone with an ounce of self-honesty think this face would cause a beautiful woman to invite herself up to his room? Maybe she was also a masseuse.

One of my favorite and wisest writers, James Lileks
Has this to say about boom times:

Having lived through a few such panics – real estate in the late 80s, the Savings and Loan crisis, junk bonds, the dot-com nonsense – I can conclude only one thing: no one pays attention to their gut. Whenever real estate spikes, my gut always says it’s a temporary thing, because two-bedroom houses with a cement yard and a bathroom that consists of a bucket can't possibly be worth $800K just because it’s in California. Ditto the dot-com: start-ups like tentonsoftofu.com were getting millions of dollars with the usual vague projections: in the future everyone will be online, and since tofu will be more popular than ever, people will want to buy 20,000 pounds at a time if we offer the convenience of online ordering combined with free shipping. Most people thought it was nonsense, but the times were good, so enjoy.

Pricing tip
I'm aware of a certain house whose owners paid too much for, back in the day, then compounded their error by over-improving what they'd bought. It's a lovely house, but it's priced way above what they can ever hope to get for it. When their agent suggested a price reduction, they proudly showed off a new kitchen they'd added and asked, "how can you ask us to drop our price now that we've redone the kitchen?" Well, if they'd asked their agent, she would have advised against throwing more money into the house. At a certain point of over-pricing, adding features will not address the real issue, which is price. These folks have just built a beautiful kitchen for someone else to enjoy but it will be at the sellers' expense. My advice? Get advice, before you spend money on a house you're trying to sell.

It must be the Boston Globe's day
here's a good blog on truth in real estate advertising. Turns out, buyers aren't stupid. Who knew?
The writer wonders what the phrase "must see" means. Had she asked, I'd have told her: a complete mess from the outside, so bad that no self-respecting buyer will get out of her car to examine it. The phrase implies a promise that there is something to see inside but in my experience, that's a lie.
One of my favorite phrases is, "now priced to sell". What the hell was it priced at before?
Or, "renovated", with no further details. Believe me, if we agents can find anything positive to say about a house, we'll mention it, so if you see this phrase but no specifics like new kitchen, new master bath, etc., you can assume it means that the fireplace ashes have been removed and the dust bunnies swept from under the bed, period.
"Convenient to transportation" of course, means it's cheek-by-jowl with the highway, the railroad, or both.
"This one won't last" almost always appears on dogs (and usually in conjunction with "must see". It's always bittersweet to see this description still lingering on year-old listings.
Need any other interpretations? Care to add some of your own? Pile on.

More pricing follies
29 Byfield, mentioned here before, was listed April 15, 2008 for $9.495. It's been dropping like a rock ever since and today was reduced again, to $5.698.
39 Boulder Brook, also listed on April 15 by the same broker, came on at $8.595 and dropped yesterday, again, to $4.998. Same broker, same listing date - same builder? Someone's losing sleep, if so.
12 Doubling Road, coincidentally, was also listed by the same broker,back in September '04 for $14.5 million and eventually sold for $7.575. A building lot was split off and sold for $4.130 in '06 (nice price for the seller, I think) and now the original 1913 mansion, completely restored but shorn of several acres of its magnificent lawns, is back on for $13.5 million. Convenient location and nice house so maybe this time's the charm.
And then we have 228 Stanwich Road. Its original owner tried to get $2.125 for it at the height of the market in 2007 but finally sold it for $1.7. The new owners returned it to the market, untouched, a year later, and asked $1.895. Today they lopped off $46,000. Call me crazy, but I think they'd be better off shooting closer to the price they paid for it. Regardless, I don't think a 2% price cut is going to be much help.

35 Club Road
This new construction in Riverside sold yesterday for $8.675. The owner wasn't engaged in a spec project, as I understand it, but someone saw the finished product and made him an offer he couldn't (or didn't) refuse. A new record for non-waterfront property on this road, I believe. So that's nice.

Uh oh
Five hours ago: Goldman Sachs expected to reassure investors amid market turmoil
30 Minutes ago:Goldman Sachs reports huge profit drop

Are you reassured?

Good Lord!
A columnist for the Boston Globe who understands Obama's tax plan. Next up, the New York Times? Nah.

Okay, here's some good news for homeowners
If this market has messed up your dream of getting rid of where you live and moving into something better there is a silver lining: great contractors are available for small projects. My Pal Nancy recently hired Rick Hvolbeck and his partner, Al (whose last name I should know, but forget) to replace a rotten column (not my newspaper column but one holding up the porch), failed sills and window trim. They did a terrific job for an incredibly reasonable price. No surprise here: Rick's a 3rd generation Greenwich home builder and Al clearly knows his stuff as well, but, according to Nancy, they came when they said they would, were neat, did a beautiful job and had no hidden expenses when they were finished.
Rick can be reached at (203) 249-2297 or RCH1043@aol.com. The two of them are so good that I'll permanently post their contact info on the side of this blog. If you've been considering new kitchen cabinets, a new garage (these guys can build you a new house, of course) or, like Nancy,just fixing those depressing, rotted bits of your house, now is the time to do it and these two are the men to call. No, I don't get a discount for my own work, I just know how difficult it has been to find competent people willing to attend to smallish jobs. Now's your chance.

Boulder Brook now reduced to $4 998. I'll check
my earlier post on this tomorrow but I.believe it started in April at $8 5 Stupid

And who's going to pay those taxes?
Maybe not real estate agents. No contracts today, at all.

Anticipating a winning election
Democrats planning
gas stamps for po' folks.
I mention this today in honor of it being quarterly tax payment time. Hang onto your wallets, we're in for a ride.

Overpricing houses isn't an unheard-of-until-now phenomenon
This perfectly nice house was first listed back in June '02 for $7.995 million. It didn't sell and it's appeared and disappeared from the market since then. Today it's back, asking $6.995. That may or may not be the right price now, but a million less after six years suggests a misplaced optimism back then.

Lehman price and volume charts
Question for you traders
Lehman opened at $0.26 today, rose as high as 0.34, dropped to 0.15 and is now (well, 15 min. delay) trading at 0.18. The company is bankrupt and almost by definition, the shareholders are wiped out and the shares should be worthless. I can understand someone selling this stuff but who's buying it? This phenomenon seems to occur in other bankruptcy situations, too, and I've never understood it. Shorts who have to buy what they sold? Befuddled old grannies? An explanation would be welcome.

This is the kind of stupidity that hurts the cause
From a Litchfield paper's article on a "green" home

The insulation isn't the pleasant bubble gum or canary hues that distract a person from the carcinogenic dangers of typically used Fiberglas rolls. [emphasis added]Though Fiberglas has a high R value, which is the measure of thermal resistance, it is also very permeable and allows hot and cold air to pass through easily. The zero energy house uses recycled spray-on cellulose, made mostly from old newspaper, that is healthier, fireproof, insect-proof, has a slightly higher R value and at 7.5 inches thick, is nearly impermeable.

Trying to scare people with phony cancer claims is just stupid because, when they discover you know nothing about that, they might begin to wonder if you know anything about the subject at all. Reporters should stick to facts. Opinion bloggers, on the other hand, are free to write whatever damn nonsense we like.

The (stock)market seems to be bearing up but ...
If I recall, we've seen the bottom fall out late in the afternoon just before the closing bell. There's still time for fireworks. Discouraging note: not a single contract has been reported by the MLS as of this posting. They may be too busy over there to post contracts (perhaps they're on the phone with their stock broker) but you usually see some signs of life after the weekend. Stay tuned.

What happens to a $3 million house when a $5 million drops to $3.5?
Nothing good, I suspect. I asked this same question a few years ago in my column when I noticed the large number of huge spec mansions going up and I questioned whether they'd all sell. I got no answer because at the time, they did keep selling and at ever-increasing prices. Now they aren't, and their prices are falling faster than Lehman Brothers' shares.
If what is really a $5 million house is slashed to that price after stupidly being priced at $8.5 no harm is done, I'd think, because now it's just competing with its peers. But in this market, what can be said objectively to be worth an absolute amount? What might have been considered a well priced house at $5 million a year ago may not sell today, regardless of what we agents think. If its builder, faced with foreclosure and total loss versus minimizing his losses and getting out while he still can - picture the dilemma of Merrill Lynch's chief yesterday afternoon - cuts that price to $3.5 the "real" $3.0 million house is going to look like a comparative dog. And, assuming someone can afford $3.5, won't he buy that instead of the lesser house? And won't the lesser house have to be marked down to reflect that?

All this is speculation, of course - most of the price reductions I'm seeing simply serve to bring the price closer to reality but I suspect it won't be long before genuine price cuts drop houses below what we would have considered their fair market value last year. If so, we'll have a merry time of price restructuring, from the top down. Good for the market and for buyers, eventually, but dispiriting for sellers who'd counted on gaining a fancy price for their home.

More on Starbucks
O.K., that's Ahab drowning, not his pal Starbuck but you get the picture, so to speak. I went onto Starbuck's website this morning to try to lodge a complaint about their discontinuing the sale of Colombian coffee and, so far as I could tell, there's no one out in Seattle who cares to receive any such message. Want information of buying CDs? Locating a frappe java?
Click away. Got a complaint about actual coffee? Screw you. Well, in this blessed system of sort-of-free markets, I have a response to that.

Oil Prices Fall below $100.
How can this possibly happen, when oil speculators are capable of setting the price wherever they want?

Won't somebody please invent an alternative to oil so we can wash our hands of the Middle East?
Orthodox Vigilante Squads Terrorize Citizens

Business websites overloaded
I can't log onto Bloomberg.com or biz.yahoo.com, presumably because they're overloaded with readers. WSJ.com is working and, here's a surprise, they expect an anxious day. Too bad my father isn't still alive - he began working on the Street in 1929 and would no doubt have some perspective to lend on the "sky is falling" crowd.
On the other hand, maybe the sky is falling. Regardless, we're in for an interesting day, or time.

Bottom headline of the day
Obama Blames Wall Street Crisis on Republicans. George Bush and Dick Chaney were also spotted placing bombs around the Dot.com boom back in 2000.
Okay, there are two today:
Lindsay Lohan Lashes out at Palin

Economic Illiteracy
Judging from conversations with my own kids over the years,the basic tenets of capitalism aren't being taught in our schools. Here's part of what George Will writes in today's Newsweek. I wonder whether we can persuade him to come guest lecture at the High School? He'd be useful on a day like today.

But back to Big Box doubling prices after the earthquake. The indignant student, who had first gone to Home Depot for a flashlight, says it "didn't try to rip us off." It was, however, out of flashlights. Ruth suggests that the reason Big Box had flashlights was that its prices were high. If prices were left at regular levels, the people who would have got the flashlights would have been those who got to the store first. With the higher prices, "someone who had candles at home decided to do without the flashlight and left it there for you on the shelf." Neither Home Depot nor the student who was angry at Big Box had benefited from Home Depot's price restraint.

Capitalism, Ruth reminds him, is a profit and loss system.Corfam—Du Pont's fake leather that made awful shoes in the 1960s—and the Edsel quickly vanished. But, Ruth notes, "the post office and ethanol subsidies and agricultural price supports and mediocre public schools live forever." They are insulated from market forces; they are created, in defiance of those forces, by government, which can disregard prices, which means disregarding the rational allocation of resources. To disrupt markets is to tamper with the unseen source of the harmony that is all around us.

Sally O'Brien died last Friday.
I didn't want to intrude on her family's decision when to announce her death but today's Greenwich Time carries her obituary. Sally was one of the great ladies of real estate and a terrific person of integrity. I loved her quirky listings and I thought the world of her.

Before Lehman's collapse eclipses Fannie Mae
The Washington Post today explains how Fannie and Freddie bought Congress. Plenty of blame to toss around, but a good place to start is Dem. Barney Frank

Why do people screw good things up?
Starbucks has stopped selling Columbian beans. The kids behind the counter confirm that it was a huge seller (in fact, I believe Starbucks was the largest purchaser of Columbian coffee in the world, but I could be wrong on that). I don't like what the store does to coffee once they try to brew it themselves but their beans, freshly ground and prepared in a French press, made a very good cup of coffee. And no, I'm not going to buy one of their even pricier blends, I'll just have to find a new source for my morning brew.

Similarly, the idiots who ran the Sitemeter spot which runs on this blog and offered readership statistics to anyone curious to see them have now improved their product to require sign-in, extra clicking and God knows what else. I've always been lazy so "leave well enough alone" has been my life's mantra. Others obviously have more energy.

Does "green" equal $green?
Not as far as I can tell. A number of builders have gone to extraordinary lengths the past few years to incorporate sensible energy-saving features like super insulation, really sophisticated heating and cooling systems, "E-glass" windows and so forth. I think these houses are great so it disappoints me that the home buyers seem unwilling to pay anything extra for such features, even if they'll save a lot of money in the long run. I know, I know, "in the long run we'll all be dead" but this kind of construction makes a house immediately more comfortable to live in and payback should come in just a few years. But I've been informally keeping track of the selling price for these houses and it seems to me that they sell for just about what their less sophisticated brethren sell for. Location, number of bedrooms and all that still rule and buyers just aren't interested in saving on heating and cooling costs. Maybe $4 a gallon fuel oil will educate them. In the meantime, if you are a buyer, keep your eye out for these homes - you can buy them for no more than a regular house so you'll be getting a nice subsidy from the builder.

Update:
Here's a thoughtful article asking whether "green" houses have to be ugly. The author is too kind to post actual photos of what she considers ugly brutes (a softness I don't share) but she's on to something. I like the looks of the green projects I've seen here in town, mostly, but ugliness is not going to help these things sell. I'll go look for examples with which to embarrass some people.

More good news!
According to some of my peers quoted in the Stamford Advocate, the federal bailout of Fannie Mae
will return sweetness and light to the housing market. I disagree, but never have I so wanted to be wrong.
Update:
Here's someone in Arizona who's being fed the same line and is similarly unimpressed.

Sign of the times?
Greenwich doesn't permit broker "for sale" signs but our Board of Realtors has just added a new category for listings: short sales, which are tedious, cumbersome proceedings that may permit a seller to sell his house for less than he owes. The new category serves as a heads up to buyers' reps that this isn't going to be an easy sale. For details on just how involved this is, see
this article from the Hartford Current.

Bargains?
I checked out
Realtec.com this morning and its site claims that there are 29 properties in Greenwich in "pre-foreclosure" mode. Now this just means that a notice of intent to foreclose has been filed on the land records, which is mostly an attempt to cut off more creditors from getting ahead of the lender. It does not necessarily mean that the property will be foreclosed and, historically, few Greenwich properties go so far. But these may be new times and some of the addresses: Perkins Road, Stanwich, Taconic, Buckfield Lane and the like could all offer some value. Depends on either the seller's willingness to get out early or the bank's desire to unload once they take title.

A ray of hope?
Maybe, but don't hold your breath. I've heard of several sellers who have accepted offers in the past few weeks but have not reported their houses as "under contract" because mortgage contingencies are taking longer to be met. So it's possible that last week's dismal performance (3 contracts all week, compared to 8-10 a day this time of year) can be explained and that we'll see the traditional surge of sales a few weeks later this year.
My personal feeling is that, while there are indeed buyers out there, they've been offering much less than the sellers are looking for and, so far, the sellers aren't bending. If the financial world collapses tomorrow, as seems possible given the seeming lack of progress resolving the Lehman mess, these sellers may regret their intransigence.

No good news here
A friend with reliable sources has given me very bad news concerning Sally O'Brien. I won't pass it along in the hope it's false but her friends might want to make inquiries.

A Home Run?
Local real estate columnists seem to think that the federal salvage of Fannie Mae is going to save our industry. I disagree. Look, people will always need housing and Greenwich will, at least until the School Board finishes destroying our educational system, continue to be an attractive place to live, so we're not going to see Fargo, North Dakota prices here in town - I hope. But the Fed's action is a huge admission that the mortgage business is in deep, deep trouble. One reader of this blog has commented (and if you're not reading the comments, you're missing much more wisdom than you'll find in these primary postings) that we have $11 trillion in mortgage liability outstanding and something like $600 BILLION (corrected by reader) backing it up. That's not encouraging. We'll all survive, and I continue to believe that buying a house now at the right price will prove a great investment a few years from now, but federal intervention in the lending market is a sign of desperate times, not a ray of sunshine; in my opinion.

By the way - it's been a while since I ticked off Franklin Bloomer, head of our Land Use Commission and chief of silliness for the Floor Area Ratio regulations. He wasn't pleased when I reported that he'd torn down his house in Riverside and replaced it with a Westy's self-storage center as reparation for denying Greenwich residents the use of their attics, and I just realized that he's still wrong, and still in office. So here's my vote for his well-deserved retirement. Perhaps he can start a hedge fund.

Hedge fund envy
This article is on the Times' most emailed list today so I suspect that there's a fair bit of schadenfreude floating around concerning the fate of hedge funders. I suppose the most truthful, and painful aspect of all this is that "hedgers" were supposed to be able to churn out profits regardless of market conditions because they were so much smarter than the rest of us and knew how to hedge their bets. Turns out, many of them were just Bozos on the bus, just like the rest of us. Phew! I can go back to being proud of my philosophy degree.

What happens to this project?
The Antares UST project is supposed to be fully leased and ahead of schedule, according to this press release. I wonder, though, whether the events of the past few weeks and events yet to come will cause some of those tenants to disappear. Regardless, this portion of the press release seems almost quaint, now:

"One Hundred West Putnam is another major victory in an already
distinguished Antares track record for creating massive real estate value in
their projects," said Bruce Mosler, Chairman and CEO of Cushman & Wakefield.
"C&W is excited to be working with Antares to bring more global leading
companies into their groundbreaking office development at Harbor Point on the
Stamford waterfront as C&W knows we can count on Antares to provide Class A +
buildings on schedule and on budget."

19 Dingletown
I haven't seen this listing that just came on today but it's on an acre of land, has a slate roof and looks pretty nice. It's priced at $2.495 million and was purchased 10 years ago for $1.6 million. That seems like a reasonable rate of appreciation - I hope I'm right. In any event, I congratulate the seller and the listing broker (Round Hill Partners) for acknowledging that this is not the market to shoot the moon.

Of this and that
The Google map feature I was playing with does seem to be slowing up the page loading, as several readers have observed. Plus, coincidentally or not, my iPhone has started crashing on the site since I added maps, so they'll be gone. You can always go to "Googlemaps.com" and type in the address yourself.

The posting about 77 Sheephill Road did not get disappeared - it just got bumped over to last week's postings, found to the right.

And how's this for a straight-forward warning from our government regarding Hurricane Ike?

LIFE THREATENING INUNDATION LIKELY! ALL NEIGHBORHOODS…AND POSSIBLY ENTIRE COASTAL COMMUNITIES…WILL BE INUNDATED DURING HIGH TIDE. PERSONS NOT HEEDING EVACUATION ORDERS IN SINGLE FAMILY ONE OR TWO STORY HOMES WILL FACE CERTAIN DEATH.

Yesterday, after this warning, The New York Times found a 46-year-old Galveston woman perched on a milk crate and sipping brandy. "It's just gonna be a lot of wind and rain" said she. Last words?

Hmmm
No one seems very cheery about Lehman's prospects. I'm taking no particular joy in their demise because I have friends who work for them or did until today and, friendship aside, these people and their peers in the financial industry have been driving the Greenwich real estate market. It's all very well for commentators to celebrate their demise but for those of us who wanted to sell houses to them, it's a bummer.

Along that line, did you know that only three single family homes went to contract this week? One, 7 Ginko Lane, priced at $1.150 million, went via bidding war. of the other two one was under a million and the other not much more.

Perhaps reflecting this, Mark Mariani has reduced his 11,000 sq. ft. spec house on Sabine Lane by 25% and it can now be yours for just $8.950 million. If your Shearson stock lost $2.8 million this week you can still buy this house and be right where you were.

Can we now, at last, close this case?
Rosenberg really was spy - his co-conspirator finally admits it.

Lehman's woes
I doubt that this firm's difficulties all stem from their commercial lending arm but whoever worked in that area certainly didn't help the parent stay strong. Case in point is Lehman's loan to Antares to buy those aging apartments in Byram. The purchase price worked out to something like $800,000 per unit which any real estate agent, if asked, would have said was crazy. So far as I know, they never asked.

My brother Gideon tells an illustrative story of receiving a late-night phone call from an investment bank client almost 20 years ago. The bank was considering buying a failed condo project in town and wanted Gideon's opinion on what they might sell for in a worst-case scenario. Gideon opined, the bank passed and someone else stepped in and lost their shirt. The bank that thought to ask Gideon (and presumably a few other Realtors) is still in business and doing well. So the lesson is, if you don't know what you're doing, ask someone who does.

What part of "restructuring" don't sellers understand?
I have been seeing some reasonably priced listings recently but I'm still struck on open house days how many sellers (or their agents) haven't noticed that we're undergoing a restructuring, downward, of prices. I won't list specific addresses here (it tends to upset owners) but there are a lot of houses out there that will still be for sale in the Spring unless they drop their price substantially. A good indication that you've over-priced your house? 12 showings and no offers. If that happens, take out your meat axe.

10 Cat Rock
So-so picture but terrific house
New listing at the entrance to Cat Rock Road (I realize that there are people who love that street but I personally prefer houses on it that are close to either end). This was built a year ago and it's beautifully done. Three floors, decent yard backing up to conservation land and lots of Count Rumford fireplaces (which are large and shallow and throw heat into a room, rather than sucking it out. Designed by Count Rumford who, because he was a Tory, had to flee to England where he made a living fixing smokey fireplaces). I think Ann Simpson has priced it well at $2.995 million but these days, who knows? It would certainly have sold at that price a year ago and I think it should today but I am not the market.

$13,000 to power 19 lightbulbs?
But the symbolism is priceless.

Lehman Tumbles
This is not good for Greenwich real estate, I fear.Watch it fall in real time here

Price reduction on Indian Head
I thought this house was priced well when it came on two weeks ago at $3.895 but the market being what it is, it's already dropped $300K. For its Indian Head Road location, that's pretty good. Disclosure: it is my brother Gideon's listing, and I can't say mean things about it or our Sunday family dinners will be awkward, but I really do like the house. As an aside, know that I will always disclose any personal interest I might have in a listing I discuss, so if I make no such mention, you can be certain that none exists. 23 Byram Terrace, for instance,mentioned below, is listed by Diane Dutcher, who is with Coldwell Banker in Old Greenwich.

23 Byram Terrace
Here's a nice house
At $1.495 million, this new house built by Dave Tilly is an excellent value. I hope that the address will support this price level because, if it does, it will encourage more builders to build like this. The house is super-insulated with soy-based foam, has a computerized HVAC system that should save the owner a pile of money in heating and cooling bills and is, all in all, a very attractive project. You can check out more photos here.

The fix is in?
It's not sexy and I suspect no one really cares,especially on this dismal anniversary of 9/11, but this Wall Street Journal editorial complains that certain investors are getting a free ride on the Fannie Mae bailout, courtesy, as usual, of us taxpayers.

With the weekend bailout, however, those investors can buy another vacation home, or three. On Monday, yield spread premiums on Fannie Mae subordinated debt maturing in 2011 plunged by three full percentage points to a bid of 3.50 points. Investing rarely gets better than this: Buy paper you know carries a higher risk but also a higher return, and then have Uncle Sugar eliminate that risk so you also make a windfall profit.

44 Riverside Avenue
This is a very nice house but you can reach out the back window and pat the roofs of trucks wizzing past on I-95. It last sold for $890 in 2005 (after initially asking $1.249) so the new sellers aren't asking for the moon here ($1.075) but, unless the highway has shifted north since they bought it, the problem remains.

Going for broke?
The same builder who brought new price records to East Elm Street for condominiums has listed a single family home at 110 E. Elm at $8.5 million. I'm dubious but if I had his business acumen I wouldn't be working at my advanced old age, so I wish him well and good luck.

10 Andrews Road
A reader inquired about the status of this listing and despite my vow to engage in nothing but happy talk for the next few days, I looked it up. Ooops! It came on asking $6.495 last year and sold this year for $4.850. Even at that, I think the builder was lucky, given the lack of yard and the odd layout of the place. But as I've said before, a lot of these drastic price reductions are not a reflection of a bad market but instead, a voice of reason answering ridiculously optimistic sellers' dreams.

Beauty is in the eye of the beholder

Someone just posted the following comment regarding the house on Sheephill Road:

Terrible location/neighborhood? Are you kidding? Convenient an close to everything, and quite a few houses around the corner on Riverside Lane were listed and/or have sold in this very same price range.

In five years, the whole street and neighborhood will look just like this house. Why beat up the owner for being first and smartest for having the vision to tear down an obsolete house?

I don't disagree, nor do I think that the Havemeyer Lane house I mentioned is a terrible buy. But the historical fact is that houses north of the Post Road in Riverside and Old Greenwich have never sold for what their neighbors to the south have. "Pioneers get arrows" one builder told me when he refused to buy property on the then-undeveloped Dialstone Lane. He saved his money but lost a great deal because the guy I did sell it to renovated and sold the first property on the street to exceed $1 million.

But if you're going to go where no one else dares to tread, be prepared to wait awhile before your judgment is confirmed.

Why are these men laughing?
Guess who took in the most money from Fannie Mae?
Top Recipients of Fannie Mae and Freddie Mac
Campaign Contributions, 1989-2008

Name
Office
Party/State
Total

1. Dodd, Christopher J
S
D-CT
$133,900

2. Kerry, John
S
D-MA
$111,000

3. Obama, Barack
S
D-IL
$105,849

4. Clinton, Hillary
S
D-NY
$75,550

According to our daily paper,
town lobstermen will be targeting terrorists. Great idea, if it gives the guys a place to moor their boats under the Mianus bridge but I seem to recall that the last time that bridge fell it was due to home-grown terrorists: a negligent state government and slip-shod inspection techniques.

Ignoring 100 years of fulsome editorials,
the NY Times fires 550 unionized workers

Because I think higher taxes will hurt the Greenwich real estate market
I'm reposting this from James Taranto's "Best of the Web column.

He'll Wreck the Economy Later

"Democrat Barack Obama says he would delay rescinding President Bush's tax cuts on wealthy Americans if he becomes the next president and the economy is in a recession, suggesting such an increase would further hurt the economy," the Associated Press reports:

So he's saying he wants to wait for any recession to pass, and then he'll hurt the economy?

Signs of life?
Not really - we're still woefully short on properties going to contract. yet there are some good buys out there. I've mentioned 26 Summit Road, at $2.195, and, now that it's come down $1.1 million (to $3.3), 74 Zaccheus Mead Lane is very attractive. One property that did go to contract today was 18 Orchard Hill Lane, for what I assume (because it went so quickly) was close to or at its asking price of $1.895. This was no doubt a land sale, with 2.75 acres in a 2 acre zone with a good location off Mayfair Lane, but it's nice to see any builder still active. Most are huddling on the sidelines, waiting to see what happens. Tomorrow, I'll try to post on more bargains. They really do exist and two years from now, you'll thank me for pointing them out.

View Larger Map

Fraud at Fannie Mae - who'd a thunk it?
Try this for a good discussion of what's going on at our newly acquired lending institution. It all reminds me of the Savings and Loan collapse. A friend of mine was hired by the government to examine the loan files of several failed banks. He found literally file cabinets full of fraudulent loans but was basically told, "forget it - prosecuting these guys is so yesterday". Our regulators just wanted to close things up and move on and that's what they did. The rotten bankers probably moved on to Fannie Mae.

39 Boulder Brook
What's a house worth?
You can't tell from this listing.It was priced at $8.595 million when first listed in April 2008 and today was reduced to $5.298. This kind of thing does not instill confidence in buyers, in either Realtors' acumen or the stability of the market.
As an aside, some other new construction on the same street, #33, was priced at $6.875 when it came on this past February and still sits unsold today at $6.575. At least someone's sticking to his guns but 33's failure to sell kind of hints at what I and the marketplace think of #39's original price.

So I was in a lovely house today and in one of the boy's bedrooms I saw this:

and this

and this:



I'm hardly the model for perfect parenthood but I'll bet that if this kid's parents had dumped the TV from his room and placed some books in that bookcase his SAT preparations would be easier. Just a suggestion.

Google Maps
How cool is this? I searched for 'adding Google maps to my blog" and got this:

Can I embed Google Maps into my website or blog?


Absolutely. You can embed a simple map, a set of driving directions, a local search, or maps created by other users. Here's how:

1. Ensure that the map you'd like to embed appears in the current map display.
2. Click "Link to this page" in the top-right corner of the map.
3. In the box that pops up, copy the HTML under "Paste HTML to embed in website," and paste it into the source code of your website or blog.

If you'd like to adjust the size of the map before you embed it, just click "Customize and preview embedded map," select your preferred size, and take a look at the preview map. Once you're happy with what you see, copy the HTML that appears in the box at the bottom of the window.

Once I figure out what "the source code of your blog" means, I'll try it.

View Larger Map

Well it works, sort of, except I lost the marker indicating 44 Locust Road and the size has to be smaller. Still, progress is being made.
Here's Grahampton/Meadowcroft. Let's see if this works.

View Larger Map

Sell your house
17 Mark's Road in Riverside was bought for $2.495 million in July '06. The new owner attempted to resell it this year and, I think wisely, kept the price right around where he'd come in and in fact had reduced it below that point, to $2.45 million when the listing expired at the end of August. Now it's back, asking $2.495, exactly where he bought it. My guess is that he is going to discover that the market has dropped. It's a very nice, somewhat quirky house on the same tidal creek I live on so naturally, I like the place. And as a neighbor, I naturally hope he'll get everything he's asking, and more. But ...

173 Stanwich has also seen some price reduction, dropping in the past 18 months from $3.595 all the way to $2.495 today. The mistake here, if I may be so bold as to offer my opinion, is that the owner tarted the place up with all sorts of high-tech wizardry and thought that would justify a wacky price. It obviously didn't.

And finally, there's 48 Locust, way up in our Northwest corner (a reader has suggested I link to Google maps, which is an excellent idea - I'll see what I can do right after posting this). The seller bought it for $2.398 back in October 2005 and re-listed it for $2.950 in March 2007. No improvements that I'm aware of. He dropped the price to $2.750 a month later and has stuck at that price ever since. If he really wants to sell it, I think the market has a message for him. Just saying ....

440 Round Hill
Marc Weill's house finally sold yesterday for $11 million. That's a big chunk of change but quite a comedown from its original asking price (5 years ago)of $21.5 million. I don't interpret this sale as evidence that the market is collapsing; the original price was just dumb.

1 Meadowcroft
Got the grand tour on 37 Grahampton/ 1 Meadowcroft today. Understand that I'm not a fan of houses this size so my comments are not purely objective. It's certainly big, and there's a huge cellar filled with all the wine racks, media rooms and toys that today's adults seem to want. Large kitchen with some kind of granite thing going on - it's too high to be a food preparation surface, and too wide to reach even to its middle, so I'm uncertain what purpose it serves. I asked the agent, "what's this?" and was told, "granite". That I already knew.
Lots of big bedrooms, thick doors, big baths, everything you'd expect, I suppose. Mariani builds a nice house and this one is no exception. I would quibble with its approach, however. You can't tell from the artist's rendering posted here but it's a very short jog from the street to the house; turn off Meadowcroft and bang! There's the house. If I had an ego large enough to accommodate buying this house I'd want a long winding drive so that my visitors would think, "wow, this guy's made it!". You'll have to find other ways to impress them. Nice flat back yard, if anyone still uses them. And a pool.
Are there buyers out there for this size house? We'll see.

Put on your tinfoil hats!
Okay, they're tired of dumb f***s like us who don't believe in global warming so now they're going to
use more persuasive methods.

Armed with new research into what makes some people environmentally conscious and others less so, the 148,000-member American Psychological Association is stepping up efforts to foster a broader sense of eco-sensitivity that the group believes will translate into more public action to protect the planet.

“We know how to change behavior and attitudes. That is what we do,” says Yale University psychologist Alan Kazdin, association president. “We know what messages will work and what will not.”

17 Meadowcroft
Old vs new?
A reader points out that this beautiful place on 8 acres didn't sell when priced at $16.8 million for the past two years and thus wonders whether Mr. Mariani's new venture will fare better. Good question and one only time will answer but there are definitely two different markets for huge houses: old and new, so this one's failure does not necessarily portend the same fate for #1.
But then again ....

74 Zaccheus Mead
Under "new listings" comes this reduction (albeit with a new broker). It didn't sell last year at $4.395 million so now it's back with a fresh new price of $3.3 million. Zaccheus is a good location and a $1.1 million dollar price chop isn't so bad, either.

Location, location
This house on Havemeyer tried breaking the $2 million price barrier ($2.1 million, in fact). It didn't and now is at $1.795. Getting there, but Havemeyer remains a busy road and the new development across the street won't help.

Master Baths
So far, most readers responding to the poll (that's over to your right, see it?) consider a tub in the master bedroom to be either "essential" or at least "nice to have". Builders take notice.

This might work
RealEstate.com is teaming up with AT&T so buyers can search for properties on their cellphones. A decent idea, but perhaps AT&T picked the wrong partner. I've never used the site but I just checked it now and it tells me that there are no properties for sale in Greenwich for $15 million or above. Mr. Mariani will be disappointed to learn that.

I wonder if we can get the Greenwich Board of Realtors to try this for our town?
In this slow real estate market, we need all the buyers we can get. If this Alabama group's offer of hard cash works Group offers Jews $50,000 to move to town we could try the same thing for lots of ethnic groups - French Huguenots, for instance (just in case, I'll be reverting back to "de la Fontaine" - it was the British who made us change it, anyway).

Barbarians at the Gates
I just tried emailing my friend David Ayres at Sotheby's and was informed that I'd been blocked by that firm's spam-buster. Should I take this personally? Must I stop saying mean things about Sotheby's parent, Realogy? Inquiring minds want to know.
(By the way, the image above was lifted from a good article on libertarianism - if you're tired of reading about Sarah Palin's eyeglasses,
try this.)

Hurricane Ike Slams into Cuba Dr. Jeff Masters reports:

Cuba is taking a terrible beating from Hurricane Ike, which crashed ashore in eastern Cuba last night as a Category 3 hurricane with 120 mph winds. Ike's winds have since weakened to Category 2 strength--100 mph--but are still strong enough to destroy the Cuba's electrical system and heavily damage the cities it encounters along the heavily populated east-central portion of the country. Damage will be heavy in Camaguey, which reported sustained winds of 49 mph at 8am EDT as Ike passed 20 miles to the south. Baracoa, on the coast to the southeast of where Ike made landfall, suffered a significant storm surge, topped by high battering waves, that damaged or destroyed 1,000 buildings. Ike's winds and rains of 6-12 inches will cause additional heavy losses to Cuban agriculture, and the storm should easily rank as one of the top-five most damaging storms in Cuban history. Ike is expected to track over Havana Tuesday morning, and the city's 2.2 million people can expect significant damage to the many poorly-built structures in the capital city. It will take Cuba a long time to recover from Ike.

Cuba, like Burma, doesn't want our help which is probably okay - Ike has now crossed Cuba and is again over (warm) water,picking up strength and headed for Texas, so we'll need the money.

You want a bargain? Here's a bargain.
I think so,anyway. 26 Summit Road in Riverside. New construction originally asking $2.495, which didn't seem at all a stupid price, is now down to $2.195 million. Decent house, decent yard and, for those who buy their houses like they buy their groceries, $510 per square foot.

If at first you don't succeed...
15 Sidney Lanier Lane first went on the market in May 2006 asking $7.8 million. It didn't sell even though it was eventually reduced to $6.2 million and was taken off the market a year later. Now it's back, asking $6.595. Good luck.

Testing the waters
Mark Mariani has just listed new construction at 37 Grahampton Lane for $15 million dollars. It's a good looking house (I'll post a picture tomorrow) and Mariani is a quality contractor so if anything should go in that price range, this one should. But what's the market for 15,000 sq. ft homes these days? I guess we'll see. I would never dare question this very successful builder's business sense but by my count this makes three spec houses he has on the market, each over $10 million. He obviously has nerves of steel.