The end of my air travel
I thought this idea (electric shock bracelets for all airline pasengers, in case the link doesn't work) was a joke. But at Homeland Security, there is no laughing, ever.
http://www.washingtontimes.com/weblogs/aviation-security/2008/Jul/01/want-some-torture-with-your-peanuts/

Market Timing
One reader points out that, if prices are likely to continue falling for the next year or two so it's better to sell now, than then. Another asks the entirely sensible question, so is this not the time to buy? The best answer I can give is, "who the hell knows?". If you want to sell your existing house and buy another, you might as well do it now. If you don't have a house to sell, waiting a year could yield some financial benefits. But people go broke trying to time their Wall Street investments and you could hurt yourself trying the same thing in real estate. What I've always suggested to my clients is that they look at a house as a place to raise a family and find shelter from the storm. If you want or need a new house and find one you like go ahead and buy it now. Prices have dropped and most (many, anyway) sellers are realistically flexible. If you don't need a new house right now, you might want to wait to see what happens over the next year. One caveat: the home lending market seems to be falling apart and, a year from now, you might find it much harder to obtain a mortgage.

Daily Rant
I heard a perfectly rational-sounding fellow on Connecticut NPR yesterday discussing all the wonderful new energy sources that will power our state and, by extension (pun intended) our country. Wind, solar, electric cars, you name it, it will all be along soon to keep us warm and scurrying about. In the meantime, of course, there must be no new production of energy sources from "old" technology, such as coal, oil or natural gas. I look forward to the day when we can tell our Arab friends to pound sand but experts like the one on NPR never address one basic question: how is all this great stuff going to be delivered to our state and who will tolerate (and pay for) the necessary infrastructure?
Connecticut has fought, and defeated,mostly, every effort to bring more energy here. We don't want gas pipelines running across our fields or Long Island Sound; no new transmission lines, anywhere, no liquid gas barges six miles out and, of course, no nukes! So okay: somewhere in Texas, they're planning a million acre plus solar energy installation. Good for Texas, but that leaves us in the dark. Plug-in electrical cars would be wonderful, but where is the electricity to charge them?

In South Africa, gold mines are shut down, bakeries are closed, schools are operating in the dark because of periodic, daily blackouts that come and go at unpredictable times. The country's leader admits that there have been warnings of exactly this happening for the past 11 years, but the country found other uses for its limited funds. Now those funds are even more limited, because gold mining was a huge source of income.

The folks in charge of predicting the Washington D.C. - Baltimore region's energy needs - not mouthpieces for the energy industry but honest-to-God citizens - said last week that in less than 3 years the region can expect the same sort of blackouts now afflicting South Africa because no one will even begin to consider a permitting process to bring in more electricity from the west. We're not talking about the actual location of such transmission lines-that's whole'nother fight - just the concept itself-a beginning of a discussion. I can only hope that Washington goes dark and its politicians go home but the howling from down there will certainly reach us here in Connecticut, especially because our own TVs and radios will have shut down,I-95 will be traffic free, and we'll all be living in blissful buccolic quiet.

Go have a talk with a Green and ask them how they propose to power the country. They'll tell you of the wonder of wind farms, ignoring the fact that the wind don't always blow and Teddy Kennedy and his ilk won't let them be located anywhere nearby. They like the idea of hydrogen cells and ignore the sad fact that to make hydrogen you'll need some form of energy, perhaps from those non-existant wind farms. They're happy to tell you what they don't want: no more oil drilling, either offshore or onshore, no Canadian oil from the oil sands and again, no coal, no nukes, no gas - it only encourages Big Oil and encourages them to keep up their evil ways. Biofuel is turning into an embarrassing mess (as predicted in this column repeatedly over the years)but something is bound to turn up, just in time - wait and see (I actually heard a caller complain yesterday that Detroit has sat on a super-secret engine that yields 120 mpg for 30 years, just to force Detroit's customers to pay more for gas. That same rumor has been around all of my life and, according to my mother, at least since 1930, so I guess it must be true). Greens believe in pixie dust and fairy magic and what's scary is that they seem to be prevailing. I don't much care that 53%of Americans believe that the US government attacked the World Trade Center on 9/11 and a larger percentage think Elvis is alive but when that same horde shuts down our economy's engines, there will be hell to pay and we're all going to be forced to make that payment.

More on pricing per square foot
A reader asks (see comments) "So land is not a variable in the square foot method? Where does it fit it, or is it added as a premium to the overall price?" Not quite, but when I'm using the method as a rough tool for measuring value, I just lump the land value into the total asking price and see what turns up. Again, though, you have to be sure you're comparing apples to apples. For instance, a building lot in Havemeyer that would support a 4,000 sq.ft. house might sell for $750,000 (sad news for Havemeyer residents who a few years ago might have expected as much as $900-$950K, but that's what's happening). A similar lot in Riverside, south of the Post Road on a decent street might sell for $1,350,000. That's a land cost of $187.50 per sq. ft. for the former, $337.50 psf for the latter. Assuming (dreaming, perhaps) that you could sell that Havemeyer new construction for $2,000,000, total cost for a 4,000 sq.ft. house would be $500 per sq. ft., including the land value and a $2,750,000 house of the same size in Riverside (ignoring the fact that buyers of new construction in Riverside prefer 5,000 sq.ft. and up) would cost $687 per sq.ft. for what I am assuming is the identically-constructed and finished house. So land value does play a role, but if you're comparing two new houses in Havemeyer or two new houses in Riverside, you can (sort of) ignore the land value.

But builders don't.I've seen houses in Havemeyer priced at $950,000 being pitched as ideal building sites. The math won't work for a builder. Figure $200 per square foot construction costs and $100,000 soft costs - interest, lawyers fees even, God bless them, real estate commissions - that's $900,000. Add $950,000 in land cost and the builder's up to $1,850,000 before he even tries to sell his project for that hypothetical $2,000,000. Consider the likelihood that he'll have to sell for less than he's asking in this market, and he's risking a huge sum for a small gain. So, not surprisingly, land values are dropping. Not to nothing,but dropping all the same. My advice for now is, if you aren't in a rush to sell, postpone.

June Inventory
Courtesy of my friend John Cooke, here are the latest numbers for our June inventory of single family homes (click on the image and it should enlarge for easy reading - hope you're as impressed as i am that I figured out how to upload this as a jpeg).

Look at the homes between $7,000,000 - $8,000,000. Up 128%. If I were a mansion seller, new or old, I'd be nervous. In fact, anything priced over $4,000,000 would have me checking my bank's lending policies.

Price per square foot
A reader asked me to comment on this method of valuing a house and I'm happy to do so. When I went house hunting in Boulder CO a few years ago I discovered (a) that land use laws have driven prices way above even Greenwich and (b) new houses are sold by the square foot. My Realtor showed me various developments on the plains (the hills of Boulder itself are long since built out) and described them as "$200 per square ft. houses", or "$400 psf houses". and so on. Worked for me, but here in Greenwich, it's not so easy.
Some of the problems with using the method here are the variables. A house north of the Post Road in Riverside or Old Greenwich will obviously not command the same price as one south of that road, so the land value will be less, the builder, if he's smart, won't put the same finishes into the house, etc. Still, withing a discrete neighborhood, and adjusting for precise location, it's not a bad tool. But watch out for builders' calculations of square footage, because some add the basement to that measurement while others do not. Finished or not, a basement just isn't worth the same as finished space above grade. I work with a client, Greenwich Construction Company (just in the way of full disclosure here) who never includes the basement space in the square footage calculation. They (and I - remember the above disclosure) sold 4 new houses in Riverside last year for between $635 and $675 psf. That's up quite a bit from a few years ago, when I did a survey of new homes sold in Riverside and found an average price of $565. Unsold new houses at that time averaged $665 and never did sell until they dropped below $600. We've seen some big increases in land and building material costs since then, so that probably accounts for the jump.

It's tougher to use this method on existing houses but, with the possible exception of Conyer's farm or high end direct waterfront like Meade Point or Field Point Circle, any house asking more than $1,000 psf is usually doomed to sit for a long, long time. This is not a widely-known fact, judging from some of the prices I see out there.

Any builder knows his numbers and they all use pretty much the same figures. Land is "X", and varies with location and size, but basic constrution costs are about the same - the huge differences come when finishes are selected. Buyers all want granite counter tops (why?), Sub-zero appliances why again?) and so forth, but add a mahagonny panelled library and such and you start piling up the money. Your choice of either a slate,cedar or asphalt shingle roof can easily make a $100,000 difference, and that's before you've added those copper gutters and downspouts.

All that said, it is indeed possible, and not at all foolish, to take a selection of comparable houses, divide their square footage by their asking price and see which is the better value. So long as you make certain you're not including one building's basement and not the other's, you'll end up with a useful gauge. Of course, it helps if you like the house, too.

Fireworks!
I wasn't going to attend the Binney Park fireworks Saturday night but I remembered that it's been Chip Kreuger's Greenwich Capital that's funded these shows for the past decade and Chip sold his company to a Scottish bank last year who, in turn, isn't having such a great year this year. It might be a long time before we see such corporate largess again, so off I went. Not a bad show and enhanced by the presence nearby of two small boys going "oooo, ahhhh!" after almost every explosion. I'm way too coll at my age to express such sentiments, but I was right there with them. The grand finale was the best in my memory so, all in all, a good 1/2 hour well spent. I just hope it can continue - the old funding model of volunteers with fishing nets soliciting contributions during the Memorial Day parade stopped working long ago, which is why Kreuger stepped in. Thanks are due.

Ada's
Ada Cantavero, who ran a little candy store in Riverside forever, has finally died at 88. Funny, but Ada seemed ancient in 1960, when I was just 7, and then seemed to stop aging. When my brother Gideon called with the sad news my first question was, "how old was she?" "104", he replied, and I actually believed him. But she was great.

When I was a kid, penny candy really cost a penny and there was nothing worse than being stuck behind some rich kid with a buck to spend, calling out his selections one by one. Most of us had a nickle or maybe a dime to spare, so the line usually moved quickly, but if I bear any resentment toward the rich, it probably originated here.

Ada would let us hang out on her front porch but any misbehavior risked at least a temporary banishment, a terrible threat that kept us in line. When kids had trouble at home - a divorce, drunken dad, whatever - she'd comfort them and cheer them up and provide a refuge. A heck of a woman and one who seemed to remember all of her kids, no matter how much time passed. I stopped by maybe five years ago to say hello 25-30 years since my last visit and she greeted me, "Hi, Bobby!". Bob is my older brother, but the fact that she could place me in the right family was amazing. Riverside has lost a wonderful institution.

More on moderate housing
Something many of us don't know (I certainly didn't, anyway) is that what used to be called an "elderly conversion unit" - a separate apartment with kitchen - and which could be built and occupied only if at least one of the occupants of either the main house or the apartment was over 62, was changed to the term "accessory housing" and now permits occupancy by tenants of "moderate income". I don't know what the income guidelines are for this exception (it's adjusted from time to time) nor whether it applies, as does the age requirement, to either the main house or just the apartment, but a call to the Zoning Board (call Town Hall at 622-7700 and ask for Zoning or go to the town's website and enter "accessory housing" into the search feature) will answer those questions. Yes, I'm still working on links here - a new project I'm involved with may soon provide an entire website entirely devoted to Greenwich news, opinion, neighborhood association news, etc., so if I'm going to be changing formats, ...) In any event, from what I'm told, teachers, firefighters or policemen would probably qualify as moderate income. Any one of those groups could provide a nice pool of good tenants. You could make some decent money, have live-in security and know that you're doing your small part to provide additional housing in Greenwich, all with the town's blessing. Not a bad deal.

Price Drop?
One of our commentators asks, "is a house that was worth $7,500,000 last year now worth $6,500,000? Certainly not in the case of the Thunder Mountain Road house I mentioned yesterday. In that case, the house was never worth $7,500,000, it was just an imaginary figure dreamed up and reported by a broker trying to protect its client's other project on the same road. Although, it must be said, the average price has dropped 14% this year and that would neatly place a $7,500,000 house at $6,450,000 so perhaps the argument can be made. My point about Thunder Mountain Road is that, since there never was a genuine sale at the reported price, it's impossible to tell. Certainly, if you bought a house last year and want to sell it today, brace yourself for some bad news. If you bought before 2000, relax and enjoy your sizeable gain. Anything in between, it's a guessing game, but it could get ugly out there.

580 Lake Avenue

This house came on the market in January 2006 asking $5,550,000. 2 1/2 years later, it sold yesterday for $2,685,000. I continue to be amazed at how wrong some prices can be.

Foreclosure in Greenwich
There's an interesting comment below on affordable housing, with several good ideas on how me might address the problem, if we must. One idea that probably won't work, however, is buying foreclosed houses. In Greenwich they're rare - perhaps two a year. But last Saturday, a house on Round Hill Road did pass via foreclosure. Seven plus acres, some wetlands but, all in all, beautiful land. According to a reporter friend of mine, almost no one showed up: two couples who were apparently under the delusion that they could pick up a Round Hill property for a couple of hundred thousand dollars and a representative of the bank, there to make sure that the lender's $3.9 debt was covered. So it sold for $3,900,000 to the bank, and will presumably be returned to the market soon. It wasn't that long ago that seven acres of Round Hill land (there is a house on the property but not for long, I suspect) for just under $4,000,000 would have drawn the interest of any number of spec builders. Not today.

How Not To Sell a House
A house in "the Golden Triangle" of Greenwich came on the market just this spring asking $6,950,000, a ridiculous price for a house on 0.6 of an acre in a 1 acre zone - no room for expansion, among other problems. It didn't sell - there's a surprise - and there followed a rapid series of reductions all the way down to $3,695,000, still pretty strong for this neighborhood and this house, but at least some sort of reality seeped in. But that initial price killed it I think - we agents see it, dismiss it, and forget it exists. At that point, we don't follow its reductions, we just move on to another house with a more realistic owner. It's now been withdrawn from the market. We'll see what price it reappears at, if it does. I'm just speculating here, but this misadventure has the earmarks of an overly optimistic owner, rather than a deluded broker - a broker/agent would have kept the high price going for far longer, if only to justify his original opinion. But it points out the danger of taking over-priced listings just to get the listing (we're all tempted by the reasoning that "if I don't take it, someone else will"). It's just a waste of time and money and, since I stopped succumbing to that temptation, I now enjoy a certain amount of schadenfreude when passing houses I rejected sitting forlornly on the market, forever.

To tell the truth
I got in trouble last fall when I took on a local real estate firm for falsely reporting a house on Thunder Mountain as "sold" for $7,500,000 (or somehere close to that figure) when in fact it sold, unfinished, for less than half that sum. The agngry brokerage firm (Greenwich Fine Properties, in fact - isn't it fun not to have to worry about annoying advertisers anymore?) yanked all its advertising from my paper and explained that the larger price was what the builder estimated the value would have been had it actually been finished. Well his project next door, pretty much identical to the first one, just sold Friday for $6,495,000. Not a bad price at all, but if a selling broker had used the $7,500,000 price as a comp, she would have cost her buyer a million dollars. And wouldn't she have looked stupid?

Affordable Housing
It's back in the news again. Greewnich, under state law, must provide a certain number of affordable housing units for its population. Not surprisingly, in a town where a single building lot can easily cost $1,000,000, we're not in compliance. The latest plan to add a couple of hundred units (elderly and moderate income) in Byram has met fierce resistance from that neighborhood and, I suppose that if those same units were proposed for Riverside, I'd howl too. But where else can we build? Someone suggested highrise apartments in the back country which, while amusing to contemplate (perhaps just off Round Hill Club's 18th hole?) isn't going to fly. I'd suggest that we forget the whole thing but again, there's a state law in the way, which can basically override our zoning regulations and force construction anywhere a developer likes (again, wouldn't it be fun to see moderate income folks belly up to the bar at the Round Hill Club?) McKinney Terrace and Quarry Knoll, properties already owned by the town, have the space, if not the local good will, to accommodate a large number of additional units - I can't think of another area that does, withe possible exception of the idea being floated for building a high rise on stilts above the Island beach parking lot. Heck, they'd do that in New York, but I suspect that the cost would be way beyond our means. Intriguing idea, though.

But why is our housing so expensive?
There's not enough land, obviously, but we can also look to our restrictive zoning regulations. I recently read that an economics professor in Seattle examined the rise in average Seattle area house prices from $230,000 to $460,000 and concluded that $200,000 of that rise was directly attributable to the strict zoning rules imposed by the city - lot size, house size, etc. The professor happened to be a proponant of those regulations and wasn't advocating their repeal; he was just monetarizing their cost. Life is full of choices. I, for one, would prefer that Greenwich not become the next Riverdale, but I wonder how long we can insist on minimum lot sizes and low height restrictions before we run afoul of our friends in Hartford. Vote Republican, is my advice.

June 27th
Some houses are selling, even at (especially at) the higher price ranges, by which I mean $11,000,000 - $7,000,000. I notice though that of the 10 sales reported yesterday all but one had sat on the market for 12-18 months, and almost all sold for substantially less than their original asking price. Hmmm there may be a lesson there. One exception: 56 Rockwood Lane, a teardown on a nice street, was listed May 12 of this year for $2,250,000 and went to contract May 20th. It sold yesterday for $2,610,000, showing that (a) you can still generate a bidding war if you price things right and (b)you can't underprice your house, even in this market. If you undershoot the right price, there are still buyers out there willing to correct your "mistake" or your smart move. Forget Casey Kasin and don't reach for the stars.

Okay, so I've been remiss
I'm in the middle of what promises to be an exciting (to me, at any rate) new website with a number of webdesigners, columnists, reporters and editors (the free time of all of whom has been blessedly freed up by the ever-increasing rapidity of newspaper cut-backs, and blogging has been none-existent. Details forthcoming soon, but, if there are still any readers out there for this blog, here's some information you probably already knew: the market is in the tank.

A handful of houses have gone to contract in the past 21 days, some at impressive prices, but the trend is dismal. 215 house price reductions, some by millions of dolllars, vs. 44 contracts. Interestingly, and as a sign that sellers new to the market still don't get it, 205 new listings have come to market in that same period and, to my eye, the vast majority are grossly (which I define as in excess of 10% of their eventual selling price) over-priced. I've finally gotten smart and started refusing over-priced listings - why waste time and money marketing them when they aren't going anywhere? There are still agents out there who will take a listing, any listing, at any price. One house I turned down because I valued it at $1,495,000 to, in their dreams, $1,695,000, was just listed by another agent at $2,000,000. That's just crazy, and I want no part of it. A house I mentioned in an earlier column as insanely priced at $6,000,000 finally went to contract somewhere in the $3,000,000s. That agent spent over a year holding open houses, paying for full-sized ads and showing the damn thing when the only thing that was ever going to work was getting the price to its proper level. Buyers aren't stupid and in fact, they're growing more stubborn every day, no doubt because they go home each night and read more scary headlines about the housing market. We're not in a free fall, but if ever there was a time to aggressively price your house, this ain't it.

UBS Leaving Town?
That's the rumor that's reported in today's daily and if it's true (or even if the prediction of a 500 employee layoff s true), it doesn't bode well for our immediate future. Lots of the support staff for UBS probably lives in Shelton and points north, but a lot of the higher level folks bought homes in Greenwich. Just what we need: more inventory.

Thanks for your comments
lots of you have written in support and I appreciate your words greatly. My poor Internet guru is temporarily out of action due to a motorcycle accident ( I knew I made the right decision to sell mine in 1972) but I hope to have a real web site up and running in 2 weeks. In the meantime, here's my response to an inquiry about the weight to give to the town's assessment of a home's value: it depends. Some of these assessments are spot on; others miss by a mile. Some years ago, my own house was grossly over-assessed because the out-of-town appraisors considered all waterfront, tidal creeks to Belle Haven, to be of equal value. Don't tell them so, but I think they've over corrected and I'm now valued at less than a modest home on Perry Ridge. So use the assessment as one datum, not the sole determinative of value.

Memorial Day Parade in Old Greenwich
10: 00 am. Last vestige of small town America in this town, and a chance to thank our soldiers. Don't miss it.

We're on Mars!
pretty nifty. I stand in awe of people who can shoot a rocket 400 million miles into space, land it safely and begin exploring.

But as for another use of our tax dollars...
the New York Times reports today that states are chafing at having to spend anti-terrorism funds on, ah, anti-terrorism. Rhode Island, for instance, was outraged that the heavy truck it purchased to pull a horse trailor was initially denied funding (the state prevailed, naturally, after intervention by its pols). We taxpayers are paying $23 billion for this program-if the states don't need the money, why not end it? Silly question, I know.

More Market Blues, or, Apples to Apples
1 Brookside Park in Greenwich came on the market in May 2006 asking $4,895,000 and sold in November for $4,250,000. Whether because of buyer's remorse or a change in circumstances it was returned to the market by the new buyers in February, 2007, for $4,650,000 (nothing having been added or changed), lingered for 408 days and finally sold this past May 12th for $3,800,000. Rumor has it that the owners turned down an offer that would have brought them close to break-even and then ended up sitting on the place for another year. True or not, in this market, it probably pays to keep would-be-buyers talking.