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

Tips for sellers
I don't have many, alas. The Wall Street Journal ran an article recently on just this subject (not worth linking to, as it's subscription only) and it had eight or nine tips that we Realtors have been preaching for years. Clear out the clutter, paint to refresh, fix as many defects as practical, don't spend a whole lot on major renovations and, above all, don't over-price your house. The author said that, depending on where you live, expect to sell your house for as little as 50% of what it was worth in 2003. The situation is not that bad in Greenwich, but I recently had, then lost (thank God) a listing that was hugely over-priced by its owner. He took what he'd paid for it three years before, calculated a 7% annual appreciation, added up the money he'd spent on renovations, threw in commissions and taxes and announced his price. Despite my warning that the market no longer supports that kind of financial "thinking" he insisted, then became furious when we had no - literally no - showings in 3 months. He insisted on being released half way through his six month listing contract and I was glad to let him go. The new agent, four months on, has yet to sell it, despite a modest price reduction.

One reader urges me to "think outside the box" and come up with ideas for sellers, aside from pricing a house properly. Unfortunately, there is nothing I know of that will overcome a bad price. I've seen cruises, increased commissions and huge bonuses offered to any agent who brings in a buyer, but aside from ethical concerns (how can I claim to represent a buyer and then recommend an over-priced house because I can earn a Caribbean junket?) I don't think they work. Neither do classical piano players at broker or public open houses, clowns handing out lottery tickets or painting a house day glow orange.

I do believe in decluttering a house, and I mean a severe cleansing of all or almost all of the objects that make your house personal to you: family portraits, kids art on the refrigerator, that nude of your wife hanging in the bedroom (I've seen two of those) etc. Once you decide to sell your house, remove your personality from it to make room for a potential buyer to envision herself living in it. That's hard to do when she's tripping over 4,000 stuffed toys in the playroom. If you don't believe me, take a tip from David Ogilvy. I have an occasional difference of opinion with David on his initial pricing decisions, but you will never see an Ogilvy listing that isn't neat, pristine and in move-in condition. It's a technique that's worked well for David over the decades and it will work for you, too.

But price it right. If you think you've done so, and no one's making offers, you were wrong and you should lower the price, immediately.

460 North Street
This mansion, across from St. Michael Church, is an outstanding old mansion whose original grounds have been sliced down to just under 4 acres. It last came on the market in April '03 asking $12,500. I was pretty new to this business then so when the cop directing traffic asked me as I was leaving,"what's it going to sell for?" I had no hesitation replying, "at least three million less than they're asking". I was wrong: 18 months later it finally sold for $4,000,000 less but, to be fair to myself, that extra million dollar wallop might have been caused by sitting on the market so long.
In any event, it's back on the market now, after what its agent claims was "a total renovation", for $11,950,000. That may still be too high - I haven't seen the scope of the renovations, but it's interesting to see the drop in expectations from 2003 to now.

Taking a different approach, the owner of 101 Dingletown Road put his house up for sale in June of this year at $5,785,000. Finding no takers he raised his price three weeks later to $5,995,000 and, when that still didn't work, raised it again yesterday to $6,395,000. I have never seen this loony strategy work, so look for this house next year at $12,500,000. It will still be for sale.

Update
I had a chance to tour 460 North Street this morning and I was impressed. The "total renovation", a term used with alarming flexibility by some Realtors, was indeed thorough; the custom, leaded glass thermopane windows, for instance, cost over $1M according to the broker, and I believe him. New roof, new kitchen, new baths, new HVAC, etc., all combine to make this house worth at close to its asking price and certainly closer than it was under its previous owners in 2003. I like its proximity to town and because it's set way back from the street, road noise seemed neglible. Neither I nor any of my customers have this kind of money, darn it, but I can only hope someone still does and is willing to spend it in this market. In past years, this house would go in a heartbeat. It may take longer now.

School test scores drop.

Greenwich 10 th graders seem to be doing as poorly on math, science and reading scores as their counterparts in other parts of the state, which baffles me. We're a town comprised of, in the main, well educated parents with an abiding interest in the academic success of their children. I can understand why a kid in Hartford, with a single, drug addicted mother and a slum as living quarters might not be able to read at grade level, but Greenwich? We spend more per pupil than any other school district (with the possible exception of Hartford) for poor results. Why? And what's going wrong in our schools? Even if you, like me, have no children in school, this issue affects your pocketbook - real estate values are hugely dependent on the quality of public education. I doubt we need to spend still more money on the issue, but we ought to find out why the dollars we are spending achieve so little.

Update
A comment below takes me to task for writing about slum kids in Hartford. I, too have at least a little experience trying to teach such kids; in 1969, as a high school student, I tutored a young man in Trenton at his house which I think fairly could be described as a slum. Our tutoring sessions were constantly interrupted by his noisy siblings - they had no other room to play in - while his very young mother, clearly on some kind of drug, snoozed in the corner. Far from denegrating kids like that, I was attempting to cut them some slack. Maybe that's the "soft bigotry of low expectations" but I contrast that student, eager to learn despite his living conditions, with spoiled Greenwich kids and conclude that our kids, at least, have no excuse for not learning.

Trees
Once again, according to Greenwich Time, our town officials, including a so-called Republican, Peter Crumbine, are nosing around a proposal to regulate the cutting of trees on private property.

"Republican Selectman Peter Crumbine asked Tree Warden Bruce Spaman if he could consider adopting a similar ordinance curbing the removal of trees on private property.
"There is a lot of interest in the community and concern about a great deal of clear cutting in town," Crumbine said. "Are you considering what you can or can't do about that?"
Spaman said while the town doesn't currently regulate the removal of trees on private property, some towns have adopted restrictions limiting removal of trees on private land successfully.
"I expect that to be the other shoe to drop," Spaman said.

Look - I like trees, and even have a few of them on my own property, providing shade, a home for squirrels and all sorts of ecologically-friendly benefits. But the typical Greenwich homestead is cluttered with the things, and, here's a shock, they're all second (or third or fourth) growth. No one ever built a stonewall in a forest, so when you trip over one when hiking, be assured that you're traipsing through a former pasture. Similarly, Fort Stamford,on Den Road, was sited where it was so that Revolution-era soldiers could keep an eye on British traffic on Long Island Sound. It was a clear sweep of farmland from the top of the hill to the water, a distance of, what, 8 miles? Try spotting even a glimpse of water from that vantage point today and you'll fail.

Mature, well-sited trees add value to a house, but a clutter of scraggly celulose that preempts a yard does nothing but detract from that value. Who is to decide between preservation and removal? Mr. Crumbine and his supporters want to hand off that right to yet another commission. I think that Greenwich homeowners should fight to reserve the decision to themselves.

Recent sales

Bidding war!
314 Sound Beach Avenue, a modest little cape, came on this spring asking $1.39M and went to contract almost immediately via a bidding war. It closed yesterday, so we in the real estate world could finally learn the winning bid: $1,510M. The successful bidder was represented by an agent who often works with builders so this house may be destined for razing, I don't know. It's a brave builder, if so, but it's nice to see multiple buyers out there seeking the same property. Gladdens the heart of every would-be seller.

34 Cedar Wood Drive didn't go to multiple bids, but this new, big (9000+ sq.ft) house asked $7.895M and quickly accepted an offer of $7.375. Smart builder, in my opinion.

Two that haven't sold include a two bedroom in Cos Cob that sat on the market unwanted for just under $2M. I thought it should be asking far less than that, somewhere in the $1.495 neighborhood and I expected it to sell for even less, perhaps $1.395. Instead of lowering the price, the seller renovated the master bath kitchen and a lower level bath and has returned it to the market for $200,000 more than its original asking price. If, as I suspect, it's the location that's been hampering the sale, then the renovations won't help - the location remains what it is. But we'll see, and if the house sells, I'll have learned a lesson, one which I'll pass along.

17 Marks Road, in Riverside, provides a nice illustration of our declining market, at least for old (1898), smallish (3 bedroom) homes. It sold in May '04 for $2.250M and with no major improvements, was put up for sale again September 1, '05 for $2.835. That didn't really work out but it did sell in July '06 for $2.495. Now it's back again and yesterday its price was dropped to $2.45. After deducting commissions, conveyance taxes and attorneys' fees, someone's going to be hurting.

Will this global warming stop at nothing? Sheer idiocy, and it increases daily.

The Marvelous Chuck Schumer

The Wall Street Journal a has a great editorial on how this dreadful man single-handedly brought down a bank. I assume most of my readers also read the WSJ but just in case you missed it ....

One Off, One Still On

18 Sherwood Farm Lane, a very nice house built in 2001 on the Rockefeller land in Glenville, has gone to contract just two weeks or so after being listed. What impresses me is that (a) it wasn't brand new construction and (b) any sign of market activity in this price range $5,400,000 is always welcome.

53 Park Avenue South, on the other hand, has been reduced again and is now asking $2,295,000, a steep drop from its January listing price of $2,777,000. I liked this house and said so when it was first listed, but its failure to sell serves as a cautionary lesson: don't over-customize a house to your idiosyncratic tastes (this one was built as a modern Victorian, with garish or authentic, you take your pick-colors), don't build a three-bedroom house in Old Greenwich, where buyers expect a minimum of four, and add a family room. This house is ideal for a couple; most buyers in Old Greenwich have a passel of kids.

Grammar Police
A reader has taken it upon himself to monitor my spelling and grammar in this blog, which I appreciate. I no longer have a copy editor and, while I sometimes had amusing arguments with them (for instance, convincing an earnest young lady from Kansas that, yes, I knew that "au pair" wasn't really an anagram for "over-priced french baby sitter")as I claimed in The New Millionaire's Handbook , I did enjoy having them save me from my worst mistakes. So if somebody (or is it someone-I'll await a decision from my reader) wants to take on that task, for free, it's just fine with me.

Waiting for the other shoe to drop
Nothing coming out of the banking industry is good news recently, so buyers are understandably nervous and reluctant to buy. I can't give you advice on whether your job at UBS is threatened (well, according to some people I know, I can - don't plan any expensive vacations soon) but I did learn an interesting tidbit from Mark Hawkins, my colleague at William Raveis's mortgage banking division. According to Mark, a house's price must drop 10% to make up the difference of a 1% increase on a 30 year fixed rate. Interest rates are definitely going up, so waiting to commit on a house may end up costing, rather than saving you money.

On the other hand, do you have enough cash to buy a new house? The days of 20% (or, better yet, 10%) down are gone, at least for mortgages exceeding $2,000,000, which, in Greenwich, is a lot of the market. $2M mortgages require 30% down and it only gets worse from there. Greenwich real estate has performed no worse than the Dow (down about 14%) but certainly no better. Which will fare worse in the next year? Your guess is as good (probably better) than mine, but my guess says, as Wall Street goes, so goes the Greenwich market. Ya pays your money, ya take your chances. If you need a house now, though, and you've got some stocks you want to dump or a large pile of cash doing nothing, you can probably take advantage of a seller who is as nervous as you.

Richmond Hill Drive
This street, way off in Greenwich's northwestern corner by John Street, saw a spurt of building projects a few years ago. I can't tell what happened to a couple of the most expensive of them - they were deleted from our listings. Did they eventually sell privately? Only their agent knows.

56 Richmond sold in February,2008 for $4.2 million, but it was originally listed at $5.695 million in January 2007. Ouch. Similarly, 95 Richmond, listed May 2007 at $8.895, sold this past April for $7.450. Ouch again.

Of the six active listings, 71 Richmond failed to sell in 2003 for $4.050 and was returned to the market today for $3.795. There's no mention of any changes to this house except that it's now four years older, so I assume that the sellers hope that their desired price has caught up with the market. I suspect that 2003 prices were stronger than today's, and if it didn't sell at $4.0 then ... we'll see.

25 Richmond, a building lot, seems to be priced fairly at $2.095 but it's been on the market for the past year so what seems fair to me is obviously wrong. Keep cutting.

34 Richmond has been sitting, unsold, since November '06. The sellers have reduced the price from $6.975 to $6.450 but I don't think that's going to do the trick.

37 Richmond was bought in August 2003 for $3.6 million and is now back on the market asking $7.450. Again no mention of improvements, so this seems, er, aggressive.

The Mortgage Mess
Yesterday saw the Feds promise to bail out Fannie Mae and her siblings with you and me footing the bill. No surprise here - the Wall Street Journal has been predicting exactly this outcome for at least a decade - indeed, as the result of very bad political policies, this outcome was inevitable. But I don't see an alternative, now that Fannie is the only entity providing liquidity to the home lending market; while it (she, he, whatever) holds or guarantees 1/2 of existing mortgage loans, its share of new loans has soared to 70% - no one else wants to participate in the market. It took twenty years to dig this hole; let's hope it doesn't take twenty more years to climb out. I'm posting this before Wall Street has had a day to digest the news but I'm curious to see what its reaction will be to today's Fannie Mae auction of $3 billion in bonds. Hold onto your hats, and here we go.

Mega Mansions begin their decline?
The New York Times reports (and a large ad in yesterday's Greenwich Time announced) that a huge (the Times claims 26,000 sq. ft but that may not include the basement or, as such things are called at this price range, the "lower level) mansion on Taconic Road is on the auction block for $19,000,000, a sharp reduction from its original asking price of $31,000,000. I believe I wrote about this place when it came on a year ago. If memory serves, I thought it was too big for practical living and certainly that's what its owners think now. I once wondered in print what would become of these monstrosities when tastes changed and an older reader from the Back Country relied, "the joke in my peer group is that there will be no shortage of nursing homes when we need them".

There are still buyers for these things, of course, but fewer of them and I would think that even a multi-millionaire might question the wisdom of heating 20,000 sq.ft. with $5.00 per gallon fuel oil. Judge Judy is completing an enormous house for herself on lower Round Hill Road but aside from that (and it's rumored that she's paid $1,000,000 per episode, 50 weeks a year) I'm not seeing a lot of activity. Another article in the Times today focuses on the trouble investment bankers are having getting past co-op boards in Manhattan. It seems that the boards, like the bankers themselves, are just discovering that humongous annual bonuses don't necessarily appear every year. Plus, lenders no longer will count the bonuses as income and are demanding much larger down payments, so buying power is down. Jesus weeps, but if the bonus babies disappear, our Greenwich market will suffer alongside NYC. I think we're in for an interesting year.

Who Knew?
A reader has corrected my spelling of "just deserts" which, contrary to what I thought I knew, has nothing to do with a sweet tooth and therefore deserves just one s, and not two. Check the link below for a full explanation of this phrase's origins and correct spelling. Learn something new every day.