Schools

A reader posted a comment below, asking why no Realtor would give him any information about the relative merits of the various schools in town and instead restrict their comments to "all our schools are good". That's not necessarily how parents feel, but we real estate agents are barred from saying much else without violating a host of civil rights laws and state regulations. We can't mention proximity to churches, whether a particular neighborhood has a lot of kids or none or anything else you as a buyer new to town might find useful. Welcome to the new world.

I believe we can suggest that you contact the Board of Ed and grab the test scores for each school, but I don't know how much help that is. You may be able to visit each school and get a feel for how they're run but in these post Columbine days, who knows? I do know that the principals are all pretty proud of their respective schools and you can almost certainly make an appointment to meet with any of them and get a sense of how the head of each school views his bailiwick. Or join a newcomers club and talk to other parents. Their opinions may not be factual, but at least they aren't prohibited from speaking their mind. Good luck.

SWAT teams

So you're a small town mayor in Maryland and you have the misfortune to have a couple of crooks pick your address at random for a drug delivery - they'll mail a package to your house and then pick it up under the pretense of a delivery gone astray. Arizona cops stumble across the scheme and enlist your local county's sheriffs to raid your house, even though they know that you aren't guilty of anything. Had the sheriffs asked your local cops, they'd have learned that you were a non-druggy and the mayor of the friggin' town, for cripe's sake but when SWAT team equipment is ready at hand, why worry about details that might spoil the fun? They charge in, shoot your two Labrador retrievers to death then handcuff you and your mother in law and make you lie in your pets' blood for two hours while they ransack the place.

Then they let you go. No apologies because, 'we don't need no stinkin' warrants". There are lots of good reasons to oppose our supposed war on drugs and its futility is just one of them. Another is how we have empowered storm troopers and even what was once the beloved Coast Guard to trash houses and boats and terrorize civilians. Not good.

"Investments" gone bad

A house on Riverside Lane sold for $1,639,000 in January 2007. The new owners added some new touches and put it back on the market exactly a year later for $1,895,000. That didn't work out so today it took its 4th price reduction and is now offered for $1,699,000. Even if they get that price, the sellers will lose at least $100,000 after they pay commissions and taxes, plus whatever they spent in renovations. Oops.

There's another house, on North Street, that continues to try to defy the market. It was first listed 8 1/2 years ago for $5,750,000 and didn't sell. It's been on and off the market ever since, unsuccessfully, and reappeared today for $3,995,000. That might have been a good price 8 years ago but there is now such a stigma attached to the place (you try to explain to a client why it hasn't sold in over 8 years) that I don't know what price will move it. It's a nice house, too, so that's a shame.

Finally, returning to Riverside, north of the Post Road, there's a renovated house that came on 1 1/2 years ago asking under $2,000,000 but still $150,000 more than two new houses around the corner. The new houses sold immediately and those of us who saw this one at an open house all suggested, gently, to its broker that he'd be better off dropping his price below theirs. I guess he finally listened, but his new price announced today is way overdue and probably too late.

None of these examples is necessarily evidence of a free-falling market, although I suspect all could have sold for more than their current asking price a while ago. What they do have in common is that they were all overpriced initially and, good market or bad, that kills a sale. They're just getting hammered twice now, instead of once. Oh well.

Bush - how we'll miss him

Good link above to an opinion piece wondering how people will cope when they don't have Bush to kick around after January. Who will be left to blame? The author cites a number of examples of Bush-bashing but she missed an opinion piece in yesterday's Wall Street Journal that blamed the sorry condition of illegal immigrant meat packers on, who else, George Bush. The article is only available via subscription but trust me, its author is absolutely beside himself over Bush's callous treatment of the poor workers and the president's personal intervention (with Dick Chaney, no doubt) to create hell on earth for the until-then happy workers.

Fine,and Bush is certainly the Devil himself, but a quick Google search turned up a book review dated 2001 that blames the problem on a change in immigration law that was enacted in 43 years ago.

"Congress in 1965 inadvertently came to the rescue of the union-busting, wage-lowering strategy of the new meat packers. The 1965 immigration law had a major impact in the direction of the meat-processing industry by creating surplus labor pools with spiraling family chain migration and massive refugee resettlement operations."

Bush hadn't even begun drinking or joined Skull and Bones in 1965, when, according to this second article, Eden was lost, but it's his fault for not fixing it! The three Demmerkrat administration we enjoyed since 1965, Johnson's, Carter's and Clinton's were too preoccupied to take care of these people but Bush, that awful Bush, will rot in Hell for his wilful failure to do so. And now he's leaving. What will we do, what will we do?

Auction rate securities

Some time back, when a non-profit group I'm involved with discovered that they had $1,000,000 of funds frozen into this type of debt instrument, I wrote that it was a typical example of Wall Street treating its customers badly. These securities were described as as good as cash but, when the debt markets collapsed, firms like UBS and Merrill Lynch got their large customers out of them and re-sold them to non-profits and ordinary schmos - people who, say, wanted to hold their down payment for a house in an account yielding a quarter point more than a CD. Of course, when it came time to access those funds and buy the house, the schmo's "financial advisor" was forced to admit that there was a bit of a liquidity problem and the money wouldn't be available for, say, a year or two.

My column on the subject elicited the usual outcry from certain stock brokers advising me to stick to writing about real estate and stay away from subjects I was too dense to understand. I understood their ire - they're the ones who, having no clue what they were doing, sold this junk to their customers and were feeling the heat, but I take a certain satisfaction watching their employers roll over and agree to buy these securities back. And pay fines of $100,000,000 or so. Yesterday it was Merrill's ($12 billion)and Citigroup's ($7 billion)turn. Today we'll see UBS cough up $22 billion. Who else among the large firms is in hot water? All of them.

Who you gonna believe, me or your lyin' eyes?

Perhaps foreshadowing my later career as a trial lawyer, this quote from "Duck Soup" (not by Groucho, as I remembered, but by Chico disguised as Groucho - see link above) was one of my favorites when I was a kid. It's still a good one. I have been chastised over the past year or so by some of my fellow Realtors for telling readers, first in my column and later on this blog that sales are way down and will probably continue that sorry decline for the foreseeable future. In fact, although the specific reason for my column being terminated was my daring to report on the financial woes of Realogy, parent company of Coldwell Banker and Soetheby's, I'd generated a deep reservoir of ill will in the real estate community by telling the truth.

I don't know what these "keep it quiet" folks think they're up to; if their clients' houses aren't selling, or selling at discounted prices, who is left to be fooled? Regardless,even the Greenwich Time has finally admitted today what the industry has known for at least the past two years:

Update 2:05 PM Here's what I wrote before I was so rudely edited by Blogger.
house sales are falling. At least 30% this year. GT finds a ray of hope in the number of sales (condos) under $500K but that number only increased from last year because prices have fallen below last year's levels. For those who like anecdotal evidence in addition to statistics, there's this: I called my plumber yesterday for a quick repair job. In years past he, and most plumbers in town, were so busy with new construction that non-emergency response time was 2-3 days. yesterday, he had someone at the house in 15 minutes. If the plumbers aren't busy because the builders aren't busy, things are slow.

Read the comments

"Retired IB'r" has some very thoughtful, and wise comments appended to the "whither the market?" post below. Tomorrow I'll move them up-can't do it now with my iphone - but if you're reading this Thursday night, check them out

Don't do this to yourself

Two reported contracts caught my eye this morning because they both illustrate the agony caused by holding out for the 'right" selling price. Now I may be entirely wrong, here, and the sellers may have been perfectly content to stay with their property until someone met their price, but, given the desparity between the original asking price and the last price, it's a fair assumption that the sellers should have moved more quickly to adjust their wishes to reality.

44 Calhoun Drive was first listed on March 24,2006 for $6,200,000 and was last listed at $4,495,000. It went to contract yesterday, 2 1/2 years after first being offered, for no more than its last asking price and probably less.

Same story with 11 Hettiefred Road, in western Greenwich. Nice construction (over) priced at $3,375,000 way back in August 2006 and finally under contract yesterday for, at most, the latest price of $2,349,000.

I've always counseled clients to try their best to hit the market with the right price the first time - a listing is only new once, and grows stale with time - but if you or your agent make a mistake it will be immediately apparent. Do not wait for "the right buyer", the one you think will wander in, fall in love with the place and pay more than it's worth; that buyer isn't coming. Do cut your losses, right away. Slash that sucker, and not in $15,000 increments, which only invites a death of a thousand slices. Move it, move on.

Greenwich Round Up Scoops the town papers

The local blog (hit link above, then scroll down a bit) has been reporting for several days on a story that our local press missed: the strange case of the purported Rockefeller who seems, besides being a kidnapper of his own daughter, to be a German con artist and murderer, wanted for questioning in California since 1988 (or thereabouts) when his landlord's body was found buried in his backyard. Roundup dug up a Greenwich connection to all this and was reporting on it all while the "real press" worried about wiffleball tournaments. The latter may be more family oriented, but give me corpses and con men,any day.

Whither, or wither the market?

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

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

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

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

2nd Quarter sales statistics

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

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

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

OwlGore buys a houseboat

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


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

Waterfront redux

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

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

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

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

So I still like the stuff.

Zillow - Misperception of home value

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

Blowing against the wind

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

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

Thanks, Nancy

Waterfront is still King

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

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

What is it about Byram?

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

Lawyers and Real Estate

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

Sales Meetings for Real Estate Agents

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

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

no blogging til this evening

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