The sound of one shoe dropping

UBS offers 112,000 sq.ft. for sublease. A commercial broker quoted in the article says this is just the first attempt to sublease a huge block of financial services space - the industry expects many more. I keep thinking of that Antares' principal's quote in the New Yorker, to the effect that he wasn't worried about charging such high rents to tenants at the old UST building in Greenwich because they were all hedge fund firms, "and these guys treat rent payments like lunch money bills." What if someone eats their lunch and steals their lunch money?

Oh, Goodie!
Obama will require high school and college students to perform community service. There was once a time in this country where only people convicted of crimes could be sentenced to involuntary servitude; all others were permitted to live their lives as they pleased. That old fashioned notion is gone now, thank goodness, and we're all just tools for society's great redistribution plan, as designed and run by the majority's elected representatives.

How's it going to work out? If you go to the link, which is the official Obama transition site, click over to his health plan and try this: match his wonderful goals: universal healthcare, lower insurance costs for everyone, a cure for cancer, cavities and love handles, with actual details of how he's going to accomplish them. Not there? Don't worry - your countrymen didn't care about such niggling details; nor should you.

Oh, darn!
There's long been a wide-spread belief in the local real estate community that mysterious foreigners backed up our market by paying ridiculous prices for houses here. Certain firms even marketed themselves as having a secret "in" to these people with the implication that, if you listed with them, they'd find an Irishman hiding under a wheelbarrow somewhere in the rocky fields of old Eire who wanted nothing but to buy your place. I never quite believed this hype and, while real estate agents are still flogging the idea, this article suggests that if these unsophisticated, rich foreigners ever did exist, they no longer do. On to the next myth.

Turns out it was a good day to go fishing
Not much went on according to the Greenwich Multi List. Fourteen price reductions but people are still thinking in the 5%-9% range which, in my opinion, isn't going to do it. There was one contract, 324 Overlook, which is of interest only because I wonder if my own Board isn't beginning to play games. The computer listing shows that its last asking price was $1.995 million and that its original ask was $2.375, Fair enough, but when I went to the property's history only the $1.995 price shows up - no mention of the previous price and searchin two other, different ways yielded the same result. Is it possible that the Realtor's Board is sanitizing pricing histories in order to make things appear better than they are? They wouldn't do that, would they? Nah - must be a computer error.

Chris Mathews: "It's my job as a journalist to make the Obama presidency work. As I said to a liberal friend just this morning when he was extolling the virtues of bi-partisanship, it would have been nice to see some of those sentiments during the past eight years. But oh yes, that was when McChimpy Pretzlechoker Bush was president. him, we don't like.

Tautog for now!

I was out fishing all day (hey, if you're not going to buy a house from me, I still have to eat). Caught two tautogs (blackfish) one bluefish and a confused scaup (porgie) who didn't realize that scaup season ended last month. The blue and the scaup were returned from whence they came; the two tautogs stayed for dinner. All of which is by way of explanation of why there have been no new postings today. I'm about to check out our MLS hot sheet and if anything interesting has happened, you can read about it here later. In the meantime, I see that there are 9 new comments, so someone's been working.

I also just discovered that Blogger's much vaunted Google algorithm has decided that this blog is a spam device, which is going to make posting difficult until an actual human intervenes, probably sometime in the next century. The last time Google screwed up my blogging in a different way I went as far as setting up a new account with a better system, Wordsmith. I stopped that process when Google got things going again but round two of this nuisance is probably going to send me over. I'll let you know.

What the heck?

I realize that no one at the soon-to-be-defunct Greenwich Post reads this blog but I'd hope someone who does and who knows someone at that paper would point out to them that they keep running a chart that purports to show the number of houses sales in Greenwich this past September. I think they've confused the entire year for September, or maybe it's the past decade, who knows. Either way, if we'd sold half that amount in September of this year I'd be writing this post from St. Bart's and Greenwich homeowners would be dancing down the Avenue. Haven't seen that happening, yet.

62 Ridge Street Open House
So they opened this place up to brokers' inspections today and, after commenting yesterday on the curious logic that prompted its builder to increase its price to $7.5 million, I thought I'd go see what he was selling. Hmmm.

If this place were to have replaced my father's old Brownstone on 233 West 11th Street, I'll bet he would have been delighted at the exchange. It's a very nice city house and in the city, views and proximity to neighbors are pretty much irrelevant (or at least I think so - I was ripped from the bosom of Greenwich Village and transported to the rural wastelands of Greenwich when I was just a few months old, so my memory of the view from that Brownstone is dim). But this is not a city house, and the view of the Honda dealership and the old warehouse where I used to grind up horsemeat after school is certainly interesting, but not necessarily what someone expects when he moves to Greenwich.

Or I wouldn't think so, anyway. The house itself is grand, although I wish Greenwich's spec builders would stop outfitting their creations with the same Viennese crystal chandeliers that some supplier obviously got a deal on - I've seen the identical fixture scattered around three houses now (this one has three of them!)and while the builders obviously love them, they bring to mind General Patton's comment when someone mistook the ivory grips on his Colt .45 with pearl: "Only a pimp in a New Orleans whorehouse or a tin-horn gambler would carry a pearl-handled pistol"; I think he'd feel the same way about these bits of glass. Price isn't everything, guys.

So is there a buyer for a $7.5 million house in this part of our "downtown"? I'd have advised any client of mine against gambling that there was but I wasn't asked. And considering those chandeliers - well, it was Patton who used the phrase, "tin-horn gambler", not I.

63 Sound Beach Ave. ext.

Here's another (almost)20% price reduction, from $785,000 to $640,000. That's probably where it should have started, in my opinion, but now it at least looks realistic. Of course, the seller may have done himself a disservice by starting off where he did but ....

There's a "new" listing way up Taconic Road today asking $3.5 million. It's actually an old listing for a house on 4 acres that didn't sell at $4.0 million and, while $500,000 may seem like a lot to whack off the price, sellers should remember that the place didn't sell at the original price, so the price reduction doesn't really represent an actual out-of-pocket "loss" of 12.5%. It's a bit of a slice off the dream, perhaps, but dreams have no monetary value. I think this property is still in dreamland.

A favor that will help me and your fellow readers
I get a fair number of requests for the names of good builders, contractors, painters, etc. I've posted some of that over on the right side of this column but I know that there are lots of good people out there I don't know about. If you have the name and contact information for a tradesman (or craftsman or whatever) whom you're pleased with or, for that matter, wouldn't wish on that lousy neighbor down the street, the one who ran over your cat and never apologized, would you pass them along? I'll compile a directory and, once I figure out how to do so, post it all online as a down-loadable pdf.
Thanks!

I don't know what all this means but it doesn't sound good.

Yesterday the DTCC (that would be the Depositors Trust Clearing Corporation) issued a report that, for the first time, established an estimate for the total pool of credit default swaps at loose in the world: $33.6 trillion, which seems to this writer to be a lot of money. Today, however, Bloomberg reports that some "expert" thinks that the DTCC missed 40% of what's actually out there. How much is that, then, $60 trillion? A whole bunch,no matter my math, so that's a pretty large liability floating around, no?

Are these guys all Greenwich home owners?
Poll: 67% of wall Streeters expect bonuses this year And one in 10 said they expect this year's bonus will be at least 33 percent higher than last year's - those are definitely the ones pricing houses here in town.

Sadly for them (and for those of us who like to sell houses) there's this from today's paper:

Wall Street pay expected to plummet And those bonuses they do receive will be stock shares, not cash. Big whoop. Here's a sobering thought:

In previous lean years, Wall Street banks justified large payouts by arguing that top employees would flee for higher-paying jobs. But with tens of thousands of Wall Street jobs disappearing, that argument may no longer hold. “Where are people going to go?” one senior banking executive asked.

A friend tells me that he had dinner with a Wall Street head hunter last night who told him that her CEO and his next in command were let go last week. According to her, we haven't even begun to see the carnage that's coming. Whether she's right or not, it's beliefs like hers that have frozen this market.

The gift that keeps on taking
Waxman to challenge Dingell for House Energy Committee chair. As promised by the One, say goodbye to coal, say hello to "skyrocketing energy prices".

Interesting real estate forum over at Forbes

He can still vote at North Street School but not at 745 7th Avenue or at least, not for long: Fuld to be terminated by bankrupt Lehman at year's end.

Another builder to recommend
I ran into Paul Bauts yesterday (Bauts Construction, Inc., (914) 8799027)and was glad to renew his contact information. I first met Paul when I lived in New Canaan with a friend who was considering a major renovation. We kept driving past a good looking renovation project and, in addition to the obvious quality of the work being done, I was struck how tidy the grounds were. In my experience, a builder who pays attention to the mess generated by his crews also pays attention to the details of what those crews are doing. We stopped in to meet the contractor and the first person we met was the homeowner himself who was living in the house with his family while the renovation was being done. The guy couldn't sing Paul's praises loudly enough which I took to be an excellent recommendation. We later checked out some of his other jobs and references and all were remarkable.

My friend's renovation never took place and I lost contact with Paul until yesterday but I was glad to learn that he's still busy, operating out of South Salem New York and still doing jobs down here (I know, for instance, that he did a project for one Riverside resident some years ago and when he finished, she recommended him to her own sister - assuming the two women have a good relationship, that's a powerful recommendation). Anyway, I'll be adding his contact information to the column of recommended builder types on the right hand side column (I'm going to put together an emailable document/brochure soon, with all this information)and you should be very confident in contacting him about work on your own house - new or renovation.

This would be neat, if it works
New coating technology captures more solar power
If true - it's a press release from RPI - and can be made cost effective, it will revolutionize solar energy collection. It will also make obsolete the existing technology that moves solar panels to track the sun. Under the now-discredited theory of free enterprise, that would put some businesses out of business and free up capital for new business to take advantage of something better. Now, of course, existing businesses will stay operating thanks to taxpayer subsidies and more taxpayer money will rush to support this one. It's a win win situation for everyone except those footing the bill.

62 Ridge Street

Say, here's an idea!
Can't sell your spec house for $7.250 million? Delete the listing and bring it back on at $7.450! If that doesn't work, I suppose you can yank it up to $12 million and see what happens.

To be kind, it's possible that the builder of this home was so swamped with offers as he was building it that now that he's nearing completion he feels confident that he can ask for and receive even more money. In which case, good for him - the market needs some good news. I myself am a little skeptical about this price on this street. Ridge Avenue is a neighborhood "in transition", as we realtors like to say, with the previous high sale being $2.850 each for two condos on the corner of Ridge and Havemeyer. Those sales occurred last year; one unit was returned to market this year at $2.895 and so far has found no takers. 62 Ridge is further down the road, closer to the highway noise and the railroad and, although I could certainly be wrong about this, I wonder whether there is a market for a 10,000 sq.ft., 5 bedroom 7 1/2 million dollar mansion in a location that's slightly out of the downtown district. I guess we'll find out.

247 Byram Shore Road

We discussed this house back when it saw an earlier price reduction, but here it is again, marked down today to $8.9 million, or 74% of its original price of $12 million. Sooner or later it will find its proper level.

My Dinner with Andre
Lunch with three close friends, actually, two of whom are real estate lawyers I labored in the trenches with back in our last bad market in the early 1990s. Their take? Things are simply awful, and much worse than they were back then (of course, we were all younger then, and optimism was easier to come by). "It's as though everything just froze overnight," one said. "Nothing is happening."

I asked how many high-end properties were purchased with high-end mortgages and they agreed that, while a lot of buyers in the past years simply took out the $1.1 million in mortgage money that is deductible, there were plenty of buyers who were stretching to the limit to get the house they wanted. These two lawyers, by the way, are involved in probably 25% or more of the real estate transactions in town, so their view is a good one. Their prediction, one I agree with, is that nothing significant will happen in the market until January. But then a lot of people who have been trying to hold out are going to give up and put their homes up for sale. When they do they'll price them to sell which will finally break the logjam that now exists, with realistic buyers butting heads with steadfast sellers.

If this prediction bears out, existing sellers are going to have a lot of competition and those competitors will be setting a new, much lower level for pricing. And if that happens, you out there who have been refusing to come down to a price that will move your house are screwed - the market will just pass you by and go to the new, lower-priced inventory.

So what should you do? The sad news is, there probably isn't much you can do. All four of us diners agreed that, today, almost no price cut seems capable of spurring a buyer into action. If someone is too nervous to buy, they aren't going to, regardless of what bargain they perceive. Of course, no house in Greenwich is worthless and if you marked anything down to some hypothetical price you'd find a buyer. But where's the happy ground between a ridiculously low price and one that will make economic sense to you and still move a buyer? It's hard to tell. The two quick sales I discuss below are evidence that, at least in some cases, price does still matter. The growing inventory, much of which has seen price reductions, indicates that demand is still too weak to be affected by price cuts and certainly not by 5%-10% cuts. So price it way below where you might have priced it two years ago and be prepared to whack at it even harder in 30 days. Might work.

I do suggest, however, that if you've been clinging to a price that you know is too high you might want to adjust it now, before the January flood ensues. Will it help? God knows, but it can't hurt.