Emails from Realtors I never finish reading
"YOU OWE IT TO YOUR CLIENTS TO PRESENT THEM THIS WONDERFUL OPPORTUNITY ..."

I hate ALL CAPS and I prefer to decide for myself what my responsibilities are to my clients (and I don't sell in Stamford).

Straight from "The Grim Reaper Gazette"(Okay, I guess it's actually Bloomberg)GMAC Mortgage shuts down

``This gives you a full flavor of how terrible the mortgage market is,'' said Mirko Mikelic, senior portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan. ``The past year has been horrible and it doesn't look like there is any improvement on the horizon with continuing declines in home values and rising delinquencies.''

Did you hear the happy news about Greenwich house sales?

Don't worry, be happy!
A reader has posted the following comment:

Chris - one would hope that someone in the real estate industry (such as yourself), would at least try to promote an optimistic point of view. It's in the best interest of all of us, including the buyers.

I'd be happy to oblige, if only someone would point out something to be optimistic about. Sales are down 38%, values are dropping, buyers are sitting on the sideline, what can I say? Are there glimpses of cheer? Sure - there's a house sale pending in the eastern part of town due to close in a few weeks at $8 million plus that should blow the socks off any recent comparable sale on its street. When it does, you'll hear about it here. But otherwise, I'm pretty much stuck reporting on how things are, and things ain't rosy. I try to point out bargains when I spot them, and I've mentioned several times that there are bargains available but I'm not interested in painting a false picture of a healthy market, regardless of how that might serve sellers or even this particular realtor. There are a couple of other columnists in town who seem to have a brighter outlook so if you're looking for happy news, check their papers.
Of course, if I were a buyer who over-paid because of a supposed expert's opinion that things were looking up I'd be pretty ticked when things turned out otherwise.

136 Cat Rock Rd revisited

I mentioned yesterday that this renovated house finally went to contract last week at somewhere south of its last asking price of $1.995 million, down from an initial asking price of $3.4 back in January 2006. What I failed to point out was that the builders/sellers bought the place way back in November, 2003 for $1.4 million and spent the intervening years adding on, building a new septic field, etc. That's a long time and a lot of sunken money for such a paltry return. Watch out where you "invest".

Real friends don't let friend's letters go unanswered

Dear XXX - thank you for sharing the alarming news that Ms. Palin supports oil drilling and hunting mooses. I shall of course never ever vote for such a person and I intend to sell my rifles and contribute the proceeds to Mr. Obama as some small token of remorse.

Along those lines, and in view of your deep concern over global warming, I have decided that, rather than pay you back for the gasoline we consumed boating to Montauk this past week I will instead purchase a carbon offset from an Indian company that grows biomass for alternative energy projects. It will only cost me a few rupees but I'm sure that you'll agree that it's better to spend a few pennies saving our earth than encouraging the profligate use of our precious resources and the spewing of carbon out your 90-foot yacht's tailpipes.

Yours in peace, love and understanding,
Chris.

From The Volokh Conspiracy, everything the New York Times knew about war, peace and Iraq:

Surge of Ignorance The only real question about the planned "surge" in Iraq — which is better described as a Vietnam-style escalation — is whether its proponents are cynical or delusional. -- Paul Krugman, NYT, 1/8/07

There is nothing ahead but even greater disaster in Iraq. -- NYT Editorial, 1/11/07

What anyone in Congress with half a brain knows is that the surge was sabotaged before it began. -- Frank Rich, NYT, 2/11/07

Keeping troops in Iraq has steadily increased the risk of a bloodbath. The best way to reduce that risk is, I think, to announce a timetable for withdrawal and to begin a different kind of surge: of diplomacy. -- Nicholas Kristof, NYT, 2/13/07

W. could have applied that to Iraq, where he has always done only enough to fail, including with the Surge -- Maureen Dowd, NYT, 2/17/07

The senator supported a war that didn't need to be fought and is a cheerleader for a surge that won't work. -- Maureen Dowd, NYT, 2/24/07

Now the ''surge'' that was supposed to show results by summer is creeping inexorably into an open-ended escalation, even as Moktada al-Sadr's militia ominously melts away, just as Iraq's army did after the invasion in 2003, lying in wait to spring a Tet-like surprise. -- Frank Rich, NYT, 3/11/07

Victory is no longer an option in Iraq, if it ever was. The only rational objective left is to responsibly organize America’s inevitable exit. That is exactly what Mr. Bush is not doing and what the House and Senate bills try to do. -- NYT Editorial, 3/29/07

There is no possible triumph in Iraq and very little hope left. -- NYT Editorial, 4/12/07

... the empty hope of the "surge" ... -- Frank Rich, NYT, 4/22/07

Three months into Mr. Bush’s troop escalation, there is no real security in Baghdad and no measurable progress toward reconciliation, while American public support for this folly has all but run out. -- NYT Editorial, 5/11/07

Now the Bush administration finds itself at that same hour of shame. It knows the surge is not working. -- Maureen Down, NYT, 5/27/07

Mr. Bush does have a choice and a clear obligation to re-evaluate strategy when everything, but his own illusions, tells him that it is failing. -- NYT Editorial, 7/25/07

The smart money, then, knows that the surge has failed, that the war is lost, and that Iraq is going the way of Yugoslavia. -- Paul Krugman, NYT, 9/14/07

U.S. Hands Off Pacified Anbar, Once Heart of Iraq Insurgency. -- NYT, 9/1/08

Testing the Water (again)
The land at 264 Riverside Avenue was originally going to hold a fairly large house priced at $4.390 million. That didn't work out so the builder tried selling the land itself for $1.995 and (after, rumor has it, rejecting an offer or two that might have been close to that) sold it off last Fall for $1.350. Now a new builder is trying again, offering a "6,400 sq.ft." house "set among parklike grounds" for, again, $4.390 million. It could work, although I note that, 0.33 acres hardly conjures up images of "park-like grounds" to me, and the applicable FAR limits the above-ground house to 4,528 sq.ft., so there's a big chunk of basement presumably being included here. The builder/designer has done excellent work in the past so this promises to be a nice house regardless of its size and, with a planned completion date of Spring 2009, perhaps the market will have recovered enough to support its price. Riverside has always been a strong market and houses in this price range on this street have sold before so there's room for optimism. There's also room for skepticism, which I suppose is the point of this post.

Here's a whack upside the head
Courtesy of John Cooke, some self-explanatory sales statistics.
Click to enlarge

The only sales increase is at the bottom of the market which is no doubt due to prices falling rather than any sudden surge of interest. The only average price increase can be found above $5 million but that's probably due to new construction pushing things up. With a 38% decrease in volume, it's reasonable (to me) to expect a decline in this range later this year.

Where's that dunce cap now?
Greenwich Time reports, but not on line, that the Antares boys have ceded control of their Stamford redevelopment project to their Norwalk partner. Just two weeks ago Joe Beninati, co-founder of Antares, denied to The New Yorker's Nick Paumgarten that any such thing was possible. Things have obviously changed and Beninati professes to be delighted: "This frees Jim and me up for future acquisitions in the land assemblage [business]". That freedom is rapidly expanding, with the failure of their Putnam Green condo conversion project, the collapse of their Taconic Road residential spec development and the fire sale price supposedly fetched by their 35,000 sq. ft. disaster on Langhorne Lane. Just wait until their own houses around the corner from that mess are foreclosed - they'll have even more spare time to work their magic.

(From the New Yorker article)"By June, a developer from Norwalk named Carl Kuehner and his firm Building and Land Technology had joined the project. People around town wondered whether Antares had lost control of Harbor Point, but Beninati dismissed this: 'Carl’s going to lead the vertical development. He’s a superstar. It’s like trading for a Derek Jeter. We’re not about ego.' (A spokesman for Lubert-Adler said that the firm would have no comment.)"
Oops.

Update:
Greenwich Time has now posted the article

I don't see nuttin'
25 Birchwood started at $4.188 million back in May, 2007 and didn't sell, even though its price was eventually dropped to $3.685 million. It was withdrawn from the market last month but it reappeared today, now asking $3.995 million.

136 Cat Rock has a somewhat cheerier story, I suppose. Originally listed in January 2006 for $3,750 million it dropped to $1.995 last January and finally went to contract last week for what I presume was a deep discount from its final asking price.

My advice, as always; try to price it right to begin with and if it doesn't move, drop your price severely. Don't increase it - buyers aren't that dumb.

Another moment of
brilliance
21 Topping Road, 27 acres in the Back Country just east of the Helmsley place, has been offered for sale since August 2003 for $37.5 million. No one seemed impressed with that price so the sellers have switched brokers and brought it back on the market for $49.5 million. If that doesn't work, perhaps they'll raise it to $125 million so they can be just like Leona (her place hasn't sold either).

Famous Last Words
Joe Beninati, one of two co-founders of Antares Development Group (or whatever they call themselves) is quoted in the New Yorker article I mentioned earlier as being delighted to be renting to hedge fund companies in Greenwich and is remarkably sanguine about his continuing prospects of renting out office space at $150 a foot. Speaking of his tenants he says, “rent is as insignificant to these guys as the lunch bill.”
He may be right but I've heard those same rosy sentiments about Greenwichites' indifference to cost before, usually just before the latest group of pigeons goes broke and no one else is willing to step in to take their place. I'm not accusing Mr. Beninati of being stupid or anything, but I did notice, in reading the New Yorker article, that he and his partner met while each was doing "post-graduate work" at Choate. I thought that sort of educational detour was reserved for football players who flunked their SATs.

I didn't say it, Barrons did.
Realogy, parent company of Coldwell Banker and Sotheby's, continues to scare the financial press. In Barron's words, Look out Below!

Update 8/02/08
Bloomberg isn't impressed with their prospects either. "87% chance of default on their bonds" doesn't sound encouraging.

7 Dwight Lane
Thanks to research by reader Cos Cobber,this IRS auction property story gets more interesting. The full misadventures of a fallen, crooked hedge funder can be found here.The IRS auction page, linked to below and repeated here shows pictures. Judging from the cluttered interior, the resident wasn't all that cooperative with the IRS appraiser, and I suspect exterior maintenance has been neglected too - the SEC froze this guy's assets way back in 2003. If so, it's more likely to be a land sale rather than the five acres and a live in house that I earlier speculated would be a good buy at $2.5 million. Number 10 Dwight, a pure land sale (plus the cost of removing the existing house, like this sale) didn't move in 8 years at $2.9 million, and there's no reason to believe this one is worth $2.5.

The IRS ad states $2.5 million as the minimum price. If no one buys at that price, I assume that the IRS will take title and try to sell it again under its own name. Now that might produce an interesting value.

Update, 8/02/08
Today's Greenwich Time has an article on the sale (beat them to the punch, eh?). It's not available on line but if you check your neighbor's recycling bin ....
One little flaw in the article: it states that the property is worth $4.3 million "according to town tax records", and leaves it at that. If you pay anything like that sum for this property, you deserve to be the next investor in the soon-to-be-former owner's hedge fund.

Hurricane Hype?
Not really. Here's a thoughtful discussion of the issue. I'm a bit of a storm buff so I tend to read about what's happening during storms, regardless of their proximity. By early yesterday evening it was pretty certain that Gustav was not going to slam into New Orleans and had not regained the momentum it lost passing over Cuba but televison news never reported that. If I can read current information, why can't these reporters? Ratings, of course.
Here's my favorite blogger, law professor Glenn Reynolds of Instapundit.com on the subject:

Better safe than sorry, but watching the TV folks doing the usual standup-in-the-wind routine this morning I just thought how stale that shtick has become. Stay in the studio and just tell us what's happening. We've all seen newscasters with the wind in their hair now.

One itsy bitsy bit of politics.

Upon returning and checking my email I was struck by the number of missives from my "liberal" friends who have been sent absolutely around the bend by this Palin VP announcement. Greenwich Diva, run by a (black, female) friend of mine, has been forwarding every misogynist, sexist piece of trash she and her Kos friends can dig up - one day it accuses the poor Governor of lying about the parentage of the latest addition to her family and trying to hide her own daughter's pregnancy, the next it's accusations that Palin is an unfit mother who caused the poor infant's Down Syndrome by neglecting prenatal care. I've now read attacks on her figure, her hairstyle and even her support of gay rights (the latter, interestingly enough, purports to be from a conservative organization but web sleuthers tracked it back to
defendobama.com).

I love liberals, especially those who are my friends, but why is it that they so readily resort to the very tactics they - inaccurately - accuse conservatives of using? Posting pictures of a 16-year-old girl that "prove" she was pregnant while her mother was not (the picture turned out to have been taken 2 years before the actual birth, but why let that get in the way of a good story?), dismissing a female candidate because of her hairstyle and taste in glasses, calling her a bimbo (see Maureen Dowd - I won't) and bashing gays, which I assume is supposed to work up conservatives, all just show that sexist, stereotypical hate lies just beneath the surface of these folks. Scratch them slightly and it all wells up. I don't pretend to know the female mind but if my pals on the left keep this up, they just might drive some women voters away from the Obama camp in disgust

I'm back from the great fishing expedition and so here are a few items that cropped up while I was gone.
Reader Cos Cobber alerts me to an ad in yesterday's NYT announcing an IRS foreclosure auction on Dwight Lane. I haven't dug that issue from the recyling bin so I can't confirm the address but No. 10 Dwight Lane, 5 + acres with a tired house, was listed for sale for years at $2.95 million. If that's the property, it would provide a very nice building lot. I wasn't shocked at its asking price but it didn't sell for that (it didn't sell at all) and there might be a bargain available here, depending on how much the IRS wants in taxes. If it's not #10 we're talking about, my apologies in advance. UPDATE: found ad - it's 7 Dwight Lane, not 10. Don't know the property but will check it out. Auction scheduled for September 28th at noon. Open house September 5 and 6, 11am -3pm.
Another update:
Here's the IRS Auction Page with photos. Minimum bid $2,500,000. For 5 acres and a live-in house, good deal.

35 Price reductions last week, neatly matching 35 new listings. The only price reduction of note may be 48 Parsonage Road, new construction that's sat unsold for $7.85 million, now reduced to $7.195. That might do the trick, who knows?

Under "new" we actually have another price reduction, it's just been brought back on at a lower price. 44 Grahampton didn't sell at $6.995 million so they've chopped $1.0 million and change ($5.950 million) and they're trying again.

On the other hand, 2 Parsonage didn't sell at $3.684 (?) million so it's been relisted with another broker and jacked up its price to $4.425. Go figure.

895 Lake Avenue, a nice contemporary that was once part of that complex a crook (Frankel?) maintained (one of his chippies hanged herself there, he fled to Europe with diamonds, was caught and convicted and that's about all I recall) sold for $3.1 million, down a bit (quite a bit, when you figure in commissions and taxes) from its 2006 purchase price of $3.187.

Word from agents who did stick around last week is that they were busy showing houses to potential buyers so that's encouraging, but just 3 houses went to contract last week - if that doesn't improve in the next two weeks, we're in trouble.

What is it about the "Dinnertime Bandit"
that inspires headline writers to go goofy? Greenwich Time had cops "relishing in" the poor guy's defeat, The Greenwich Citizen crows, "Dinnertime Bandit convicted, those responsible exult". I suppose I'd exult too if I'd committed a series of crimes and a jury found someone else responsible, but should one of our local papers share in their glee?

More effective than bribing the maitre d'
The man pictured above, "Eddy", was our fishing guide for a few days this week and Thursday night we invited Ed and his wife Paula to join us for a farewell dinner at Harvest, reputed to be Montauk's best restaurant. Great idea but when we arrived we learned that there was an hour-and-a-half wait for an outside table and inside? Forget it. We turned away, wondering whether Tony's Pancake House was open for dinner, when Paula spotted the restaurant's hostess and hailed her. She explained our party of five's dilemma, the hostess disappeared inside for a minute and returned to announce in a loud voice for the benefit of the soon-to-be disappointed diners ahead of us, "I found your reservation - it was filed under 'Eddy'." Sure.

Okay, I felt a little guilty brushing past the hoi polloi clustered at the entrance but Eddy and Paula are regulars all year 'round (inside they were greeted by every worker, from bus boy to waiters) and heck, I've always wondered what it was like to have the velvet rope opened for my dining party. Turns out, it's just grand. Food was excellent, by the way and, compared to Greenwich, a relative bargain.