Slappy the Clown's Happy Dance

Happy Talk
I am under increasing pressure from my real estate peers to stop being gloomy and start reporting happy news. Ever eager to please, I looked up recent listings going to contract and compared them to last year. From June 15 through September 17 of 2007 147 houses went to contract, compared to 101 this year. That's a drop of 31%, more or less. In the shorter period of August 1 '07 through September 17 2007, we saw 64 contracts vs 33 this year.
So what's the happy news? I dunno - I suppose we could have sold nothing, and wouldn't that be a bummer.

This is offensive
Received via email this referral fee schedule from a local builder:


Offensive because I think a real estate agent's customer should be able to trust that she's getting good advice, not a disguised sales pitch. Or at least, that's my opinion.

Sleeping in the Playground
The town is planning to
redo the Bruce Park playground.
According to its sponsors,
a) Every child can reach the highest play level
b) Play structures are configured to support all children’s development
c) Pathways and surfacing are universally accessible
d) Cozy gathering and away spaces provide a rest from the action
e) Equipment such as swings with back support
f) Sensory-rich and ground level play activities.

It all sounds boring enough to drive even the most adventurous child back to his videogames.

Ugly
Stocks not doing well today
Uglier still:

With no hope for the return of the mortgage securitization and overall liquidity continuing to dry up, we believe that with fewer mortgages available,fewer people will qualify for mortgages, and homeownership will head materially lower. All this creates a recipe for meaningfully lower US house prices.

With apologies to the Rev. Jeremiah Wright, the chickens have come home to roost

Lehman's bad real estate ventures

One real estate investment broker described Lehman as “the real estate A.T.M.”
“They definitely were the mavericks out there,” said the broker, who did not want to be identified to protect his business relationships. “If you needed money, you could get it.”

Does anyone remember the Lehman/Antares ventures? Here's what Mr. Beninati, "Mr. Antares" says of his lenders on his own web page:

"In every deal we do, lenders decide if that project is for them," Beninati said. "But over the years, the opposite problem has arisen. Several banks might agree to finance our projects, and we regularly have to call some of our oldest and dearest friends in the industry tell them that Antares cannot give them business on a particular deal."

Gee, I don't know, it seems to me that Antares was only too happy to "give them the business".

From The Grim Reaper Gazette

Housing starts at 17 1/2 year low
I've had a couple of conversations with builder friends and clients and I can confirm that this same sense of caution pervades Greenwich, too. Of course, fools rush in ... and all that, so we may still see some activity.

Where's the legal authority for the Government to buy AIG?
Nowhere, but apparently not enough people care.
David Zaring:

But, in the Fed's legal defense, maybe, just maybe, the settled expectations are different here, based on the government's takeovers of Fannie and Freddie, and the pleading by AIG for government involvement. Does the very fact that the insurer hoped for Fed action suggest that the Fed could act?
Hmmm. The other defense would be that emergencies are emergencies, and when that happens the rules go out the window, and hopefully regular elections mean that the officials the people trust are dealing with the emergency. Abraham Lincoln adopted that reasoning, and he won the Civil War. I suspect we're at the "anything goes in an emergency" stage of things. But maybe reasonable minds could disagree.

Megan McArdle writes,

A lawyer friend IMs "I would be fascinated to know on what authority the Fed is claiming the right to do this." It's probable that they don't actually have the legal right to do anything like this. Their authority is this: who's going to stop them? No one wants to take on responsibility for this mess themselves.

I'm all for living in interesting times, but these days, things are getting curiouser and curiouser.

Hunter Thompson Lives
Reading the rantings of Greenwich Round Up is a bit like spending time with your crazie Uncle Eddie, fresh from another unsuccessful round of electroshock therapy at Silver Hill. Always entertaining, equally confusing and crammed with HUGE HEADLINES, tuns of mispelings and nasty things to say about almost everybody. But always fun, so long as you're not on the receiving end.
And, to give Crazy Eddie his due, they guy is way ahead of the local press on issues like the Byram School fiasco, the bozos (okay, I used a picture of bonobos to depict them, but close enough) on our School Board, and the sad, escalating decline of our daily paper, Greenwich Time.
I disagree with him most of the time - I happen to support the new Stanwich School, for instance, even though I have no kids at that school and if I, as a disinterested person, can applaud their efforts it seems reasonable to assume that our P&Z's decision in favor of the project could be because reasonable people think it's a good idea, rather than because of bribery and corruption.
But so what? It's a fun read.

NOT subject property
The builders are leaving tra la, tra la
89 Lower Cross Road was offered as a to-be-built mansion back in 2006 for $6.7 million. Construction started but no one bought and now you can buy it, complete with "foundation and partial framing" completed, for just $2.595. How valuable are such improvements after they've sat out in the weather for a few years? Another way of asking that is, what's a building lot worth on Lower Cross, minus the expense of scraping off and disposing of the wreckage?

Gabriel Nathan Schwartz
Ah, those fun loving delegates!
Some readers suspect me of being a Republican sympathizer. I'm not. But I do like following the foibles of politicians of both parties, such as this yokel who got robbed $50,000 at the Republican convention by a lady he let into his hotel room. What a 30-something male lawyer is doing carrying that much jewelry is a mystery, but $4,000 of the loss was a pair of earrings and he is a Republican, so perhaps that's the explanation. But take a look at the guy's picture. Could anyone with an ounce of self-honesty think this face would cause a beautiful woman to invite herself up to his room? Maybe she was also a masseuse.

One of my favorite and wisest writers, James Lileks
Has this to say about boom times:

Having lived through a few such panics – real estate in the late 80s, the Savings and Loan crisis, junk bonds, the dot-com nonsense – I can conclude only one thing: no one pays attention to their gut. Whenever real estate spikes, my gut always says it’s a temporary thing, because two-bedroom houses with a cement yard and a bathroom that consists of a bucket can't possibly be worth $800K just because it’s in California. Ditto the dot-com: start-ups like tentonsoftofu.com were getting millions of dollars with the usual vague projections: in the future everyone will be online, and since tofu will be more popular than ever, people will want to buy 20,000 pounds at a time if we offer the convenience of online ordering combined with free shipping. Most people thought it was nonsense, but the times were good, so enjoy.

Pricing tip
I'm aware of a certain house whose owners paid too much for, back in the day, then compounded their error by over-improving what they'd bought. It's a lovely house, but it's priced way above what they can ever hope to get for it. When their agent suggested a price reduction, they proudly showed off a new kitchen they'd added and asked, "how can you ask us to drop our price now that we've redone the kitchen?" Well, if they'd asked their agent, she would have advised against throwing more money into the house. At a certain point of over-pricing, adding features will not address the real issue, which is price. These folks have just built a beautiful kitchen for someone else to enjoy but it will be at the sellers' expense. My advice? Get advice, before you spend money on a house you're trying to sell.

It must be the Boston Globe's day
here's a good blog on truth in real estate advertising. Turns out, buyers aren't stupid. Who knew?
The writer wonders what the phrase "must see" means. Had she asked, I'd have told her: a complete mess from the outside, so bad that no self-respecting buyer will get out of her car to examine it. The phrase implies a promise that there is something to see inside but in my experience, that's a lie.
One of my favorite phrases is, "now priced to sell". What the hell was it priced at before?
Or, "renovated", with no further details. Believe me, if we agents can find anything positive to say about a house, we'll mention it, so if you see this phrase but no specifics like new kitchen, new master bath, etc., you can assume it means that the fireplace ashes have been removed and the dust bunnies swept from under the bed, period.
"Convenient to transportation" of course, means it's cheek-by-jowl with the highway, the railroad, or both.
"This one won't last" almost always appears on dogs (and usually in conjunction with "must see". It's always bittersweet to see this description still lingering on year-old listings.
Need any other interpretations? Care to add some of your own? Pile on.

More pricing follies
29 Byfield, mentioned here before, was listed April 15, 2008 for $9.495. It's been dropping like a rock ever since and today was reduced again, to $5.698.
39 Boulder Brook, also listed on April 15 by the same broker, came on at $8.595 and dropped yesterday, again, to $4.998. Same broker, same listing date - same builder? Someone's losing sleep, if so.
12 Doubling Road, coincidentally, was also listed by the same broker,back in September '04 for $14.5 million and eventually sold for $7.575. A building lot was split off and sold for $4.130 in '06 (nice price for the seller, I think) and now the original 1913 mansion, completely restored but shorn of several acres of its magnificent lawns, is back on for $13.5 million. Convenient location and nice house so maybe this time's the charm.
And then we have 228 Stanwich Road. Its original owner tried to get $2.125 for it at the height of the market in 2007 but finally sold it for $1.7. The new owners returned it to the market, untouched, a year later, and asked $1.895. Today they lopped off $46,000. Call me crazy, but I think they'd be better off shooting closer to the price they paid for it. Regardless, I don't think a 2% price cut is going to be much help.

35 Club Road
This new construction in Riverside sold yesterday for $8.675. The owner wasn't engaged in a spec project, as I understand it, but someone saw the finished product and made him an offer he couldn't (or didn't) refuse. A new record for non-waterfront property on this road, I believe. So that's nice.

Uh oh
Five hours ago: Goldman Sachs expected to reassure investors amid market turmoil
30 Minutes ago:Goldman Sachs reports huge profit drop

Are you reassured?

Good Lord!
A columnist for the Boston Globe who understands Obama's tax plan. Next up, the New York Times? Nah.

Okay, here's some good news for homeowners
If this market has messed up your dream of getting rid of where you live and moving into something better there is a silver lining: great contractors are available for small projects. My Pal Nancy recently hired Rick Hvolbeck and his partner, Al (whose last name I should know, but forget) to replace a rotten column (not my newspaper column but one holding up the porch), failed sills and window trim. They did a terrific job for an incredibly reasonable price. No surprise here: Rick's a 3rd generation Greenwich home builder and Al clearly knows his stuff as well, but, according to Nancy, they came when they said they would, were neat, did a beautiful job and had no hidden expenses when they were finished.
Rick can be reached at (203) 249-2297 or RCH1043@aol.com. The two of them are so good that I'll permanently post their contact info on the side of this blog. If you've been considering new kitchen cabinets, a new garage (these guys can build you a new house, of course) or, like Nancy,just fixing those depressing, rotted bits of your house, now is the time to do it and these two are the men to call. No, I don't get a discount for my own work, I just know how difficult it has been to find competent people willing to attend to smallish jobs. Now's your chance.

Boulder Brook now reduced to $4 998. I'll check
my earlier post on this tomorrow but I.believe it started in April at $8 5 Stupid

And who's going to pay those taxes?
Maybe not real estate agents. No contracts today, at all.