That’s what we’ve been saying, but here’s someone else saying the same thing. Prices are returning to normal but aren’t there yet if you use almost any income to purchase price ratio. And if the financial services industry has the kind of year we’re all expecting, the income side of the equation is going to drop further. I think buyers are waiting for more than regular pricing anyway – they want, and won’t move, until they see panic prices. So far, only a few builders have hit that stage of desperation; look for more come the new year and if so, those sales will drag down everyone else. Good for buyers, bad for sellers.
-
Blogroll
Bumper stickers
Useful Links
ClustrMaps
helpful Information
-
Top Posts
- Greenwich High - SAT scores up while number of test takers drop
- Obama Press Secretary Gibbs: "Can you imagine five years ago people walking around with images of Hitler?"
- All your lives are belong to us
- Tina Pray gets artistic
- One bright spot from our local elections
- House votes to wreck economy; Republicans add anti-abortion provision
- Will Crown Lane displace Round Hill as Ignominy Avenue?
- Homeland Security responds to Ft. Hood terrorism: focus on preventing anti-muslim backlash
- Barney Frank needs a better class of boyfriend
- Still available
Archives
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- July 2006
- June 2006
- May 2006
- April 2006
- March 2006
- February 2006
- January 2006
- December 2005
- November 2005
- October 2005
- September 2005
- August 2005
- July 2005
- June 2005
- May 2005
- April 2005
Tags
Andres Piedrahita Andy Madoff Antares greenwich Bernard Madoff Bernie Madoff Catherine Hooper Chris Dodd Chris Dodd and Countrywide Chris Dodd Scoundrel Contracts Fairfield Greenwich Group FGG George Lindemann Jr. Global warming bunkum Greenwich real estate Greenwich real estate pricing Greenwich spec houses Greenwich Time Jeffrey Tucker Jim Himes Jim Himes - dullard Madoff Market activity Market conditions Mark Madoff Monica Noel Nancy Pelosi NYC real estate prices Obamacare ObamaKare Price cuts Prices pricing pricing real estate Real estate agents real estate market conditions Realogy Death Watch Ruth Madoff Sales Somali Pirates spec houses Stimulus fraud The fabulous Noel girls Walter and Monica Noel Walter NoelMeta
Blog at WordPress.com. | Theme: Pressrow by Chris Pearson.
18 Comments
December 29, 2008 at 11:17 am
What would be your specific advice to a client with a family looking to buy in Greenwich in the $1 million range? Is there anything on the market in a good, family neighborhood that you think is priced to sell? In this price range I realize that the house won’t be in the best shape. Any suggestions?
December 29, 2008 at 12:59 pm
Move further north to Darien or Westport and get more for your money. I take ALMOST all my Greenwich clients at that price point and move them up the line. (But of course, I also cover those towns so I don’t have a “vested” interest in keeping anyone in one place).
You get super schools, beach, a great commute, low taxes (Darien), and more house. I am sure Christopher will have a different opinion about this though…
But I BET we will both agree that you should buy this year and negotiate hard.
December 29, 2008 at 2:00 pm
If you enjoy a “great commute” from either town, you either drive east each morning or you’re working the night shift. It’s one thing to suggest that lower prices can be found elsewhere but it’s just silly to deny the reality of I-95. Most buyers I deal with have eyes and know how to tell time, a combination to figure out what it would be like to get to Greenwich in the morning, whether or not I tell them the truth.
December 29, 2008 at 2:33 pm
Thanks for the info and thanks for the additional posting on specific houses. Not interested in Darien because I have a “vested” interest in being in Greenwich although I would be curious as to your opinion on buying in 2009….you think it will be somewhere near the bottom?
December 29, 2008 at 2:44 pm
I sure hope so, but who the heck knows? I’m thinking, or maybe just hoping, that we’ll see prices bottom out sometime by July and then bump along the bottom for awhile before beginning a slow upward climb. But if I knew how to predict the future, I’d be out buying or selling options – I’m not.
I do think that a good price obtained by some hard bargaining next year will at least protect you from disaster in the ensuing years. And, presumably, you want somewhere to put your family anyway.
December 29, 2008 at 6:44 pm
A house is worth what it is worth. If I want to put my house on the market for 10x what my neighbor’s almost-identical house sold for it’s my right. All I have to do is find >1< buyer stupid/desperate enough to pay it and if I don’t have to move in the next 50 years it’s my right to be completely unreasonable.
That being said if you DO have to sell your house some time before the Heat Death of the Universe you must bow to reality and pay attention to the market. There’s some wriggle-room in there: Just because the houses around you are selling for thousands less your asking price may not be totally crazy. You remodeled, you updated, you’ve taken perfect care of the place, and the neighbor you’re being compared to shot holes in his walls and windows before the police dragged him away. It really depends on how quick you need/want to make the sale.
December 29, 2008 at 6:45 pm
In Florida, where I live, the problem with most houses is that the owners who want to sell simply can’t. They took out typically a first mortgage and a second to purchase the home, then a home equity line for whatever. They ended up borrowing 105-125% of the home’s value at the peak of the market and the values have dropped so dramatically they can’t reduce their price to even close to today’s market value. How do you get huge numbers of folks to understand that they have to come to closing with literally hundreds of thousands of dollars in order to sell their home? Hence the reluctance to reduce prices to something realistic.
December 29, 2008 at 7:24 pm
So Mary – what is the solution? – the property is devalued at least 30% (I live in Los Angeles) even according to the tax assessor’s office and most people have first, second and refi – 120-130% of the value of the house DURING the boom, – now it is at 70% (of the boom price), leveraged to the hilt and the homeowner is stuck – doesn’t that mean “walk away from the house” and foreclosure – then why aren’t the foreclosure sales reflecting this devaluation then (which by theory would mean that the rest of the values of the homes would drop also). Isn’t it the bank’s fault of not moving the foreclosures (with the current demand pricing) that is causing the problems?
December 29, 2008 at 7:37 pm
I am a condo builder in Manhattan and presently shopping for a primary residence in the Hamptons. Prices are still ridiculous on both ends: Manhattan prices are holding but volume is down dramatically, I can name five new projects off the top of my head that have stopped due to lack of financing, two after the foundations were put in; there are some builders out there in a world of hurt.
The Hamptons are akin to Alice Wonderland: there are people walking away from $300/sf mortgages and the guy next door has his house listed for $600/sf. Surreal. Dumb. Waste of time. There is nothing that will change a home owners mind about the value of his house other than time, lots of it. So we aren’t even near the bottom yet in the Northeast. Third quarter results for the Hamptons showed an 11.1% third quarter drop from the previous quarter and a 27.5% third quarter drop year over year in Southampton.
Are we there yet. Nope. If you have cash rent for the rest of the year, or pursue short sales, no reason to catch a falling knife.
December 29, 2008 at 7:43 pm
And anonymous in Greenwich, find out the major lenders in that area, probably the remnants of Wachovia and WaMu, and contact the “loss mediation department.” They have thousands of foreclosures and would love to do a nice quiet sale with you. This is commonly known as a short sale where you buy the house for less than the loan. Don’t buy retail in a declining market, forget the brokers, they’re unusually clueless in a down market. And yes $1M is plenty.
December 29, 2008 at 8:11 pm
Ronald – I don’t think the banks can come close to keeping up with the foreclosures. They’ve never had the personnel to handle the quantity they’re seeing. And the move slowly. This hurts them with appraisals, because 1 month later, the house is worth less due to comparables. Considering it can take 6 months for a bank to work through a short sale… I think they’re a bit overwhelmed. And considering short sales and foreclosures are about the only thing selling, and (slow) banks are the ones selling them, the prices are constantly behind “market price.” And this with banks usually offer foreclosures for 10-15% below what they think is the current market.
Plus there are only 3 types of buyers at the moment, none of which are sufficient to help the market.
1. First time home buyers who are sick of living at home and don’t want to wait anymore. They have a lot of incentive to wait, can’t afford much even under normal circumstances, and the economy is a bit spooky. (I myself fall in this first category: I’ve had an offer in on a house since the end of Aug. Five months and 3 appraisals later, and I’m still waiting)
2. Real Estate speculators who think we’re close to or at the bottom. They’ve been burned already in a couple cases (this summer in California in some places).
3. People who MUST relocate due to employment or marriage or whatever. These are the ones that are really taking it on the chin: they HAVE to price their existing house to sell, which means they take a big hair-cut because they’re competing with foreclosures. And they have the misfortune of buying relatively high (the housing market hasn’t bottomed yet).
As I understand it, move up buyers (sell their current house to buy bigger & better) are the primary drivers of the real estate market. You and Mary pointed out why they aren’t a significant factor, and they won’t be for some time.
I tend to get my information from a few places. One of my favorites is:
http://mrmortgage.ml-implode.com/
Hopefully he is more doom and gloom than is merited, but much of the information and insight he provides is interesting.
The other one I tend to read is:
http://recomments.blogspot.com/
An interesting take on the situation as well.
Just my $0.02
December 29, 2008 at 8:32 pm
[...] PRICES: Still too high? I think so, and I’m surprised at how unrealistic sellers still seem to be. I’m seeing [...]
December 29, 2008 at 9:00 pm
Christopher
I agree with your post and your opinion regarding prices…just a few days ago I wrote an article on one of my blogs entitled “Mortgage Interest rates continue to fall…life support for the ailing real estate market but not the cure” ( http://realestateconsumernews.com/financing/home-mortgage-interest-rates-continue-to-falllife-support-for-the-ailing-real-estate-market-but-not-the-cure/ )
My article addressed the 4-point plan being pushed by the National Association of REALTORS(R) to congress which includes the Treasury buying home mortgage rates down to 4.5%. My feeling is interest rates aren’t the problem (we are already at record lows) I think the problem is price…it appears you and I are on the same page.
http://realestateconsumernews.com/financing/home-mortgage-interest-rates-continue-to-falllife-support-for-the-ailing-real-estate-market-but-not-the-cure/
December 29, 2008 at 9:08 pm
I plan to buy my first home in 2009. I attended a seminar for first-timers given by the mortgage specialist at my credit union.
He said that banks don’t clean up foreclosures because they don’t expect to make back the cost of doing so. There are so many foreclosures compared to the number of buyers who will take them.
He also said that banks are seeing a new phenomenon: foreclosures that have been vandalized by the former owners. Apparently this used to almost never happen, now it’s fairly common. The cost of repairing these homes is so great (all the plumbing ripped out, for example) that it’s really not worth it.
December 29, 2008 at 9:26 pm
ACH – I agree completely – I’m working on a post which will probably get up tomorrow, on the failure of banks to assign any talent to property disposal and how that makes it almost impossible to match buyers with houses that need to be sold.
December 29, 2008 at 11:14 pm
“What would be your specific advice to a client with a family looking to buy in Greenwich in the $1 million range? Is there anything on the market in a good, family neighborhood that you think is priced to sell?”
And there lies the problem. A house in a “good, family neighborhood” should not cost $1 million. It should not cost $500,000. The fact that some people think $1 million is a reasonable price means that there is still a long way to go. Hint: Nice family houses in good school districts in Fairfield County were going for $90k in 1978.
You people in the northeast with recent mortgages are SO hosed. What were you thinking?
December 29, 2008 at 11:17 pm
I am not a realtor but I am trying to sell my parents home in Armonk, New York. It is close to Greenwich and the price is under $1 million. It is located within the Windmill Farms area. A link describing the property is above. My blog is located at: http://diplomatdc.wordpress.com/
December 30, 2008 at 4:22 am
The low interest rate combined with interest only payments to get through the bad times could allow a good percentage of mortgages to survive until some equity returns (might take 7 to 10 years though). At least the mortgage companies wouldn’t have to write off the mortgage, and the books would look better (but the cash flow would take a hit).
Maybe a lot of houses were so overpriced that even interest only payments won’t work.
Comments are closed.