Big Houses I recently had occasion to run the numbers on large (expensive, at any rate) house sales and was a little surprised to see that, as of this week, forty-eight homes have sold for prices ranging from $4,200,000 to $6,800,000. Four more are under contract, putting us at fifty-two total, a bit ahead of last year’s forty-five sales. Not too bad, considering that ,for a long period in 2002 the five million dollar and above market was essentially dormant.
Medium Houses
On the other hand, the inventory of homes priced between $1,500,000 and $2,500,000 has pretty much been sold out and nothing new is coming on the market. For the month of October, exactly sixteen houses came on in that range. Weed out the hopelessly over-priced and you’re down to about four. And if you won’t live in Riverside, Old Greenwich or Glenville, you’re definitely out of luck: there have been exactly zero houses added to the mid-country inventory in what is usually our most robust price range. This is all rather frustrating for buyers and agents alike; the existing inventory has been picked over and rejected for a myriad of reasons, some good, some silly, and there is nothing new to show. Leads to cranky weekends spent in the car.
You Can Lead a horse to Water
But a pencil must be lead. I deal with a large number of Wall Street types in this business; the out-of-towners among them are often difficult clients because, not having the benefit of having lived in town and watched their house appreciate, many of them are convinced, absolutely convinced, that house prices will fall in the near future. So they wait, watch the market move past them and they never buy. I mention this because I also have a number of clients who are new to this country and they, having sized up the neighboring towns, all want to own real estate in Greenwich. I share their optimism so I wonder: what is it that a Harvard-trained MBA doesn’t get that someone who works three jobs, eighteen hours a day, does?
Little House on the Prairie
My firm recently listed a small cottage on ten acres of land in Conyers Farm for four million dollars. The owner’s (and our) expectation was that this was to be a land sale, with the cottage thrown in as a lagniappe. We were astonished, therefore, by the flood of calls from serious buyers who were perfectly willing to spend four million dollars for a secluded cottage on lots of land. Unless you move our listing’s cottage, that’s not us: it was the old gate keeper’s house for the original Rosenstiel estate and sits quite close to North Street. But I mention the experience because it reveals a market niche that I, at least, did not know existed in Greenwich (Wyoming, yes, but Greenwich?). I don’t know if the economics work out, but anyone sitting on a large spread of land might want to consider building a few modest cottages and selling them off to down-sizers. Judging from conversations we had with so many eager buyers, there is a market there.
Jargon
As a writer and a speaker of the English tongue, I despise jargon—arcane terms used by insecure people to puff themselves up and exclude those who “don’t get it”. That said, I reluctantly introduce the term “price point” into the discussion because I can’t think of a better word. A price point, as I use the term, anyway, is that specific spot where buyers balk. They exist at several locations in our housing market and they change over time; when I was practicing real estate law in the mid-eighties, for instance, $250,000 was a real price point dividing buyers. That price point no longer exists, but others have taken its place. For instance, houses priced at $2.3 million or $875,000 will draw more bidders than houses with price tags of $2.5 or $925,000. Sellers with an aggressive personality (ex-trial lawyers come to mind) often don’t get this; they’ll bid on anything, at a price they think is right, and assume that everyone else will too. But the world, thank God, is not exclusively peopled by ex-trial lawyers. Many would-be buyers see a house that they like, look at the price and walk rather than bid. So my advice to sellers is, if your house isn’t attracting bids, take a look at its price and consider moving it down below the next price point. I promise you that your showings will increase and you’ll start receiving bids.
Medium Houses
On the other hand, the inventory of homes priced between $1,500,000 and $2,500,000 has pretty much been sold out and nothing new is coming on the market. For the month of October, exactly sixteen houses came on in that range. Weed out the hopelessly over-priced and you’re down to about four. And if you won’t live in Riverside, Old Greenwich or Glenville, you’re definitely out of luck: there have been exactly zero houses added to the mid-country inventory in what is usually our most robust price range. This is all rather frustrating for buyers and agents alike; the existing inventory has been picked over and rejected for a myriad of reasons, some good, some silly, and there is nothing new to show. Leads to cranky weekends spent in the car.
You Can Lead a horse to Water
But a pencil must be lead. I deal with a large number of Wall Street types in this business; the out-of-towners among them are often difficult clients because, not having the benefit of having lived in town and watched their house appreciate, many of them are convinced, absolutely convinced, that house prices will fall in the near future. So they wait, watch the market move past them and they never buy. I mention this because I also have a number of clients who are new to this country and they, having sized up the neighboring towns, all want to own real estate in Greenwich. I share their optimism so I wonder: what is it that a Harvard-trained MBA doesn’t get that someone who works three jobs, eighteen hours a day, does?
Little House on the Prairie
My firm recently listed a small cottage on ten acres of land in Conyers Farm for four million dollars. The owner’s (and our) expectation was that this was to be a land sale, with the cottage thrown in as a lagniappe. We were astonished, therefore, by the flood of calls from serious buyers who were perfectly willing to spend four million dollars for a secluded cottage on lots of land. Unless you move our listing’s cottage, that’s not us: it was the old gate keeper’s house for the original Rosenstiel estate and sits quite close to North Street. But I mention the experience because it reveals a market niche that I, at least, did not know existed in Greenwich (Wyoming, yes, but Greenwich?). I don’t know if the economics work out, but anyone sitting on a large spread of land might want to consider building a few modest cottages and selling them off to down-sizers. Judging from conversations we had with so many eager buyers, there is a market there.
Jargon
As a writer and a speaker of the English tongue, I despise jargon—arcane terms used by insecure people to puff themselves up and exclude those who “don’t get it”. That said, I reluctantly introduce the term “price point” into the discussion because I can’t think of a better word. A price point, as I use the term, anyway, is that specific spot where buyers balk. They exist at several locations in our housing market and they change over time; when I was practicing real estate law in the mid-eighties, for instance, $250,000 was a real price point dividing buyers. That price point no longer exists, but others have taken its place. For instance, houses priced at $2.3 million or $875,000 will draw more bidders than houses with price tags of $2.5 or $925,000. Sellers with an aggressive personality (ex-trial lawyers come to mind) often don’t get this; they’ll bid on anything, at a price they think is right, and assume that everyone else will too. But the world, thank God, is not exclusively peopled by ex-trial lawyers. Many would-be buyers see a house that they like, look at the price and walk rather than bid. So my advice to sellers is, if your house isn’t attracting bids, take a look at its price and consider moving it down below the next price point. I promise you that your showings will increase and you’ll start receiving bids.
posted by Chris Fountain at 9:50 AM
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