Gone

It’s Not Coming Back For You
I spent a number of weekends last fall working with a young couple from Long Island who wanted a house in the $1.3 million range. There were plenty of houses to show them that fit their needs; unfortunately, they were all in the multi list books for the Spring of 2001 and not the fall of 2002. By the time this couple arrived, the market had moved past them and there was nothing that they liked.
They rejected my advice that they buy something that they didn’t like and fix it up; the husband, being a Wall Street whiz, was sure that prices would fall over the winter and he could return in the spring to pick up a bargain. Hasn’t happened, and it wont happen. The New York Times recently ran an article explaining why. Interest rates, for one: in constant dollars, the monthly mortgage payment for a $183,000 home in 1988 was actually more than the payments for a $330,000 home in 2003 ($2,019 vs. $1,519). Buyers can pay owners or banks; as the payment to the latter decreases, the price paid to the former goes up. Another factor: there is no more land. The article, citing statistics from the National Association of Realtors, notes that the Atlanta region saw one single-home permit issued last year for every 81 residents; in the NY metropolitan area, it was 1 for every 735. Nationally, over ten years, one home has been built for every 1.6 new jobs; the metro area saw 1 for every 16 new jobs.
What all that says, to me, is that we will continue to see escalating prices in Greenwich. First time buyers disagree, particularly the Wall Streeters. They hesitate, defer, and are convinced that prices will soon fall. My answer to that is (a) people have been making, and losing, that same bet since the rail roads first arrived in 1848; and (b) wasn’t it Wall Street’s best minds who brought us the dot com miracle?

In Town Listing
Readers of this column have noticed, I hope, that I tend to avoid plugging Round Hill Partner’s listings—the advertising section is over a few pages to your right—but it would be unfair to completely ignore certain exceptional homes just because I write a column. So: we’ve just brought on to the market a classic, 1929 home at One MacPhearson Drive, asking price $2,895,000. Sitting nicely on acre and a half of lawns and gardens, this home could use a new kitchen and baths and, possibly, a new wing for a modern master bedroom suite (plenty of room to accommodate it) but it has all the great things homes of this era should have: beautiful moldings, gracious room size and wide hallways. The yard sweeps around all sides and feels positively huge; you’d never guess that you were five minutes from downtown. And the price is right. Modernized, this home on this street would easily support a $4.5 million asking price, and you’ll spend far less than that bringing this home into the new century.
Don’t Touch That Button!
Greenpoint Mortgage, a national mortgage lender (and a good one) recently decided to upgrade its computer software. The software was loaded, the computers restarted and . . . zilch. Every scrap of information they had disappeared into the ether or wherever it is data escapes to and for a solid week Greenpoint couldn’t print documents, make loans, etc. Now, if you’ve ever been involved in a real estate transaction where your buyer had to sell his house in, say, Indiana in order to buy your house, and his buyer had to sell his house and so forth, you’ll have a decent idea of the havoc created across the country when a major lender takes a week off. Anyway, they’re back in business now and loans are again being extended, but I wonder where that poor programmer is and what he’s doing with all his free time.
Great Moments in Real Estate Listings
There is a condominium for sale in Old Greenwich described on its listing sheet as a “three-story townhouse”. While technically accurate, most people would probably not guess that the first floor is comprised solely of a narrow, dark staircase leading up. The same advertising principles that condemn this practice, by the way, also frown on describing “beautiful pool views” if the body of water in question lies entirely on your neighbor’s property.

Gazumped! According to the “Word Detective” (www.word-detective.com ) "Gazumping is the despicable practice of a seller agreeing to sell a property to one buyer, and then accepting a higher bid from another buyer and dumping the first buyer. Although this usually happens before the final sale contract is signed, it is still considered highly unethical behavior on the seller's part.”
Sadly, the Word Detective is wrong, at least in so far as he believes that gazumping is still considered highly unethical. When I first returned to town to practice real estate law in the early 1980s sellers who reneged on their word did so with an air of shame and pled some exceptional financial pressure. Not so now. Gresham’s Law that “bad money drives out good” applies to morals, too, and sellers these days simply refuse to believe that their verbal acceptance of an offer means anything at all. While that is too bad, what it means for you as a buyer is that you have no deal until the seller has signed a contract. His verbal assurances are worthless, and you would be wise not to spend a dime on building inspections, architectural designs or anything else until you have a fully-executed copy of a sales contract in hand.
What you can and should do, however, is to apply for pre-approval from a mortgage lender before you begin looking for a home. That way, if you find something to bid on you can possibly waive a mortgage contingency and move straight to contract. The fewer contingencies in your offer, the more likely that it will be accepted and, more important, agreed to in writing by the seller.
Brokers I respect usually urge their sellers to hold higher offers in reserve as a backup, thereby keeping the first buyer’s feet to the fire in terms of negotiating. When, as is often the case, the sellers reject their broker’s advice and insist on breaking their word and going for top dollar those same brokers will either offer the first buyer a chance to meet the new bid or conduct a “final and best” round of bidding. Nasty brokers do neither; they shop the bid and run an ever-escalating bidding war until one buyer says phooey and walks away. The bitter taste this leaves in all buyers’ mouths makes the ensuing relationship between buyer and seller contentious and difficult. And if that deal falls through and the seller turns to the original buyer, he may well find that he has lost that person, too. Which serves him right.

The Week’s Activity
Unless you’re the owner of a home that sold (or a buyer who was gazumped) , this past week has been pretty dull. David Ogilvy’s office brought on two big ticket items of note: Jane Basham’s listing at 35 Andrews Farm Road ($16,000,000) and Dancy Cassell’s at 58 Dawn Harbor Lane in Riverside for $15,500,000. Both are nice and each is different. The Andrews Farm property is 10,000 square foot brick Georgian built in 1989, beautifully renovated in 1997 and set on 12 acres of Back Country lawns and gardens (with an additional 8 acres of conservation land). The listing claims a “major staircase” which is better, I suppose, than a general nuisance, and the grounds are outstanding. My only complaint, and one that is entirely personal, is that the approach to this beautiful home is blighted by some of the worst examples of architectural excess I’ve seen in recent memory. But that’s a quibble, and you certainly can’t see your neighbor’s lousy taste once you’re ensconced in your own land, so the heck with it; drive home after dark.
Dancy’s listing is, as the price suggests, right on the water with spectacular views of Old Greenwich Harbor, Tod’s Point and Long Island Sound. Built in 2000 and designed by that great architect, Mr. Alex Kaali-Nagy, every room is just right. Five bedrooms (with room for more), six baths, including two in the master suite, comfortable kitchen, great, private pool and so on. This being Riverside, the acreage is a mere 1.89 instead of the Back Country’s more generous sizing, but the money you’ll save on landscaping should cover the mortgage. The gardens are beautiful, the flow is perfect and, if it weren’t for the fact that the house sits on a former meadow that once afforded the neighbors their own share of those spectacular views, it would be my favorite house in Riverside. Which only tells you to buy your view because if you don’t, someone else will. Nice house.

Summer Slow Down
Whatever I said last week about new listings tapering off can be multiplied now. The open house showings (for brokers) are dwindling and, while there are some price reductions going on, little that is new is appearing. But houses continue to sell. Fifty-eight Washington Avenue finally sold for $735,000 and will make someone a wonderful home. The new owners have already stripped the rusting screens from the front porch and instantly doubled the house’s appeal; if the seller had done so originally, he probably could have sold it last fall. Sixty-six Bedford went to contract ($1.350, Evan Salmore) and so did 57 North Maple ($1.7, Sally O’Brien), 43 Deepwoods in Old Greenwich ($1.825, Sally O’Brien again), 472 North Maple ($2.725, Erin Waterman), 297 Round Hill ($4.7, Sally Maloney), 37 Rock Ridge ($5.2, Renee Gallagher and Joann Erb—they’re both my bosses so they each get mentioned), 869 Lake Avenue ($6.0, Muggs Erwin) and so on. There are still plenty of houses out there but they’ve been picked over pretty thoroughly and unless their prices come down, I’d expect that sales will start slowing as buyers await better offerings in the fall.
Save This House!
Wilson Alling has just listed a wonderful property at 350 Riversville Road. Built in 1852, the house has barely been touched in the ensuing years. The original windows, double-hung but fashioned to look like casements, are still there, as are the original moldings, cast iron summer fireplace screens and exterior ornamentation and beautiful detailing, inside and out. The house sits high on a hill on 1.75 acres, next to an 1832 Greek revival home. The latter is also on the market for $2.65 million. If the 1852 house is restored, the two homes will compliment and grace each other and perhaps make each worth even more. This house sags a bit and has a fair bit of rot, as will we all when we reach its age. It could probably swallow three-quarters of a million dollars for repairs and modernization but it’s priced at $1.195 and, restored, would easily be worth $2.2. I know of no other home currently on the market that offers so much untouched, unmuddled original beauty but I fear this one may be destined for the bulldozer—the land alone is worth the asking price. If so, our town will have lost a grand home and suffered a sad diminution. Know any restorers out there? Call them up and tell them that the perfect house has appeared.
Dumb Quote of the Week
A friend of mine in another town was considering whether to accept her broker’s advice (not mine) on pricing her house. Her brother counseled her to add a couple of hundred thousand to the price because “brokers are just interested in moving inventory”. Well yes, in a way, but isn’t that the seller’s goal too? After all, if you merely want to keep your home sparkling clean and open to strangers then don’t bother listing it at all; stick a public open house sign on your front yard on the weekend and bring in the world. But if you want to actually sell your house, then set a good price and move that thing. As for under-pricing, you should only hope that you’re just a touch below market value, because the market will always correct a low price by attracting bidders; it doesn’t work the other way.
What to Buy
A reader has written to inquire about low-priced housing as he’s feeling priced out of the market. He has my sympathy. He didn’t give his price range, but, right now, there is exactly one house on the market for less than $300,000: Gussie Tipper’s listing at 151 South Water Street for $299,000 and, judging from its picture, it could use some work. Other than that, I’d advise the low end buyer to look at condominiums because it’s the cost of land in Greenwich that drives up the prices and condominiums, naturally, spread that cost over a number of units. The Commons at 1465 E. Putnam Avenue for instance, begin in the mid-twos and climb from there. They provide a reasonable value, I think, and work well for singles or couples. Sadly, a family looking for, say, a four bedroom house below $300,000 is simply out of luck.

The Dog Days of Summer
The rains have finally stopped, at least for the moment, and the market has slipped into dormancy. Greenwich brokers have jetted off to their summer homes on Nantucket and Fishers Island and (practically) no one is watching the store. This can be a good thing for buyers, as there is less competition for those few houses that do come on that are priced correctly. A few weeks ago any well priced home instantly attracted multiple bids, frustrating to buyers and delightful, of course, for sellers. Now, there’s a reasonable chance that an attractive home will linger for a few weeks, unnoticed, giving buyers an opportunity to pursue it alone. August and the week between Christmas and New Years have always been good times for bargains; July is a close second.
What’s That You’re Smoking?
One home that did come on the market recently is of a “non-traditional” design—always a tough sell in Greenwich—and located on a less than desirable street down a long, long driveway. That’s three strikes, but the owner apparently likes a challenge because he has insisted on pricing his house a full third higher than it’s worth. How do I know that it was they buyer, and not the broker who was responsible for this foolishness? Because the broker had slips of paper ready at the open house asking us for our opinion of the price. That’s a sign of a broker who won the listing battle but lost the pricing war; he’s hoping to use our collective wisdom as ammunition against the owner. I was kind, suggesting that the house was only $800,000 over-priced. Other agents I spoke with thought $1.2 would have to be shaved off before it sold. If you’re interested in buying this place but worry that you’ll be away all summer, don’t fret: this one will be waiting for you in September.
But On the Other Hand
One house that won’t wait for you and may well be gone by the time this article is published is Dancy Cassell’s listing at 17 Copper Beech (off North Street) for $3.995. The present owners took a converted brick carriage house and stable and performed a complete restoration and modernization with fabulous results. Copper Beech is a secluded, dead end street and this home provides an additional level of privacy with it’s enclosed court yard and pool. The house itself is just beautiful: open, airy and flowing seamlessly from end to end. In my next life I think I want to come back as Dancy because she consistently gets some of the most interesting, fun listings in town.
Missed It!
One Lockwood Avenue in Riverside (Jeff Bell) has finally gone to contract somewhere in the $1.2 range. I’ve watched this house as its price slowly settled and I’ve considered it a good buy for quite awhile now. It is a little plain on the outside but a couple of dormers and a front porch will solve that and create a very nice house on a 1/2 acre. Not bad.
See No Evil
Betteridge Jewelers had three watches lifted from its display window recently by a guy who cut through the glass and helped himself. Not all that unusual, I suppose, but the perpetrator worked his malfeasance in broad daylight, less than a hundred feet from a cop directing traffic; so close that the officer could have reached out and loaned him a glass cutter. It will only offend Lieutenant Keegan to raise this topic again, but if his tricycle terrorists presently cruising Tod’s Point were reassigned to the Avenue, both the beach and our downtown might benefit.
What Would We Do without Experts?
The New York Times reports that the Federal Reserve Board of Boston recently invited a quartet of behavioral economists (who argue that emotion plays a huge role in people’s economic decisions) to address a meeting of more traditional economists. The latter, it seems, have exhausted their mathematical skills in trying to explain and predict human behavior and are looking for new solutions. This is a promising development; I have long thought that the mathematicians hijacked Adam Smith’s field and eviscerated it, but the Board didn’t need to summon four Noble winners for this insight. They could have just as easily spent a day or two with real estate agents and their clients and witnessed the phenomenon for themselves.