Saturday, October 28, 2017

Homeowners Predicting Gains in Home Values

Greenwich, CT: Extraordinary stone manor home set on 9.4 acres, $8,9 million
More than half of U.S. homeowners expect their home’s value to rise in the coming year. For Greenwich real estate watchers who track public sentiment as a market indicator, the news comes as a welcome addition to other reports of rising consumer optimism regarding the economy as a whole.

The finding comes from a national telephone and online survey conducted earlier this month by the Rasmussen Reports organization. It signals an acceleration in a year-long trend of rising expectations among U.S. homeowners. A year earlier, fewer than 40% had predicted that their own home values would rise in the coming year. In this latest report, that number has increased to 53%—a leap of 12% over the March finding. According to Rasmussen summary, this amounts to “a record high” in optimism about future home values.

Greenwich homeowners who plan to list their own properties in the immediate future have reason to welcome measures of positive expectations. When most people expect Greenwich home values to rise, buyers are apt to view current market prices in terms of their investment potential. This can prove to be important—especially when values have been on the rise for a while.

This latest Rasmussen finding was all the more impressive in that it marked the first time in eight years that a majority of those sampled expressed optimism about future home values. It is in sync with a heavy majority of industry prognosticators who predict home value increases in the coming year.  It’s always good news when there is general agreement that Greenwich home values are expected to continue to rise.  If you would like a complimentary market assessment or are in the market for a home,  contact me.

Monday, October 16, 2017 Now Offers Homes?

Amazon has invaded the realm of real estate— in a tiny, but maybe forward-thinking way.
Last week the improbable news arrived that the web’s 400-pound gorilla had made its first foray into the realm of real estate. Since Greenwich real estate (like all real estate) is by definition local, its very nature would seem to preclude the buying and selling of homes as a mail order enterprise. But since has succeeded in other industries where failure had been assumed (high-end fashion, for instance), could local Greenwich real estate soon be monopolized by a tsunami of Amazon Prime home sales?
It turned out that Greenwich real estate was not likely to be overcome anytime soon. The Amazon listings that showed up are hard to find, and not likely to tempt many Greenwich home shoppers. The few listings were only searchable when you entered “tiny homes”—and the few homes being offered were sandwiched in between how-to books about designing and building very small cabins . (Here, a note for Greenwich residents who aren’t familiar with the “tiny homes” phenomenon…they are what the name says: structures smaller than 400 square feet…although some can be as microscopic as 80 square feet, most are in the 300-350 range). 
You may not find too many tiny homes in Greenwich, but the movement is nation-wide. And the concept is not as far-fetched as it might seem. Anyone who has taken weeks-long vacations in campers or lived for any stretch of time on a pleasure boat knows that you can reduce your living space to a slender minimum if you plan carefully.
Back to Amazon. The lead-off listing was a pre-fab tiny home converted from a shipping container. Like any good Greenwich real estate listing, the details pointed out key selling points (in this case, the shipping container was new). Price was a thrifty $36,000, which would be even more thrifty if the “$0.00 estimated tax” turns out to be accurate. The customer reviews were mixed, with one in particular naming a possible sticking point: meeting Connecticut and Greenwich building codes. Additionally, Amazon Prime members who revel in their free delivery perk were bound to be disappointed: the tiny home wasn’t eligible (they’d have to pony up another $3,754 in shipping fees).   Looking for a property a bit bigger than what Amazon offers?  Call!

Robin Kencel, Associate Real Estate Broker and Global Advisor
The Stevens Kencel Group at Douglas Elliman Real Estate
Greenwich, CT      203-249-2943

Saturday, October 7, 2017

The Obamas Latest House Buy?

The Obamas are at it again-- house shopping.  

This time, according to the NYPost's page six, they are eyeing 10 Gracie Square.  This upper east side white glove service building has been called home to many illustrious people, including Gloria Vanderbilt, conductor AndrĂ© Kostelanetz and New Yorker critic Alexander Woollcott.  Most important-- and surely on the President's "wish list" is an indoor basketball.  An apartment in the building recently went to contract in the $10 million range.

Message to Mr. and Mrs. President before the Gracie Square deal is consummated: You could have a truly presidential property just 28 miles north of the Big Apple.  

Check out 15 Reynwood Manor.  
Located in bucolic, gorgeous, sophisticated Greenwich Ct.   Reynwood Manor is the same era as 10 Gracie Square, way more square footage, no comparison on the land, and boasts indoor and outdoor pools. At $8.9 million, you have plenty of left over money to build a basketball court and a first rate gym.   Think about it-- and call me. 

Monday, October 2, 2017

Is Game Theory Relevant in Real Estate Negotiating?

Game theory is a seriously studied logical field that mathematicians delve into. Interestingly, when you study how to develop successful negotiation tactics—Greenwich real estate negotiations included—you can look at them via game theory.

There is a problem, though. The further you get into the subject, the more it tends to become more and more abstract. It isn't too long until you begin to wonder what the practical application is.   Because Greenwich real estate negotiations are anything but academic exercises, I can’t recommend spending hours studying “The Prisoner’s Dilemma” or any of the other highly touted game theory games.  And you don't need to.  In fact, you can start with one basic pre-condition necessary to develop a winning game plan. It is this precondition that has to exist in order to execute any winning game plan. In game theory, this is called the assumption.

So here it is:

The assumption that’s necessary for developing a successful negotiation strategy is that all the parties must be rational. They have to be trying to make decisions (game moves) that are intended to benefit themselves. In Greenwich real estate negotiations, that usually consists of paying or receiving the least or most money in the most favorable timeframe.
So the takeaway from game theory’s application to Greenwich  real estate negotiations is both simple and useful in the real world: 

1. Remain rational yourself.   In the course of negotiations, if your thoughtful proposal isn’t accepted, don’t get mad—even if it’s maddening. Stay cool; acknowledge that you’ve considered the response, and develop the best counter that is in your interest. 
2.  Foster rationality in the other party.  Even if they fly off the handle for what seems to be no reason, assume there IS a reason—but it may not be one that’s rational or even directly connected to the bargain under discussion. It can even be due to misconstrued communication. In the heat of the moment, it’s easy to forget that emotions can block self-interest—but even fiery emotions can be quelled when met with calm and reason. 

Your realtor should be setting a tone of quiet confidence, competence, and ease around the transaction.  The stronger the rational front is that you both extend, the greater the chances that the other party will fall in line with the same manner of thinking and operating.

Tuesday, September 19, 2017

The Latest on Greenwich Mortgage Rates

A couple of weeks back, the ultimate authority on Greenwich mortgage rates hadn’t minced words. That was Freddie Mac, whose opinion about mortgage rates constitutes the final say in the matter. Freddie isn’t modest about its preeminence (Freddie’s trademarked corporate slogan is “We make home possible”). Together with sibling Fannie Mae, the quasi-governmental entities stand behind 60% of U.S. mortgages.

Each week their PMMS survey collects data snapshots from thrifts, credit unions, banks, and mortgage lenders to gauge of the direction of the home loan market. Future Greenwich home hunters and the homeowners whose properties are found in the current listings are constantly affected by those ups and downs.  Naturally, the rate averages vary from lender to lender and state to state—but it’s the direction in which mortgage rates are headed that can be a spur for buyers. Either direction can cause activity. When rates rise quickly, buyers can be incentivized to lock in rates before they get out of hand. When they fall, that inducement disappears—although a shrinking monthly payment number does create an increasingly affordable scenario. Low rates create an encouraging “price is up, but cost is down” situation.

The week before last, Freddie’s headline had been an unequivocal piece of favorable news for Greenwich buyers and sellers:

“30-Year Mortgage Rate Hits Another 2017 Low.”

But last week’s follow-up failed to live up to the expected slight rebound . Freddie’s headline on Thursday was neither fish nor fowl, up nor down. It was the third possibility, where mortgage rates don’t go anywhere: they just sit there, deadpan as a professional poker player, revealing nothing.

The U.S. weekly average was still 3.78%, tying the low for the year. For Greenwich  buyers who may have missed out on locking in the previous week’s home loan bargain rates, the reprieve was welcome news. Whether the expected rebound is on the way remains to be seen.  With rates holding at historic lows, it creates an undeniably auspicious market opportunity in Greenwich.

Monday, September 11, 2017

The 1-2-3-4's of Home Buying

What a simpler world it would be if Greenwich home buying could be reduced to a simple 4-Step process. Even better if those were four easy steps. Actually, without coming out and saying so, that’s the tantalizing prospect hinted at on radio financial guru Dave Ramsey’s website’s “Home Buying Process Made Easy.”   Ramsey is the likable media expert in household budgeting and financial planning. A good deal of his guidance could be summed up in just 2 steps:

1) Get out of debt (except for mortgage debt) as soon as humanly possible; then, 
2) Stay out.

203 Clapboard Ridge Farmhouse with Modern Addition
Since that’s not bad advice, the promise of home buying in 4 steps seems almost reasonable. After all, his millions of listeners have undoubtedly benefitted greatly through the years (once they’ve figured out a way to act on the advice).  And in fact, his 4 home buying steps are actually not far off-target—although I think they’re out of order:

1. Put your finances in order before home buying-- which should lead you to know what you can afford.
2. Do the cash flow math. Ramsey thinks your Greenwich home’s monthly mortgage payments should be no more than a quarter of your net income.
3. Get a home loan. Make this a 15-year fixed rate mortgage to minimize total interest paid.
4. Use a good real estate agent-  To make sure you are paying at or below fair market value and deal with any “unexpected home buying hurdles.”

Realistically, Greenwich home buying has a bit more involvement than these 4 steps and Step 4 should actually come after Step 2, and Step 3 (getting a mortgage) should come after you have zeroed in on your target Greenwich  home.

On a practical note: the 15-year mortgage structure automatically results in a higher monthly payment that, when combined with a 25% of net income budget cap, could yield an unrealistically limited budget target. Being financially conservative also means being realistic. A growing family, for instance, might find that they have wasted money if they have to move to a larger home after only a few years. 

Tuesday, September 5, 2017

Five Ways The Real Estate Marketplace Changes In September

New To The Market: 203 Clapboard Ridge, Renovated and Expanded Farmhouse $3.195 Million

A while back, Forbes noted what they called “The Four Ways the Real Estate Market Changes” after Labor Day. Between Labor Day and Thanksgiving, Fall's change of season alters the house hunting landscape.

In Greenwich, Forbe's  broad brush proposition that a great number of house hunters throw in the towel after Labor Day is simply not true, in fact, it is our second strongest selling season-- right behind the Spring market. I suggest that there are five market changes  supporting a healthy Fall selling season-- and reason to list your property now. 

1. More of a buyer’s market. Buyers who have held off through the prime Spring selling season are more apt to find sellers who are more open to negotiation. 
2. Action increases for second homes. This is prime time for out-of-towners to consider a home that puts them near New York City and the beach.  Greenwich has 28 miles of coastline and a spectacular beach, Tod's Point.  What's more, it's just 48 minutes by train or car to Manhattan.  Those who have battled the drive to the Hamptons all summer are discovering that Greenwich is a viable option for beach, luxury amenities, and quick access to the Big Apple.   
3. Price dips. House hunters find that asking prices, like the autumn leaves, fall.  Sellers who have been thinking of a price reduction and have held off during Summer, come back at Fall market time with a price reduction, hoping to make a sale before the holidays.  
4. Open-ended house hunting. Time pressures (like having to be moved in by the first day of school) will have vanished by Labor Day, so many Greenwich house hunters tend to adopt a more leisurely house hunting attitude. There may also be something about crisp autumn days (and they’ll be here soon enough) that helps contribute to a more relaxed atmosphere—at least until the holidays loom! 
5.     New Inventory.  Many savvy realtors hold back new inventory after Memorial Day, knowing the summer is the quietest season, and introduce properties right after Labor Day.  My team has 6 terrific new properties coming to the market in the next few weeks.  This means more choices and fresh selection for buyers.

Every Greenwich buyer has specific and individual goals and expectations—and of course, the same is true for sellers. But it does seem to be true that post-Labor Day, Greenwich listings tend to include an uptick in price reductions—as well as some withdrawals that, as Forbes might have it, “will sprout anew” come springtime.

If your busy summer included activities and travel that kept you fully occupied, now may be an opportune time to inaugurate or resume your Greenwich focus. And contact me if you would like to a pre-market glimpse of what our team has coming.