Greenwih Real Estate Market Explained

WSJ: End of Housing Slump Seems to Be Drawing Near

Signs of Stability Emerge In Mortgages, Home Sales, Buoying Economic Prospects

By CHRISTOPHER CONKEY

Recent firmness in mortgage applications and an increase in new-home sales suggest the housing slump may be nearly over, limiting the risk of wider damage to the overall economy.

One indication that home-buying demand has leveled off after a yearlong decline comes from the Mortgage Bankers Association, which conducts a weekly mortgage-application survey.

Yesterday, the group said mortgage applications fell sharply last week from the week before. Even so, its indexes of applications for home purchases and refinancings have been rising steadily since summer. The four-week moving average for the MBA's purchase index, which offers a less-volatile picture of the trend, has risen 12% since August, while the four-week average for the group's refinancing index has soared more than 41% since July.

A recent pickup in new-home sales also points to stabilizing demand. The Commerce Department said yesterday that new-home sales rose 3.4% in November to an annual rate of 1.05 million units. While that pace is down more than 15% from a year earlier, it has risen since July and has held fairly steady in recent months.

Despite some continued uncertainty, economists view the recent data as an early indication that the worst of the housing market's downturn may be over. "The net of all the numbers we've gotten is that it looks like the housing market and home sales appear to have stabilized, at least temporarily, in the latter part of the year," said Thomas Lawler, a former economist for Fannie Mae who now runs a consulting firm in Vienna, Va.

If this turns out to be the case, and the housing market begins to rebound next year, the economy would be likely to benefit. The slump has been one of the biggest dampers on the nation's economic growth. In the third quarter, for example, the decline in home building and residential investment shaved more than one percentage point off the annual rate of economic growth. Many economists expect a similar reduction in the fourth quarter but expect some improvement next year.

The chances of a pickup in 2007 partly depend on whether home builders can trim their inventories of unsold homes. Last month, there were 545,000 new homes on the market, or the equivalent of a 6.3-month supply at current sales rates, according to the Commerce data, down from a recent high mark of a 7.2-month supply in July.

Home-buying activity could wane, however, if interest rates rise or other factors, such as employment or the stock market, deteriorate. Economists expect the normally quiet winter months to produce volatile readings and say the best gauge of the housing market will be whether buyers come out in force as usual in the spring.

The median price of a new home -- or the price at which half sold for more and half sold for less -- was $251,700 last month, up from $237,900 a year earlier, the Commerce Department said. The figures aren't adjusted to account for the changing mix of sales. Thus, the November reading may have been distorted by the fact that sales in the higher-priced Northeast rose last month, while sales in lower-priced South fell.

Greenwich Real Estate News - Before Moving Out

Once you have sold your home, set a move-out date, and have begun packing, time will probably seem to fly right by. All you really need to do is pack up your stuff and leave, right?

Maybe. You should, of course make sure all of your personal belongings are out, and that you have cleaned up all of your garbage. You will still have to get your keys to the new owners in whichever way was previously agreed upon, but other than that, you're not really obligated to do anything else.

You could, though. A little extra work and consideration can make moving in a lot more pleasant for the family that will be moving in. A lot of agents will recommend that the home is at least "broom swept" before you move out. Sweep the floors, get rid of cobwebs along the walls and ceiling. Take it a step further, and mop or vacuum and clean the windows and surfaces, such as countertops and sinks. You should also take the time to give the bathrooms one last cleaning.

If it has been several days since the last time the lawn was mowed, that might be a really nice gesture to consider. Rake up leaves in the fall, or, in the winter, shovel the driveway and put down some rock salt to get rid of ice.

Of course, after you've gone through all of the work associated with moving, trying to get extra work done is probably not what you want to be doing. If you can, try keep everything neat while you are cleaning, and do any necessary yard work before you start loading the moving van. Then, you will only have a few quick things (a quick sweep and mop) to get done afterwards. This can be even easier if you entirely clean out each room as you get everything out of it. Empty out a room, clean it quickly, and then move on.

If you really don't have the time, consider calling a cleaning service to give the home a once-over after you have moved out. Yard work could be handled by a neighborhood teen.

So, what do you get out of this extra effort or expense? Nothing, really, other than the knowledge that you have made moving a more enjoyable experience for the new owners. Not having to handle a lot of cleaning in the first few days after they have moved in will mean a lot.

You don''t need to scrub the home from top to bottom, but a little extra cleaning can make a great impression. You've loved living in the home you are leaving behind; make sure the new occupants will love it just as much, from the moment they walk through the door.

Greenwich Real Estate Market Explained

Pain From U.S. Housing Slump Is Likely To Linger, but Some Say Worst May Be Past

By JAMES R. HAGERTY Wall Street Journal

Just when the gloomier pundits were starting to enjoy the housing slump, optimists are piping up to declare it could be almost over.

Former Federal Reserve Chairman Alan Greenspan, whose interest-rate cuts helped create what he once called "froth" in house prices, said in a speech last week that he detected "early signs of stabilization" in the housing market. Some Wall Street economists also are saying the worst may be behind us.

Not so fast, replies Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd., a Valhalla, N.Y., research firm: "It's going to get worse before it gets better."

Both camps are making valid points. The maximum impact of falling home construction may have hit the U.S. economy in the third quarter, some economists say. But that doesn't mean the housing market is on the verge of a miracle recovery. Construction is expected to fall further as builders struggle to shed a glut of unsold homes. And many economists expect house and condominium prices to continue falling for at least an additional six months to a year in parts of the nation where speculators went wild.

For now, the consensus among economists is that the housing downturn will remain a drag on the economy but probably won't sink the U.S. into a recession next year. Even Mr. Shepherdson, among the most bearish, believes the U.S. has a 60% chance of averting a recession in 2007. In any case, the weak housing market will remain painful for speculators who loaded up on credit to buy near the top -- and for millions of people working in housing-related industries. Just last week, Countrywide Financial, the U.S.'s largest mortgage lender, announced plans to shed about 2,500 jobs, or 4.5% of the company's total.

Largely because residential investment dropped at an annual rate of 17%, inflation-adjusted economic growth in the U.S. slowed to a feeble rate of 1.6% in the third quarter, according to an estimate released by the Commerce Department. Without that drop in residential building, economists said, the growth rate would have been about 2.7%.

After the third-quarter carnage, expect "some gradual improvement from here," says Peter Kretzmer, a senior economist at Bank of America in New York. He expects residential construction to decline at an annual rate of 13% in the current quarter, 5% in next year's first quarter and 2.2% in the second quarter before starting to grow again. Mr. Shepherdson disagrees, arguing that the drop in construction will accelerate before the market regains balance.

Offsetting the housing damage are several positives. Gasoline prices and mortgage interest rates have fallen in recent months. The stock-market rally has made some people feel richer, even as those who trust only in real estate feel poorer. And job growth, though unspectacular, continues at a "solid" pace, says Scott Anderson, an economist at Wells Fargo in Minneapolis.

With home prices flat to lower in much of the country, Americans already have less ability to tap their home equity to finance spending. But it is unclear how much effect that will have on consumer spending. Some economists believe that rising wages, the stock-market rally and lower energy costs will be enough to keep Americans loading their shopping carts with iPods and flat-screen TVs.

Mr. Greenspan sees hope in the rate of applications for home-purchase mortgages. After falling in the second half of 2005 and earlier this year, they have leveled off in recent weeks.

Some of the optimists' arguments are dubious. To bolster its position that the housing market is stabilizing, the National Association of Realtors last week trumpeted a 2.4% decline during September in the number of previously occupied homes offered for sale through multiple-listing services. But the Realtors' news release didn't mention that listings almost always decline in September, when the back-to-school season means fewer people are moving. Over the past 20 years, listings have declined an average of 3.4% in September, says Ivy Zelman, a Cleveland-based housing analyst for Credit Suisse.

Ms. Zelman, who last year correctly predicted a plunge in home-builder share prices, thinks investors who now are bidding those prices back up are way too early. Sales of new homes are unlikely to start rising again before early 2008, she says. Meanwhile, "land is going down in value daily," she says.

Joshua Shapiro, chief U.S. economist at research firm MFR in New York, is more upbeat but still thinks home prices will "stagnate" on a nationwide basis for several years, as rises in parts of the country are offset by continued declines elsewhere. After the unusually steep surge in home prices during the first half of this decade, he says, it will take time for incomes to catch up again with housing costs.

Greenwich Real Estate Market Explained

U.S. Economy Will Grow Slowly and Not Sink into Recession, Conference Board Reports

Varied economic indicators produced by The Conference Board are now pointing to slow growth ahead in the U.S., but not a recession, according to an analysis released yesterday by The Conference Board, the global research and business membership organization.

"The challenge for both the Federal Reserve Board and the U.S. economy is that this period of sub-par growth is likely to have little impact on inflation and short-term interest rates," says Gail D. Fosler, executive vice president and chief economist of The Conference Board. Her analysis appears in “StraightTalk,” a newsletter designed exclusively for members of The Conference Board's global business network. "Rather than coming down, they are likely to remain high for an extended period or even go up."

Over the past three months, The Conference Board index of leading economic indicators has turned down relative to its level six months ago for the first time in this expansion.

"While this signal is not particularly alarming, since the downturn is still rather modest, it does suggest that the economic cycle is more mature than is generally presumed," says Fosler. "Although such downturns do occur, they usually happen toward the end of the economic cycle." The current downturn is still in the range of the 1995 slowdown rather than the sharper declines before the 1990 and 2001 recessions.

The rate of change in the leading index is as important as its level. The LEI may dip into negative territory, but the decline is likely to be modest or brief. The key element is not only the level of the index, but the magnitude and duration of its decline. According to both of these indicators, the LEI is now signaling a downturn—not a recession.

The Fed Is in a Pickle

The Federal Reserve Board is currently operating with little leeway. The current topline Consumer Price Index is rising above a 4 percent annual rate, which is the highest inflation rate in over 15 years. Core CPI is running at about 2.5 percent, which is on a par with the rate that preceded the 2001 recession, and appears to be moving up to the 3 percent inflation rates of the mid-1990s.

"Despite the financial market's enthusiasm for the Fed's restraint in August, it is hard to believe that the Fed will not have to continue to raise the Fed funds rate in the face of these inflation pressures," says Fosler. "Before the Fed can actually cut rates, an event or shock of a sufficient magnitude to reverse the currently entrenched optimism in commodity markets will have to occur."

The next several months bear watching. Earlier, the Fed's tightening had little or no impact and it appeared that the U.S. economy might be reaccelerating after the shock from Hurricane Katrina in the fourth quarter. The deceleration in the economy is clearer now that consumer and investment spending and the housing and employment sectors are beginning to weaken. Over the past two years, the financial indicators in the LEI have taken the U.S. economy toward lower ground and the nonfinancial indicators are now following suit.

Capital Goods Markets Are Weakening

One of the biggest disconnects in the U.S. economy has been between the rapid growth in the capital goods and manufacturing sectors and the systemic weakness of the consumer sector. The consumer goods sector, which was propped up by low interest rates during 2000-2002, never faced the traditional recession challenge. Outside of housing investment, the consumer sector never recovered either. While consumer spending has remained in the 3-4 percent range, the major benefactor has been consumer-related imports. Domestic consumer goods orders on average have not grown at all over the past four years.

The capital goods sector has been the other overwhelming economic driver during this cycle. The acceleration in nondefense capital goods orders during this cycle dwarfs past investment booms -- even those of the tech "bubble" of the late 1990s. The year-to-year growth in capital goods orders peaked at about 30 percent late last year. This growth is the result of what has been, until very recently, rapid growth in domestic infrastructure, housing, technology, and capital goods investment, as well as a boom in investment in other parts of the world -- especially emerging markets -- which is reflected in the rapid growth in export orders. Exports of capital goods have been rising at a 13 percent annual rate over the past year.

But recently, the capital goods sector appears to be slowing. Besides the slowdown in capital investment in the second quarter Gross Domestic Product, there has been a sharp drop in capital goods orders overall.

Despite a bounce back in August from July's dip, the slowdown over the last several months in the Institute of Supply Management export orders index, which is generally a good leading indicator of export orders, is a matter of even greater concern. The decline in the short-term trend of this index suggests that external global demand for capital goods may be slowing. Vendor performance, as measured by the percentage of companies reporting slower deliveries, is still relatively high (above 50 percent).

Where Will Profits Go?

Corporate profitability, which is an important long-lead indicator of the business cycle, is making stunning gains. When corporate profits are high, investment usually grows rapidly and businesses spend more freely on travel, marketing, and other general administrative expenses. Hiring rises and, equally important, so does liquidity.

"What is clear is that companies have been spending their cash flow freely through investments and stock buybacks and increased dividends," adds Fosler. "Companies still appear relatively liquid, but the financing gap is now in territory that bears vigilance."

Greenwich Real Estate Market Explained

Pricing Your Home Gets Trickier

Sellers Test Different Strategies As Houses Languish on Market;
How to Trigger a Bidding War

By RUTH SIMON

As the housing market cools, one of the hardest decisions facing home sellers is how to price their properties.

Traditionally, brokers have set listing prices by reviewing how much comparable homes sold for in a neighborhood. Now, with prices edging lower in many places and the number of homes on the market climbing, checking comparable sales is becoming less useful. At the same time, many would-be buyers are sitting on the sidelines, waiting to see how far prices will fall. Bigger inventories of unsold homes also are making it harder for sellers to figure out how to make their house stand out amid the competition.

What it takes to sell a house varies from market to market. Some brokers are telling customers they need to underprice the competition -- even if they think their home is more attractive. Sharon Baum, a senior vice president with the Corcoran Group in New York, recently listed a two-bedroom, two-bathroom apartment for $3.7 million. That was $100,000 less than the asking price for a similar unit five floors below, even though apartments on higher floors typically carry bigger price tags. "As buyers have more choices, you've got to make your apartment stand out," she says.

Sellers are also being told to cut prices aggressively if their house isn't moving -- or risk chasing the market downward. If a home doesn't get any showings in 21 days or gets 10 showings but no offers, Ned Redpath, president and owner of Coldwell Banker Redpath & Co. in Hanover, N.H., often advises the seller to slice the asking price by 10%. "We don't like to see $2,000 or $5,000 price adjustments," he says. "We want to see a real whack" that attracts attention.

Builders of new homes also are tinkering with their pricing formulas to generate sales. Mid-Atlantic Builders in Rockville, Md. is offering to adjust the sales price downward up to 45 days before closing if the price on one of its similar homes declines. Waterford Development Corp. will have homes in its Woodland Pond at Manchester development in New Hampshire reappraised two years after closing. If the price drops, the company says it will write the buyer a check for up to 15% of the original sales price, not including the value of any optional upgrades.

Even in relatively strong markets, brokers are paying closer attention to price trends. Wallace Perry, president of Coldwell Banker United, Realtors, Carolinas region, says he has begun checking multiple-listing service data every week or two instead of once a quarter to see how recent sales compare with deals that closed three and six months ago. "Things can change...very quickly," he says.

The renewed emphasis on pricing represents a dramatic turnabout from the heady days of the housing boom, which peaked in the middle of last year. Bidding wars were common and, in many markets, homeowners simply looked at the last sale and asked for more.

That's all changed. The National Association of Realtors said this week that the median sales price of existing, or previously owned, homes fell 1.7% to $225,000 in August from a year earlier, the first such drop in 11 years. There's now a 7.5-month supply of existing homes on the market, the most since April 1993.

With so many properties vying for attention, sellers are also looking for creative ways to catch the eye of would-be buyers and their brokers. Some sellers are offering to pay closing costs or provide other incentives. When their 3,500-square-foot carriage house in Exton, Pa., failed to sell this spring, the owners dropped the asking price twice, to $449,000 from $479,000, says Beth Koser, an agent with Prudential Fox & Roach, Realtors. When that didn't do the trick, the couple agreed to offer $10,000 toward closing costs to any buyer or agent who attended an open house within a two-day period. The home sold a few weeks later for $430,000. "The incentive created a sense of urgency," says Ms. Koser. Buyers "saw that the seller was willing to negotiate."

Other brokers are using incentives to counter competition from new home builders. In Tampa Bay, Fla., Craig Beggins, president of Century 21 Beggins Enterprises, recently put together a list of 16 incentives homeowners can offer, from paying the mortgage for several months, to outfitting a media room with a big-screen TV, to picking up the cost of day care for some period.

Another approach is a personal plea. Traci Smith, president of Century 21 Smith & Associates in San Antonio, encourages clients to court prospective buyers with a letter explaining the intangibles that make their home and neighborhood so appealing, such as the fact that the kids on the block trick-or-treat at Halloween together. During the height of the housing boom, some brokers were encouraging the same type of personal notes -- but from buyers eager to get their bid accepted.

Some brokers are trying to trigger bidding wars by setting an asking price sure to attract attention. Romeo Aurelio Jr., sales manager for Century 21 Hartford Properties, recently listed a small one-bedroom, one-bath fixer-upper in San Francisco's fashionable Noe Valley neighborhood for $650,000, even though he figured the home would sell for $100,000 above that. "If we priced it at $750,000, it was going to sit," Mr. Aurelio explains. "We marketed it aggressively at $650,000 and it generated 20 offers." The house sold this week for $845,000.

And with more buyers hunting houses online, selling strategies are adapting to the new technology. Michael Gallagher, a financial-services executive, initially listed his four-bedroom house in Shawnee, Kan., at $274,500. When the listing expired, Mr. Gallagher's new broker suggested that he boost the price to $275,000. Within weeks, the home sold for $271,000, $36,000 more than the best previous offer.

The explanation? Buyers who use the Internet typically search in increments of $5,000 or $25,000, says Kerwin Holloway, a managing broker with Reece & Nichols, a unit of Berkshire Hathaway Inc., which handled the sale. At the higher price, Mr. Gallagher's home was likely to turn up in more searches. It also looked like a bargain to someone whose search started at $275,000. At the lower price, it was one of the most expensive homes priced between $250,000 and $275,000. Until recently, brokers had taken their cues from retailers, pricing a home at $199,500 because it seemed like a better deal than one priced at $200,000.

A property that's not priced properly can languish on the market and get shopworn, says Dan Elsea, president of brokerage services at Real Estate One in the Detroit area. A four-bedroom house in Troy, Mich., has been sitting on the market for 10 months, even though the price has been cut to $349,900 from $394,900, Mr. Elsea says. By contrast, a similar home in the same market sold this month for $360,000, just 23 days after it came to market priced more appropriately at $369,000, he says.

Greenwich Real Estate Market Explained

Housing Downswing Expected to Bottom Out by Mid-2007, Builders Tell Congress

National home price appreciation is expected to remain relatively flat for the future

The National Association of Home Builders (NAHB) told Congress that the current downswing in home sales and housing production following the record housing boom of 2004-2005 is expected to bottom out around the middle of next year and gradually move back up toward trend by late 2008.

Testifying before the Senate Economic Policy and Housing and Transportation Subcommittees, NAHB chief economist David Seiders said that while the housing downswing still has some distance to go, "various economic and financial market fundamentals figure to be supportive of housing demand for the foreseeable future."

These fundamentals include the following:

• Payroll employment is proceeding at a decent and sustainable pace.
• Household income growth is strengthening as the economic expansion proceeds.
• The interest rate structure is favorable, mortgage credit is readily available and monetary policy has stabilized following a long run of upward rate adjustments.
• Energy prices have receded from record highs earlier this year.

Seiders also told lawmakers there are several downside risks to the housing and economic outlook he presented. These include the possibility of spikes in interest rates or energy prices, a large resale of homes back onto the markets by investors/speculators and uncertainties regarding the size of the inventory overhang in the market for new homes.

There also are considerable uncertainties about the impacts on consumer spending from a fading housing wealth effect as well as from the impacts of "payment shock" on home owners facing upward adjustments to monthly payments on "exotic" types of adjustable-rate mortgages (ARMs).

The record housing starts and sales of the past two years were well above levels supportable by demographics and other fundamental demand factors, and were fueled to a great extent by investors and speculators seeking to make a quick profit and through the surge of unconventional ARMs, according to Seiders.

"In retrospect, it was the finance- and price-driven acceleration of buying for homeownership and for investment that drove housing market activity into unsustainable territory during the boom," he said.

After posting double-digit gains during the past two years, national home price appreciation is expected to remain relatively flat for the foreseeable future. "Indeed, some decline is a distinct possibility, and the rate of price appreciation should remain below trend for some time," said Seiders.

NAHB's forecast has a cumulative shortfall of housing starts of roughly 400,000 units from the middle of this year through the end of 2008, in line with the estimated excess supply generated during the recent boom period.

And while the current downswing in home sales and housing production will continue to detract from overall economic growth through mid-2007, Seiders said that much of this negative impact should be offset by strengthening activity in other sectors of the U.S. economy (spending on capital equipment and software, nonresidential structures and exports).

Source: National Association of Home Builders

Greenwich Real Estate Market Explained

A Corner of Greenwich, but Without the Prices

NY Times

Talk of Greenwich inevitably leads to the price of real estate. The average price of a single-family home here has surpassed $2.5 million. Downtown, now the province of hedge fund managers, commercial space rents at rates comparable to Midtown Manhattan. Upscale condominiums for "downsizers" are fetching $3 million or more.

Frequently left out of this discussion are the comparably nominal prices for property in the neighborhood of Byram, a densely populated, beak-shaped square mile bounded by Long Island Sound on one side and the Byram River on the other.

Originally developed in the 19th century for Italian, Slovak, Polish and German immigrants who worked the foundries and factories along the river, the community is often more closely linked with Port Chester, N.Y., its similarly postindustrial neighbor on the opposite shore.

"Years ago, there was kind of a conflict where people from Greenwich never wanted to be associated with Byram, and the people of Byram always said they lived in Byram," said Michael Bocchino, 34, a lifelong resident of Byram and chairman of its active neighborhood association. "People here felt slighted because the town put less money into Byram."

The Greenwich cachet may soon envelope this southwestern corner, however, as local developers move into one of the few areas of town yet to be gentrified. Most recently, the area received a nod from Antares Investment Partners, owner of the opulent Delamar Greenwich Harbor Hotel and other major properties, with the purchase of a large apartment complex in Byram for conversion into million-dollar condominiums.

The Byram riverfront is also poised for a transformation, as town planners and the neighborhood association complete a master plan for improvements that include a boardwalk and parks along the length of the river. A 20-unit town house community and marina has been approved for construction on two riverfront acres previously reserved for industrial uses on South Water Street. Called Greenwich Landing, the high-end development replaces a heating oil company.

"This is pretty much setting the tone for up and down the Byram River," said John Wahba, a Byram native who is developing the project with his brother James.

What You'll Find

Interstate 95 bisects Byram, effectively creating two very different areas, one containing some of the town's most expensive homes, and the other some of its most affordable.

Above the highway and away from the shoreline, the hilly terrain is covered with modest single- and multifamily homes set on small lots. The narrow, winding streets and closely set houses give this end of Byram a distinctive village feel, and residents regularly walk to the Byram Shubert Library, which serves as the community hub, and the small shopping district along Mill and Water Streets.

Below the highway, Byram Shore Road follows the shoreline. This avenue dates to the era of the great industrialists, and their grand "summer cottages," some hidden behind gates, are still interspersed among newer palatial properties.

"I find that people new to Greenwich, and those with new money, have trouble saying they live on Byram Shore Road; they say they live in Greenwich," said Kaye Lewis of Kaye Lewis & Associates, a real estate brokerage firm. "But there was an $18 million sale on that road last year. I mean, this is not for the faint of heart."

In the village area, residents tend to be fiercely loyal to their Byram roots, and old-timers abound. The large number of rental properties have attracted Hispanic immigrants, some of whom are buying multifamily homes to live in, and renting the other units themselves.

Young couples discouraged by the out-of-reach prices elsewhere in Greenwich are also giving Byram a second look. "This is the only area of town that we could afford," said Amy Repik, who bought a three-bedroom home in Byram with her husband, Josh, in December. The couple had previously rented in Greenwich, and spent two years shopping for houses as far up the shoreline as Norwalk. But Mr. Repik, a municipal employee and Greenwich native, was reluctant to leave his hometown.

They bought their 1929 colonial for "close to $600,000," said Mrs. Repik, who commutes to work at Gartner Inc., a market research company in Stamford. The tradeoff was a small yard, she noted, but not so small that they can't have a few friends over for a cookout. The planned revitalization of the riverfront also figured into their purchase. The town has allocated about $1.5 million for design and development of the parks and boardwalk. A second phase calls for the addition of trees, landscaping and benches in the commercial district.

"This side of town has been neglected until now, and this is going to bring the value up," Mrs. Repik said.

What You'll Pay

While the average price of a single-family home in other areas of Greenwich has shot up more than 30 percent in the last two years, "Byram is still under $1 million for a single-family home," said Roberta Jurik, an agent with Prudential Connecticut Realty.

Primarily colonials and Capes built in the early 1900's, these small homes start at around $600,000; multifamily homes start at around $800,000. Many have been improved upon over the years.

"You won't see many houses being torn down because they're over the current allowable floor-area ratio for the lot size, and you couldn't replace them with as big a house," said Paul J. Pugliese, president of the Greenwich Land Company, a real estate company, and chairman of the town's architectural review committee. The new condos will broaden the housing opportunities in Byram and add a little luxury, he said.

The town homes at Greenwich Landing will feature custom kitchen cabinetry and granite countertops, master bedroom suites, three-car garages and 20 boat slips. Priced at about $2 million, each unit will have three bedrooms and two-and-a-half baths. The setup is convenient for boaters, said Kathryn Clauss, an agent at Coldwell Banker Residential Brokerage. "It's a five-minute boat ride from there to the Sound, but you're in a safe harbor while your boat is docked in the river," she said.

Sales have just begun on the converted condominiums at Greenwich Place, formerly an apartment complex known as Putnam Green. Antares is renovating the exteriors of the buildings and upgrading the interiors with new kitchens, bathrooms, flooring and doors. Prices start at $600,000 for a studio and range as high as $2 million for a three-bedroom. Greenwich Fine Properties is handling the sales.

At Greenwich Shore, an apartment complex completed in 2004, all 55 units are rented, and turnover so far has been minimal, Ms. Lewis said. Situated on a ridge high enough to allow some units glimpses of the Long Island Sound, the apartments start at $1,975 a month for a one-bedroom. The largest unit, at roughly 2,400 square feet, rents for $5,100.

What to Do

Greenwich is known for its many parks and beaches, and one of its gems is the 30-acre Byram Shore Park. Located on the Long Island Sound, the park's many shady areas entice picnickers, while the beach boasts the only public swimming pool in town. Public boating facilities have slips for 300 small boats and 90 moorings for larger crafts.

The busy Byram Shubert Library offers special programs, from preschool story hours to Spanish-language forums on first-time home buying. The library is about to undergo a $3.8 million expansion that will double its size, providing space for more computers, a community room and separate areas for the children and teenagers who flock to the library after school.

Byram's commercial district, once pocked with vacancies, has begun to attract some architects, boutiques and salons. There are also banks, delis, a pet shop, an upholsterer, and a popular restaurant called That Little Italian.

Shopping opportunities have expanded considerably since the opening of a big-box retail complex with a movie theater just across the bridge in Port Chester. Dining options on the riverfront include Sam's Bar & Grille, which attracts young crowds in the evening, and the Black Bear Grille.

The Schools

The Greenwich school system, which rates among the state's highest-performing districts, is a major draw for families. Byram's New Lebanon School is the smallest of the town's 11 elementary schools, with about 240 students in kindergarten to Grade 5. About 40 percent of the student population is Hispanic. The average class size is 18 students.

Nearly 600 students in Grades 6 to 8 attend Western Middle School, also in Byram. About 70 percent of the school's students in eighth grade met the state goal on the Connecticut Mastery Test in reading and mathematics in the 2004-05 school year, compared with about 80 percent for the district as a whole.

Greenwich High School is one of the largest in Connecticut, but manages its size by dividing the roughly 2,780 students into four houses. The school has extensive programs in music, athletics and the visual arts. Average SAT scores for the class of 2005 were 563 for verbal, and 586 for mathematics. Statewide averages were 508 for verbal and 520 for math. Eighty-eight percent of graduates went on to higher education.

The Commute

Byram is the section of Greenwich closest to Manhattan. The 30-mile commute by car can take as little as 45 minutes on I-95, or twice that, depending on the time of day.

The Port Chester train station is closest. Metro-North Railroad trains to Midtown take about 40 minutes. The one-way peak fare is $14; a monthly pass is $197.

The History

Known by several names since Colonial times, Byram acquired its present name only in 1947. Just before that, the area was known as East Port Chester, which makes sense given the community's economic reliance on the foundries and other industries that rose on both sides of the river during the 19th century. One of the well-known industries was a granite quarry, which eventually became what is now Byram Shore Park.

What We Like

This is a truly walkable community with the feel of an old New England fishing village.

Looking Ahead

Redevelopment on the Port Chester riverfront is aggravating cut-through traffic, which empties into Byram residential areas off the I-95 exit ramp. "The trucks rumbling down Mill Street are the biggest issue," Mr. Pugliese said.

Greenwich Real Estate Market Explained

Investment Homes To Get Less Focus, Realtors Predict

By JAMES R. HAGERTY

The National Association of Realtors predicted that purchases of investment homes will decline this year after surging in recent years.

A survey of home buyers by the trade group found that 28% of all homes purchased in 2005 were for investment rather than for occupancy by the buyers, up from 25% in 2004 -- figures that are far higher than those shown by mortgage-lending data. Such homes are generally bought to serve as rental properties, at least in the short term.

The rise in mortgage interest rates in the past year will discourage some investors, says David Lereah, chief economist for the NAR. "There are fewer incentives to speculate in the market with price appreciation cooling in much of the country."

Still, Mr. Lereah and many other housing economists expect the housing market to settle into a "soft landing" after the frenzied demand of recent years. Some housing experts warn, however, that prices could fall at least modestly in some cities.

Loan data compiled by LoanPerformance, a unit of First American Corp., show a steady rise in investor demand for houses but at a much lower level than that reported by the NAR. LoanPerformance found that 9.5% of home-purchase mortgages in 2005 were for investors, up from 8.6% in 2004.

LoanPerformance derives its data from loan-service companies accounting for about 80% of the mortgage market, according to Bob Visini, vice president of marketing. The NAR bases its findings on a survey of 3,406 people who bought homes in 2004 and 2005.

One source of variation between the two reports is that LoanPerformance doesn't capture data on homes purchased without a loan. Paul C. Bishop, an NAR economist, says another factor is that some investors may not identify themselves as such to lenders because they want to avoid the higher interest rate generally charged to investors. Mr. Bishop says he can't fully explain why the NAR estimate was about triple that of LoanPerformance. But he said NAR economists are "comfortable" with their survey data.

The NAR also reported strong demand for vacation homes, estimating that they accounted for 12% of the market in 2005, up from 11% a year earlier. Much of that demand comes from baby boomers in their peak earning years. The NAR said the median price of a vacation home rose 7.4% last year to $204,100.

Greenwich Real Estate Market Explained

Real Estate News

Tax 101 for Home Flippers

Near the top of the list of pitfalls for anyone who wants to make money flipping houses is failure to understand and plan for the tax consequences, says Michael Cain, a certified public accountant based in Woodland Hills, Calif.

The current law allows a seller to keep, tax-free, gains of up to $250,000 (or $500,000 for married couples filing jointly) on the sale of a primary residence if the seller has lived in it for 24 of the previous 60 months.

For investment homes — and those in which the owner did not live for at least two of the previous five years — the Internal Revenue Service assigns taxes according to the length of time it was owned before a sale. Profits from homes owned for one year or more are taxed as capital gains, at the current rate of 15 percent, plus state taxes. Profits from homes owned for less than one year are taxed the same as regular income, according to the bracket in which the seller falls, anywhere from 25 percent to 35 percent.

The savvier approach, Cain says is to move the proceeds of a home sale into another investment property of roughly equal value, a procedure known as a like-kind or 1031 exchange. IRS rules give investors 45 days from the time they sell a property to identify the exchange property and 180 days to make the exchange. Investors can't receive any cash from the sale, so all money must be held by qualified intermediaries, such as a title company.

What home flippers hope to avoid is being labeled a "trader business" by the IRS. Those are investors whom the IRS identifies as making their living off the buying and selling of homes. In that case, flippers will not only have to pay the higher income tax rates, but they also will have to pay 15.3 percent in self-employment taxes.

Greenwich Real Estate Market Explained

Some New Math on Homes

By DAMON DARLIN

Gary and Margaret Hwang Smith spend a lot of time musing about real estate.

It is not just that the couple, economics professors at Pomona College, have put so much of their money in the game, having bought a home in Claremont, a college town in Southern California, a real estate market that has been described as overpriced by most and a bubble by some

Rather, they said, applying economic tools to buy a five-bedroom 1922 Craftsman home sharpened their thinking and guided two years of research into whether there is a bubble. They concluded that not only was the Los Angeles region not in a bubble, but many markets that others were calling overpriced, like Chicago or Boston, were probably underpriced.

Their findings are at odds with other surveys that use the relationship of home prices to income to determine whether home buyers are overreaching. Homes in Orange County, Calif., were fairly priced, the Smiths found. Some cities like Dallas, Indianapolis and Atlanta were screaming bargains. Homes they surveyed in San Mateo County, south of San Francisco, were, however, overpriced by about 54 percent.

In a paper the two presented at the Brookings Institution this week, "Bubble, Bubble, Where's the Housing Bubble?" they said that even though prices had risen rapidly and some buyers unrealistically expected the trend to continue, "the bubble is not, in fact, a bubble in most of these areas."

They argued that the value of a home is determined by the rent it could fetch. Calculate the future rents, subtract mortgage payments, taxes and other costs, factor in a good annual rate of return of 6 percent or more, and one should be looking at the proper price of a house or condo.

Their bottom line was: "Buying a house at current market prices still appears to be an attractive long-term investment."

Speculating about bubbles their cause, their longevity, and indeed, their very existence occurs whenever there is a rapid rise in asset prices. When dot-com stocks pushed the stock market to record highs in the late 1990's, many people tried to explain or justify the high prices of the stocks by talking about how the Internet was creating a new economy, one that worked by different rules or needed valuations that did not depend on earnings but on eyeballs viewing Web sites or the "stickiness" of those eyeballs. Those justifications were proved false by the technology meltdown.

With real estate, there have been fewer attempts to justify the high prices and more of an effort to understand why it is happening and whether there is an asset bubble.

Robert J. Shiller, the Yale University professor who warned of the stock market bubble, has few doubts that a real estate bubble exists in many American cities. He said he did not buy the Smiths' point that certain markets were not overpriced.

The way the Pomona professors reached their conclusion, however, has generated a lot of interest among fellow economists. "I think the paper is a sign of the times," Mr. Shiller said, because it emphasizes the link between home prices and rent as the proper way to understand the value of real estate.

Richard Peach, a vice president at the Federal Reserve Bank in New York who studies home prices and their relation to income, echoed that view, saying, "This is an important paper."

The value of the Smiths' research may be its practicality. It concentrates on the how, more than the why, in laying out a method to determine the underlying value of a home. They offer a way for real estate agents, financial planners and prospective homeowners to understand how much is too much to pay for a house.

Karl E. Case, a Wellesley College economics professor who has been studying real estate prices for more than 25 years, calls the paper's method "absolutely the correct way to think about it."

The Smiths say a prospective homeowner needs to ask, Should I buy or should I rent? That the value of a house is tied to the rent it can command is not a new idea. Other economists have advanced the idea and some have advanced the notion that a bubble can be measured with price-to-rent ratios that correspond to price-to-earnings ratios for stock.

But a price-to-rent ratio does not go far enough, according to the Smiths. Investors like Warren E. Buffett value a stock by looking at its intrinsic value that is, how much return one would get on the stock over time. For stocks, that is the cash the company generates and, in some cases, gives back to shareholders in the form of dividends.

The intrinsic value of a house is the rent that it can generate. "It's not that houses are like stock," Mr. Smith said, "but if you think about them as you do stocks, you start thinking about it correctly."

The problem is that there has not been a good way to compare rents with homes. Indexes that try often end up comparing apartment rent with prices of a single-family home. A result, the Smiths said, is inflated price-to-rent ratios that are displayed as evidence of a bubble when one may not exist.

The Smiths solution was to look for "matched pairs" of similar houses, one rented, one owned, but both in the same neighborhood. They did this in 10 cities in which they could find enough real estate data and matched pairs. Once they had established what rent was for a certain house, they used software they created to compute the flow of rents over time, factoring in the outflow of mortgage payments, maintenance costs and taxes. Then they had to determine what those future payments would be worth today, which economists call the net present value. If the net present value is a positive number, the house is worth the price. If the result is a negative number, the buyer would be better off renting it. (For more, see Your Money, Page B4.)

Of course, few people do that math when they buy a house. They look at what other houses in the neighborhood are selling for and base their bid on some expectation of what the house may be worth in the future.

Those expectations are far too optimistic, numerous studies have shown, most notably a 2003 study by Mr. Case and Mr. Shiller that found, for instance, that homeowners in San Francisco expected annual price increases of 15.7 percent. "It's clear a lot of people are nuts," Mr. Case said.

The Smith formulas provide a way to determine if a buyer is overpaying. Making the calculations takes a fair amount of math skill, so Gary and Margaret Smith, who is also a certified financial planner, say they want to commercialize their program so that the average person can determine a house's value. She has helped several clients decide whether to buy or rent. "We may have some intellectual property that is valuable," Mr. Smith said.

Indeed, the Smiths used an early version of the formula before they moved from a tract home in Claremont to a home closer to the college. The two met and married while teaching at Pomona, about 35 miles east of Los Angeles. They have three children (a fourth is on the way), so they needed more room.

They found a four-bedroom house a short walk from the college that also had a separate guest house they could use as an office. But the owner was selling it without an agent and did not have an idea of what to sell it for. "He told us to figure out a price," Ms. Smith said. They determined what rents were for comparable homes and ran their cash-flow software to find a price. "We knew where we could go up to," Ms. Smith said. Their first offer was rejected, but he eventually accepted $950,000.

That was about 30 percent more than the price of the house they had been living in, but the net present value calculation told them that they would be generating an 8 percent after-tax return. "It seemed like a no-brainer," she said.

"Then it occurred to me that it was an appropriate method for looking at the question of the bubble," she said.

The Smith analysis does not escape criticism. Several economists, like Mr. Case and Mr. Shiller, quibble about the assumptions the Smiths make in doing their calculations for example, homeowners spending only about 2 percent of the house price a year on maintenance or that everyone can obtain a mortgage interest deduction. One-third of taxpayers do not itemize their deductions and many more are getting hit with the alternative minimum tax that removes some of the advantages of home ownership, said Christopher Mayer, a professor of real estate at the Columbia Business School. Still, he agrees with the Smiths that there is not a housing bubble and he was impressed by the effort they made in finding matched pairs of houses.

But he also said that they lacked an understanding of what drives the economies of cities. For instance, he says, Indianapolis looks undervalued because, unlike the Northeast and West Coast cities, land there is inexpensive. The supply side of the supply-demand relationship that determines prices seems to be overlooked. In some cities, zoning and other restrictions limit the building of homes. Elsewhere it is relatively easy to build houses when demand rises because most of the cost of a home is in construction. That is one reason there is a greater expectation of price appreciation in California than in a place like Indianapolis, he said.

The questions many people want to know about housing prices are not answered by the Smith research: when will they fall and by how much? "Some people think we are trying to predict prices and we are not," Mr. Smith said. "That's a point a lot of people get hung up on."

Sure, he said, if prices drop you would have been better off if you had waited. "But you can't time the market," he said. "If you are a house flipper, we aren't talking to you."

Greenwich Real Estate Market Explained

How to negotiate best prices, terms in real estate transaction
Use time, local market conditions to your advantage

By Robert J. Bruss

Although all the key real estate negotiation components are important to every negotiation, it's time to focus on the other key components of any negotiation. Remember, all these components apply to every negotiation, whether you are buying or selling real estate, a car a refrigerator, or anything else.

1 – TIME DEADLINES. The time deadlines (if any) of each party to a negotiation are extremely important for a successful negotiation. However, in real estate negotiations, it pays to be aware that some buyers and sellers have no deadlines.

To illustrate, most of us have met homeowners who will sell if they can get their asking price. That's why unsolicited purchase offers at attractive prices for real estate are often successful, especially for vacant land sales. Out-of-town absentee owners are often agreeable to accepting an unsolicited purchase offer because they have been thinking about selling but never quite got around to doing so. That almost happened to me a few months ago.

EXAMPLE: A neighbor phoned me about buying my condominium in Minnesota (which she knew I use only a few days each month). She was getting married, wanted a two-bedroom unit like mine, already lived in the complex in a one-bedroom unit, had a buyer for her condo, and wanted to move before the wedding. She was motivated by several time deadlines. But I, as a potential seller, wasn't motivated at all! If she had sent me a written purchase offer for top dollar, accompanied by a substantial deposit check, she would have had my undivided attention! As it turned out, she bought a less-desirable two-bedroom unit across the hall from mine, but without the more attractive view I enjoy.

Whenever possible, try to find out the other party's time deadline, but without revealing your own deadline. This negotiation principle isn't just limited to real estate.

EXAMPLE: I'm in the market for a new refrigerator. Lately, the "warm temperature" light sometimes comes on for no explained reason. After I adjust the refrigerator control, however, the problem goes away. I'm starting to shop around at dealers recommended by friends for a new refrigerator because, after 22 years, it's probably not worth repairing my current, perfectly satisfactory model. But I'm not yet highly motivated to buy unless I can get a very good deal. However, if my refrigerator conks out completely, I will quickly become a highly motivated buyer with a very short time deadline to get a new refrigerator delivered as fast as possible. Negotiating a bargain price then won't be my key motivation. However, look at the situation from the refrigerator salesperson's viewpoint. Maybe he or she has a strong motivation, such as meeting a sales quota, or winning a dealer or manufacturer's sales contest. That's why, for example, it's usually best to buy a new car or other consumer products toward the end of the month, or at the end of the quarter, or end of the year to negotiate the best price and terms.

2 – INFORMATION KNOWLEDGE CREATES NEGOTIATION POWER. Especially in real estate negotiations, successful negotiators (and their real estate agents) understand the importance of information knowledge of all the circumstances if they are to negotiate the best possible price and terms. Knowing local real estate conditions, such as whether there is a buyer's market (with more properties listed for sale than there are qualified buyers) or a seller's market (with more qualified buyers than properties available for sale), is an example of essential profitable information.

Even specific knowledge about a specific property is critical for a successful negotiation. To illustrate, the length of time a house has been listed for sale is essential knowledge for a prospective buyer who wants to negotiate a bargain purchase price. If a house just came on the market for sale last week in a local seller's market, the seller is probably anticipating a top-dollar sales price. For this reason, I've found it's usually best not to make a purchase offer immediately after a home is listed for sale (unless the local real estate market is very slow).

But when a house is listed during the first week of December that probably indicates a highly motivated seller who will listen to any reasonable purchase offer during the slowest sales season of the year. Of course, if you are a home buyer, you can probably negotiate your best price and terms if you purchase during the home-sale slow season after Thanksgiving until New Year's Day (or even until Super Bowl Sunday) in most communities.

Other important knowledge information, depending on circumstances, might include local development proposals, rezoning, city council actions, school district quality (good or bad), possible property tax increases, and special assessments for civic improvements.

Working with an experienced real estate agent who lives and works in the vicinity of the property can greatly improve odds of negotiation success. For this reason, I recommend buying and selling with longtime real estate agents who are among the top-producer realty agents in their brokerage firms and in the local real estate association. The more awards and earned designations a real estate agent has on his/her business card, the better! Also, if a sales agent has been selling or leasing real estate more than five years but hasn't yet earned a real estate broker's license, that not a good sign. The educational classes required to become a broker, and pass the examination, in most states will help benefit an agent and his/her clients.

Greenwich Real Estate News - When Your Home Isn’t Selling

What do you do when, despite working with a great real estate agent, taking care when staging, and pricing competitively, your home still isn’t selling? There are a lot of homes up for sale right now, and a record number of foreclosures on top of that number. That makes it harder for home sellers, and while some homes will sell in weeks, it feels like other homes just sit there, for months.

One of the first things to do is to invite in someone who is impartial to view your home, either another real estate agent (your own agent can find someone for this) or friends who will not sugar-coat the truth. Have them look through, pointing out anything they notice as a potential problem. Your real estate agent has probably already done this, but a fresh set of eyes might be able to catch anything that might not be immediately obvious. Try not to take these observations personally; use them to solve the problem and sell your home.

Stay focused. It can take a while to sell a home in any economy. You need to be patient, even if it is frustrating. Don’t fall for quick fixes. There are programs offering cash for your home, which can sound tempting after several months of waiting. These companies will negotiate for the lowest possible price for your home (usually less than 80%, and then sell it for market value, making several thousand dollars. They take over your mortgage payment, but you are often still liable for it, until after the home is resold. You will be much better off keeping to your plan of selling your home through a real estate agent.What do you do if you’ve already bought, and moved into, your new home? Paying two mortgages for any length of time can be devastating to your finances. Rather than trying to keep up with both payments, consider renting out your property until a seller can be found. Better yet, consider a rent to own arrangement. You will have the mortgage taken care of, and also be finding an interested buyer at the same time, one who needs a little longer to prepare for buying a home. This will keep them invested in the property (they’ll take better care of it), and you won’t have the hassle of showing the home with renters living there.

It’s beyond frustrating to wait for a home to sell, especially if it is taking longer than you would have first planned on. Just remember that there is a buyer for almost every home, and, unless your home has something very wrong with it, or unless you are setting too high of a sale price, your home is probably not one of the exceptions. Be patient, stick with the current plan of action (making small changes as needed), and your home will sell.