Have you ever wondered who actually buys those weird swim-without-moving treadmilly swimming pool things which seem to have insatiable demand from New Yorker readers? The answer, it turns out, is Sheila Bair:
Last week, Ms. Bair removed her 14-room colonial in Amherst, Mass., from the market after cutting its sale price by $100,000 from an initial $795,000 in April…
Ms. Bair, and her husband, Scott P. Cooper, paid $355,000 for the house in 2002. In ‘02 and ‘03 they received building permits valued at $89,500 to renovate the 1860s house., including new roofing and a counter-current basement pool…
An FDIC spokesman said Ms. Bair decided to remove the listing and wait for the market to improve on the advice of her real-estate agent.
If you think of the housing boom as basically running from 1997 to 2007, Bair bought her house halfway through, and put in a total of $444,500 between purchase price and renovations. She then tried to sell it after the housing bubble had burst for $795,000 — and finally withdrew the house from the market last week in the hope that the market would improve; she was clearly willing to accept no less than $695,000 for the property.
What this tells me is that the market is still in denial: there’s no way this house is more likely to go up in value than down. Even if it does have a counter-current basement pool.
Trackback
8 comments so far
Amherst is a beautiful town in W. MA, one of those upscale picture postcard towns with restaurants and coffee bars but with real shopping on the fringes - Walmart, Target, etc. It’s a college town, with UMass, Amherst, Hampshire, and is a short hop from Northampton. In other words, it’s a 2nd home place where a number of people connected to the schools also live. It’s not a suburb of Boston so the dynamics of price are peculiar.
- Posted by jonathanAmherst is like Hanover, NH, of Western Massachusetts; a very pleasant, nice, lovely upscale, money town. It’s a very good place.
- Posted by Myles SGI live in the area and bought an old house the same year and also spent a lot of money remodeling it.
The permit amount was almost certainly ridiculously low balled. Here home appraisals are based on market price. So if you submit a permit for $89,000, your assessment will increase by that amount. If you actually spend $200,000, people probably won’t check.
I’d also note that prices in this area have been amazingly resilient. Zillow shows my house’s value about where it was four years ago, and that’s probably not far off. That means in real terms it fell 10-12%.
I wouldn’t be surprised if her house sells at that price.
- Posted by Bob_in_MAUMass-Amherst is on the brink of major budget cuts after this coming year, including hiring freezes and faculty firings. That doesn’t bode well for real estate prices over the next few years:
http://www.masslive.com/chicopeeholyoke/ republican/index.ssf?/base/news-21/12453 9571252730.xml&coll=1
- Posted by PeterI am not sure it is so much denial as facing reality that nothing in the jumbo market has much likelihood of selling these days. The market is simply too illiquid.
- Posted by LordBair’s house might sell, but if the new buyer is a flipper, he’s in for a rude awakening if he expects prices to triple again any time soon. Check out the Case-Shiller tiered price indexes. The high tiers across the country haven’t yet quite faced the reality of the market. Indeed, they might never do so. Traditionally, house-price bubbles are inflated away. Foreclosure and REO sales have changed that this time, but only on the low end. High end owners have been able to stay in their homes, mostly.
Me, I welcome the eventual death of the flipper ecology.
- Posted by wcwI don’t care if the shack is planted atop Mount Rushmore, she won’t get 50% of her own costs out of it.
It’s over people. The “Housing is an investment” lie has been proven to be just that. Housing is an EXPENSE… always has been, always will be.
We’re going back to to early 1990’s prices whether you like it or not.
- Posted by 20 Year Realtor“but with real shopping on the fringes - Walmart, Target, etc.”
ROTFL! Let’s go have some real manly shopping at Target…
Both Smith and Amherst’s endowments are down (like everyone else’s) and the cuts are just beginning. Pricing pressure in this area will continue.
- Posted by a