Not needing “for sale” signs in wealthy suburbs

The Connecticut suburb of New Canaan is testing banning “for sale” signs:

The “trial ban” on real estate signs will run from July 1 to Jan. 1, according to Janis Hennessy, president of the New Canaan Board of Realtors.

The decision was made by members of the Board as well as the New Canaan Multiple Listing Service, “to further improve our already beautiful town,” Hennessy said in a release…

“Millennials and other potential buyers shop for real estate online and we believe they will be able to find New Canaan homes without these signs. We have seen how eliminating the signs has improved the look of other towns in Fairfield County without impacting the real estate markets. New Canaan Realtors believe it is worth a try here in the ‘Next Station to Heaven’ as well.”

The question of whether to implement a ban, such as a longstanding one in Greenwich, has been battered around New Canaan for some time. Saying the sheer number of ‘For Sale’ signs undermines the town’s attractiveness and ability of some property owners to sell, advocates for the change are cheering the decision.

There are four explanations provided or hinted for why “for sale” signs will not be allowed for six months:

  1. Younger homebuyers do not go driving around looking at homes; they look online.
  2. Other suburbs nearby already have a ban in place. New Canaan needs to keep up.
  3. Not having the signs makes the properties more attractive.
  4. There are too many “for sale” signs.

There may be a single underlying reason behind these explanations: the higher social class of residents in New Canaan. “For sale” signs may be gauche in a community that is one of the wealthiest zip codes in the United States (with Greenwich also as one of the wealthiest zip codes). Selling and buying property in a wealthy community does not have to be such a public event. The crass exchange of money for property is essential to American life but may be too prosaic to acknowledge in a place where residents could live in a myriad of places. Not making the sale as public (no signs plus pocket listings and listing only in certain places) may just add to the cachet of the community.

In a place where there are no “for sale” signs and where there may be limited community interaction (one of the findings of The Moral Order of a Suburb), there may be few indications that a property has changed hands. The cars in the driveway may change a bit and home repairs may happen here and there but the single-family homes may be more permanent than residents.

The declining value of shopping mall real estate

The declining shopping mall has led to a drop in value for these properties:

“It’s a tough environment. I don’t think anybody really anticipated the decline of the department store to happen as quickly as it did,” said Joe Coradino, chief executive officer of Pennsylvania Real Estate Investment Trust, which owns 21 malls in the Mid-Atlantic region. “The sellers are clearly on their knees.”

The Philadelphia-based REIT has sold 17 bottom-tier malls since 2013. The last deal, completed in September, was a $33.2 million transaction for the Logan Valley Mall in Altoona, Pennsylvania, anchored by Macy’s, JCPenney and Sears stores. If those same properties were on the market today, prices would be substantially lower, Coradino said…

Not long ago, some of the biggest names in private equity, such as KKR & Co. and Barry Sternlicht’s Starwood Capital Group, were laying out substantial sums to snap up retail properties. In 2012 and 2013, Starwood purchased a combined $2.6 billion of malls from Westfield, followed less than a year later by a $1.4 billion deal to buy seven malls from Taubman Centers Inc. From 2012 to 2014, KKR bought four regional malls for about $502 million, Real Capital data show. That demand has all but evaporated as timing a wager on American malls becomes increasingly treacherous…

It’s easy to understand their reluctance to sell now. Prices for malls fell 14 percent in the past 12 months, even as values for other types of commercial properties, such as warehouses and office buildings, rose or held steady, according to Green Street Advisors LLC. At least four properties have been pulled from the market in recent months because the bids were too low, Dobrowski said.

Even with efforts to save some shopping malls, from adding restaurants and entertainment options, housing, and community spaces, a good number will simply not survive. They will not be desirable enough for retail activity nor prime spots for redevelopment. They may sit empty for much longer than communities desire or can bear. I suspect we will see a lot of potential creative solutions to these dead shopping malls as land owners, developers, and communities try to turn them into sites that again contribute to the surrounding area.

Perhaps the most interesting question here is how low prices will get before they interest someone who will buy them. Are we headed for the equivalent of $1 homes for shopping malls? Perhaps they will become subject to blight and renewal programs? Will the price be low enough for neighbors or communities to buy them simply to raze them? Perhaps they will be the dystopian spaces featured in films like Gone Girl?

Live-in home managers help sell (expensive) homes

A profile of home managers highlights one of the newest techniques for selling expensive homes:

The 7,800-square-foot home where the couple currently live, at 1334 Fox Glen Drive in St. Charles, is on the market for $1.5 million. It has a six-car garage with a “motor court” driveway (the owner’s Porsche 718 Boxster is still parked inside), six bedrooms, eight bathrooms, a tennis court, and 2 acres of land. It’s four times the size of the Callahans’ townhouse in Geneva.

“Sometimes I walk in and think, ‘Really? I get to live here?’ It’s like a fairy tale land,” Janine said, while standing in a stunning living room with giant windows that overlook a backyard koi pond and waterfall. “It’s a privilege for us to do this. … It’s like we’re living someone else’s life for a while.”…

Realtors hire home managers to live in vacant luxury homes that they’re trying to sell because it saves the seller money, Mike Callahan says. It lowers their staging costs, since home managers bring their own furniture…

They’ve lived in 12 houses over the past eight years in Batavia, Wayne, Geneva, Elburn and St. Charles. They’ve stayed as few as 45 days and as long as 16 months. Every time they move in, Mike carries Janine across the threshold. “It’s just our thing,” he says…

“You can’t be spontaneous because it always has to be clean. The home must always be ready to show. You have to be ready to turn all the lights on and get out (for a showing),” Janine said, noting that it’s not unusual for a Realtor to call at random times and say, “We’re sitting in the driveway, can we come in?”

This sounds like it has reality TV potential, particularly if the live-in managers stayed in homes for relatively short periods. The show could track the staging and home showings alongside the lifestyle that comes with moving from nice home to nice home.

I also wonder if such managers can up their rates when they have a proven track record of selling homes (1) quickly and (2) at higher prices. The true value of a home manager might not just be saving money (such as lowering insurance costs and spotting potential problems) but moving homes for good prices.

Finally, what is the home value where having a live-in manager is not worth it? The home mentioned at the beginning of the article is an expensive one but could a typical suburban homeowner (think more of the $400-800k range) benefit from and/or afford a live-in manager?

What you could do with the land after purchasing a CT town

A recent email exchange about purchasing Johnsonville, Connecticut for $1.95 million prompted some thinking about what the new owner could do with their town. Here are some ideas:

-Create a wedding paradise complete with chapel/outside ceremony location, reception buildings, and accommodations for family and guests. The old-timey feel would appeal to many.

-Host a living history museum. This works better in some communities than others but Johnsonville seems suited for it with its older buildings and founding in 1802.

-This could be an ongoing set for films and TV shows. The buildings are already present, there are no residents to work around, and the property could be used for long periods of time.

-Be home to a haunted town. Haunted mansions and buildings are really popular around Halloween but imagine creating a year-round facility on 62 acres with older buildings.

-This could be an interesting paint ball course.

-Become a site for obstacle course type races. Imagine running a few miles while climbing through old buildings, swimming through the pond, hopping fences, and more.

-An artist’s colony or gallery or rotating exhibit space could be interesting. This could be a destination for those looking to create, visit, and/or purchase art.

-Have a retreat center with meeting places inside and outside and accommodations.

-Become a compound for a religious group.

I’m sure there are other possible uses for this property, including demolishing everything and building homes. When you are only a few hours away from both New York City and Boston, the possibilities could be endless (granted that local officials are willing to approve more unique options).

Predicting the “great senior sell-off” to come

Here is an update on one event that might be coming down the road: the time when the Baby Boomers decide to sell their homes.

Nelson pointed to the affordability issue as well as the fact that about a quarter of Millennials prefer urban housing, such as condos or townhouses, over the detached suburban homes that were the Boomers’ preferred habitat. Younger buyers, he said, will also be looking for starter homes—smaller than the big Colonials and split-levels that line America’s cul-de-sacs. “We can predict the next housing crash,” he said at the time. “That’ll be in about 2020.”

Four years later, Nelson tells CityLab that that he believes the sell-off will still occur—but later, in the mid- to late 2020s. This has to do with people deciding to defer selling their homes, hoping to get a better price later than settling for a lower price now. “Home values in much of the country are still less than those before the Great Recession of 2007 to 2009,” he says. Prior to the recession, the typical homeowner would sell a house about every six years. “It was like clockwork,” says Nelson. “This drove a lot of planning and development projections.”…

Nelson predicts that the fringe areas surrounding cities will bring the biggest headaches for Boomers looking to unload their houses. Because Millennials will be looking for small homes when they finally start to buy in larger numbers, the sprawling McMansions of the exurbs won’t be desirable to many of them. “The Boomers in the exurbs are going to be in a real pickle,” says Nelson. “Even in a dynamic market like Washington, D.C. or other booming cities, the market for those homes is going to be soft.”…

But many analysts do agree on one thing: More housing will need to be built for Millennials—and it needs to be scaled to their desires, not their parents’s. “Millennials are likely to prioritize different features in their homes, such as greener materials or in-law suites,” says Molinsky. And according to the Harvard Joint Center’s projections, nearly 90 percent of those looking for homes in 2035 will be under 35 or 70 and over—and both groups tend to buy less square footage.

I suppose we’ll see what happens. I tend to think that Millennials might not be as transformative as some have suggested in regards to where they want to live or in what kinds of houses they inhabit. At the same time, there may be fewer Millennials than Baby Boomers in the market for housing – both due to different sizes of the various cohorts as well as the limited purchasing power of some Millennials  which means it could take some time for those Baby Boomer dwellings to find buyers.

It is also interesting to consider what might happen if these homes, particularly those on the metropolitan fringes, can’t be sold. Would they be demolished? Converted? The community retrofitted? Drop to a low enough price that they become very attractive to certain groups? We have plenty of history as a country of people spreading out but not much experience with any serious contraction.

Relatively few houses to buy

The supply of homes for sale is low:

The national supply of homes for sale hasn’t been this thin in nearly 20 years. And over the past year, the steepest drop in supply has occurred among homes that are typically most affordable for first-time buyers and in markets where prices have risen sharply.

In markets like San Diego, Boston and Seattle, competition for a dwindling supply has escalated along with pressure to offer more money and accept less favorable terms…

About 1.75 million homes were for sale nationally at the end of February, according to the National Association of Realtors. That’s down 6.4 percent from a year earlier and only slightly up from January, when listings reached their lowest point since the association began tracking them in 1999. All told, the supply of homes for sale has fallen on an annual basis for the past 21 months….

Despite the scant supply, U.S. home sales are expected to rise this year, economists say. Fueled by job growth, pay raises and still-low loan rates — and perhaps fearful of being left out as more homes are snapped up and prices rise further — many people are looking to buy.

There are certainly downsides to a low supply of homes, particularly for those with fewer resources. At the same time, the opposite end of the market – a lot of homes on the market – negatively influences sellers. This leads me to a question: (1) how often do we reach an equilibrium in the housing market and (2) how long can such a relatively good balance last once it does occur? In all three cases there is something report on as the pendulum swings between buyers and sellers.

Arms race among new luxury apartments includes live-in musicians

If you have the resources, you have some options in shopping for a nice new apartment including a building musician:

Amenities for high rise buildings are generally culled from a well-honed list of known popular offerings—a lounge, gym, a pool, an outdoor deck, and grilling stations wouldn’t really lead anyone to blink an eyelash. Being LEED certified is often expected.

At the 34-story, 298-unit Exhibit on Superior, amenities for the studio, convertible, and 1 to 3-bedroom units include those, as well as keyless entry with smartphone integration, stainless steel appliances, in-unit washer and dryer and more. Quite nice—but the downtown luxury apartment market glut has led to an arms race to attract new residents and keep rents from being slashed.

And even though the price point is comparably lower (and the floor plans are comparably smaller) than other neighborhood offerings to attract a younger demographic, developer Magellan Development Group and MAC Management wanted to bring some artistry and magic to their building (and to their other properties, if this catches on). Here’s the idea.

A contest is open for the best acoustic guitarist and vocalist to live and play for one year at Exhibit on Superior. The winning musician gets free rent at an unfurnished studio for a year, the title of Musician in Residence, and the chance to hone their skills while playing against any number of cool nooks and spaces in the bKL Architecture-designed building. The residents get in-house live entertainment and bragging rights to live in a building with the first so-called Exhibit A-Lister.

My first thought was that sounds like the arms race among colleges to provide amenities for prospective students ranging from excellent food, state of the art gyms, and private and luxurious dorms. Then it hit me: these luxury apartment buildings may be going after that same demographic: college graduates who want the excitement of the city. If we could narrow it even more, perhaps they are employed in a creative industry or field.

After thinking this through a bit, it is clever to pair residential real estate with music. We might expect something like this in commercial spaces or privately-owned property that is trying to operate like public space (perhaps a park like area outside a major office building). But, this continues the trend of some of the other “weapons” in this residential arms race: providing building amenities that encourage sociability while simultaneously offering well-appointed private units. Let’s hope all the residents like the acoustic guitar scene…