Riverside Spec-House Glut Called Off!

145 Riverside Avenue, nearing completion, NOT a spec-house!

A builder-reader has brought it to my attention that many of the on-going Riverside construction projects that I thought were specs are in fact custom homes. I investigated a bit and sure enough, at least four, maybe more, are being built for specific customers who ordered them.

So instead of the thirteen I predicted, we may see seven or eight new ones hit the market in the coming months, probably not an un-absorbable number.

All this custom-building got me to thinking…these projects are a clear indication of a thriving, active market, yet they go completely unrecognized in our market statistics!

For simplification, let’s imagine a scenario where, in 2016 Riverside records a total of just 20 house sales, priced between $1.5M and $2.5M. All of them get torn down by the buyers who then hire builders to build new ones. Riverside stats would therefore indicate the following: 20 sales, average price $2,000,000.

But where’s the statistic showing all that additional economic activity? A year later, there are 20 new houses worth $4.5M+, but no recognition of that fact.

This, my friends, is what I would call “invisible prosperity”.

P.S. By the way, the sales history of 145 Riverside Avenue provides a nice, neat little picture of Riverside’s price performance in the last decade or so. Here’s how 145 Riverside Avenue’s price changed since 2004:

2004   sells for $1,285,000.

2005   sells for $1,320,000.

2015   sells for $1,500,000.

During that eleven year history, not one red cent was invested in this house! The 2004 people lived in it for a short time, but the next couple of owners had it mostly on the rental market, getting a lousy $4,000/month, so the price increase is solely attributable to increased land value.

Now compare that experience to the typical back-country Greenwich property’s since 2004. Remarkable, is it not?

145 Riverside, before! Back in 1955, a charming cape owned by the local window-washer, Mr. Meany. But by 2005, pretty much a run-down dump.