Attention Real Estate Contrarians!

A spec story gone bad. 170 Old Mill Road fetched $8.850M, 2006. Closed today for $4.9M.

A spec story gone bad. 170 Old Mill Road fetched $8.850M, 2006. Closed today for $4.9M.

“Honestly”, you’re saying to yourself, “enough about spec houses, surely!”

I agree. After this, no more, but I couldn’t resist this particular example from today’s Greenwich Board of Realtors sales report: It is precisely examples such as this that cause all the confusion about buying a spec house…

170 Old Mill Road just closed at $4,900,000. The owners paid $8,850,000 in 2006 (you mathematicians will quickly calculate that decline at a hefty 44.6%). Why did this happen? Did the house smell like a cat box? Ugly wallpaper? Bus station built next door?

Nope, the explanation is that things got a bit “frothy” in Greenwich’s backcountry during those years. I guarantee that if the buyers had taken their $8,850,000 and bought a brand new mansion on, say, Riverside’s Club Road, the house would be worth at least that today.

The point is, it’s not the fact that it was a spec house, it’s the location of the spec house. Get it?