Governor's Island
 

Got a real estate brochure this past weekend from Coldwell Banker and noticed 13 houses on Governors Island for sale. Seems like an unusually large percentage, even for these financial times. Is there something going on there? Some reason so many are trying to bail out?

My question is how many properties are there on Governors Island? What percentage of homes is 13... there is no point behind this, just a curiosity...

Now as for way, my guess is that you have to look no further then the stock market.... Stocks are not generating revenue like they where a few years back... how be it not as bad a some of us, I would imagine that some of the Wealthy crowd have had to put their "vacation" homes up for sale, hope to sell one of 5, just to make things a little easier on themselves. I think it is just another sign of an over all bad economy effecting absolutely everyone.

A few other thoughts
 

First, the high end of the real estate market is not moving. As such, there is clearly an inventory buildup at the high end of the market. A number of those homes have been on the market for a while.

Second, if you look at just the operating costs of those homes, it is staggering. Taxes alone are between $50k to $100k per year. I usually figure around 5% per year for operating costs. That is several hundred thousand a year for some of those houses.

Third, the economy is lousy. If you look at the U9 unemployment numbers, we have somewhere between 20% to 30% real unemployment in this country. Can you say "depression?" :confused:

Forth, these are second homes and from what I can tell they are lightly used. I rarely see people outside when I go by on the boat.

Jetskier:cool:

Ibelieve I heard a stat there is over 100 homes on the island.....

$50k to $100k in property taxes? :eek:

Based on the current tax rate of $17.37 per thousand you are very little high on your taxes guess. I looked up a few property values on Edgewater on Governors Island (public records are very usefull) and using $1.8 mil as a tax card property value the taxes are $31,266.00. Still a lot of money but no where near $50 to 100K you estimated. A $3 mil property value would have taxes of $52,110.00.

There is a home on the market for over $7M. By your math that would be $121k in taxes.

Unfortunately asking or sold price has nothing to do with a properties value for tax purposes. That is determined by the town's tax assessor.

The property you are speaking of has a tax value of $2,480,490.00 with a property tax of $43,086.11. Asking price is $7,300,000.00 and it is 59 Broadview Terrace Gilford. Built in 2008. It is the most expensive property on the market in Gilford.

I recall seeing an auctioneer's ad about one month ago for a mortgage foreclosure auction for a very nice looking Gov Isl home. Anyone have any info on it?

The house is assessed below completion
 

That is the correct current tax rate. However the house has been under construction and likely not assessed at market value yet. Based upon a sale of $7M (if it goes in that neighborhood), the tax rate will certainly not stay at $43k. I am sure that even if it does not sell, the rate will go up now that it is completed.

Anyone who can afford a $7 million home should be able to afford $10,000 per month in property taxes. Heck, my sister pays $1000 per month on her $700K home in Pennsylvania. :eek:

Not based on this listing it's not... (look at #1 on the list)

http://www.lakesregionrealestate.com...s&searchid=413

Missed one - sorry :)
But lookiing at that one they are valued at $3,825,770 and have taxes of $66,453. And they have not sold, yet. FYI - Built in 1999.

Jetskier - the property at 59 Broadview is at full finished value per the tax card - effective build year is 2008. Its value will not be reviewed again until the next time the town re-values all property in town. The sale price of a property in NH does not effect the assessed value. The tax rate changes every year though.

Something sick about paying over 60k to live in your own home.

Well....as everyone knows....that's the New Hampshire Advantage....you get the assumed-to-be out-of-state waterfronters to carry the heavy tax load because all of the New Hampshire non-sales, and non-income taxes get downloaded into the local property tax....a plan that has worked well for about 100 years or so.


Today's www.nytimes.com - July 9, 2010, has a front page article titled "Biggest Defaulters on Mortgages Are the Rich" which seems to be relevant to Governor's Island homes.

Here's the 2nd and 3rd paragraphs:

"Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars is seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic."

Definately worth reading the article! It's in the 2-dollar printed paper edition. Is it in the internet edition? Yes it is, down at #1 on the most read list.

Even worse, is paying 60K to live in your home that you paid for with money that was taxed already.

Is that ever the truth!!!!

Built them too big & grand
 

Somehow knew this day would happen. When some of the "affordable" old school lakehouses were bought up and replaced with HUGE mansions that are difficult & expensive to maintain, we knew there would be a day when the owners would have to bail and now who can afford to buy theses places?!!

Some owners probably don't have the $$ anymore to pay all the people it took to take care of their properties and realized how much work it is to take care of it themselves. Too bad they didn't build smaller, easier to maintain properties....

I've always said, if I win the lottery I would purchase one of these mansions and tear it down so I can replace it with an old school family lakehouse with lots of trees!!

Come on who here is really surprised at what's happening to the real estate market in this state, not just in the lakes region? I am so sick to death of hearing the "well the rich can afford it" or "if you can afford a 2 million dollar house you can afford 50K a year in taxes". That can only work for so long before the "rich" which is such a subjective term these days, decide to pack it in and say no more divest of any frivolous investments/property circle the wagons and attempt to protect their holdings. That's what's happening all over the country not just here. That is why the economy is still in the dumper, why jobs are not being created and why things will continue to deteriorate and more rapidly over time.

This is probably what I would consider to be one of the most brilliant observations ever put to words and so fitting for this very discussion:

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it. Dr. Adrian Rogers (1931-2005)

Thanks MAXUM for that quote. You must have read the Fountainhead and Atlas Shrugged by Ayn Rand.

Amen!
 

Amen to that Maxum!!!

Dan

Wealthy but no cash
 

In my business I get to know the financial situation of many wealthy people, and although people may have a lot of assets they usually do not keep much cash. Wealthy people become or stay wealthy by investing their money in a variety of assets such as businesses, real estate, stocks & bonds, not by accumulating cash.

So when there is a hiccup in their income from their profession or business they have to convert another asset to cash, and this can take some time in the case of real estate or business ownership interests, or be painful in the case of stocks and bonds whose prices are lower now. Or they can borrow against other assets, which can be difficult or impossible.

So selling the second home is one way to convert an asset to cash, but often a slow and painful way. In the meantime, cash from other sources musy be used to pay ownership costs for a property that is no longer used or wanted.

It can be verry difficult to be wealthy.

Make me wealthy and I'll let you know how difficult it is:)
Seriously though it must be very hard to have to sell any home on our wonderful lake. If you choose to sell that is much different than having to sell. Lucky to have this simple little home and no intention of selling it.

Times, they are-a-changin'...
 

Let's face it, the days of "funny money" are gone (for the most part). Soft-seconds on the new mortgage, ridiculous credit lines and over-inflated property values are all gone (or going) away. And now people are going to have to be responsible for their actions, and their bills! (Imagine that!? ;) ). You'll start to see property values (sale prices) adjusting to a more realistic level, and there will be collateral damage in the process, but you need to break some eggs to make an omelet. A house that is assessed for <$4 mil, but is on the market for $12m - you need to find a sucker to buy that, or someone with a lot of disposable income that just HAS to have it. :rolleye2: As someone mentioned, portfolios are taking a bit hit across the board, and unless you are very well diversified and have a nice stock-pile of cash to weather the storm... well, you see what happens.

Just like water, the economy will find it's balance point - just not sure what - or when - this will be.