Chinese Fire Drill Most owners are still just settling into their swank condos at the residences at the Mandarin Oriental, but a few of their would-be neighbors have already put up for-sale signs. A handful of condominiums at the Mandarin at 776 Boylston St. recently changed hands, and more are up for sale. The latest sold was a $5.6 million unit, purchased by Gabriela Beranek Sept. 8. The MLS Property Information Network lists five other condos up for sale, ranging in price from $2.2 to $12.5 million. The residences just opened up for occupancy this summer, but Ken Tuntunjian, manager of Coldwell Banker Residential Brokerage’s Back Bay offices, said many owners have been holding those units for as long as four years. Tuntunjian, an agent for some of the Mandarin properties, said it’s understandable that some owners would sell before getting to move in. A lot can happen to people’s plans in four years, he said: “Life changes – people get sick, they move away. It doesn’t surprise me at all.” While Tuntunjian said he’s seen most condos priced either equally or above their original selling price, one of the listed units has dipped in price from $4.5 million to $4 million after more than 200 days on the market.
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Savvy home sellers who register – for free – on HouseSavvy.com will now get to list their homes on MLS Property Information Network (MLSPIN) at no charge. Walter Hall, chairman of Norwell-based HouseSavvy, says the move “puts the control squarely in the hands of the seller,” and he says his is the first business to make the offer. HouseSavvy is a real estate information site for buyers and sellers to check out market activity and listings, among other things. In addition to MLS, sellers will get access to Realtor.com, Zillow, Google, Trulia.com, Homes.com and “hundreds” of other sites.
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The flurry of activity surrounding AIG has both sidelined action on major federal insurance oversight, and added a new chapter to the longstanding debate, according to local and national insurance authorities. It’s a tug-of-war right now, Steven Morelli, senior editor with InsurenaceNewsNet.com, told The Teller: “People are taking the same events and using them to support their opposite positions.” The arguments, summarized: “Look, AIG’s horrible problems are a prime example of why we need federal oversight of this labyrinthine, state-regulated industry.” The rebuttal: “Wait! The only parts of AIG that got into trouble were those that were regulated by the federal government, or not really regulated strictly at all. AIG’s insurance operations – overseen by state regulators – are strong. Therefore, we should not have federal oversight.” Raymond Guenter, a faculty member at Boston University’s School of Law, said AIG’s story only advances the march of federal oversight in insurance. The bottom line is that the federal government had to bail out an insurer. It’s hard to keep arguing for state regulation with that fact hanging over everyone’s head, Guenter said. Not that the industry is going to get officially changed anytime in the near future, since those questions have been swept aside in the wake of this month’s financial debacles. The regulation question had entered a new chapter last spring when Treasury Secretary Henry Paulson introduced a plan to establish an Office of Insurance Information, which would give a federal license for insurance companies. But U.S. lawmakers have removed that question for the time being, presumably to be revisited when the dust settles.
Major Catastrophe
Lots of people have criticized the three major catastrophe modeling companies’ enormous influence on the insurance industry. MIT professor Kerry Emanuel is possibly the only local critic who also does some catastrophe modeling work of his own.
Emanuel runs a company, WindRiskTech, that caters to different clientele but has essentially the same goal: trying to determine exactly how much damage certain storms could cause. He doesn’t consider himself a competitor to major catastrophe modelers – he sells his information to other entities, such as the World Bank or territorial governments in places like Australia – but he weighs in on catastrophe issues with several insurance company boards.
And he’s decided he doesn’t like a couple things about the big catastrophe modeling companies: First, their secrecy about their methods, and second – from what he does know about them – they use too much emphasis on statistics from past storms.
“What I think is wrong with a lot of the existing wind catastrophe models is that they rely upon history. And history is too short and too flawed to do a proper job of it,” he said.
Emanuel uses pure physics – a “deterministic numerical simulation of a hurricane” to simulate thousands of storms and estimate wind damage potential. The major catastrophe modelers, such as Boston’s AIR Worldwide, simulate storms by using climatological and environmental factors, Emanuel says, which includes a reliance of how hurricanes have acted in the past.
So who has a better accuracy rating when the real thing comes around? Well, we won’t know, Emanuel says, until history has given us about a thousand more years’ worth of statistics to compare. â–
