Sold: The story behind Greenwich’s million-dollar mansion sales
Updated 12:37 pm, Monday, October 23, 2017
On the surface, Greenwich’s high-end housing market seems to be staging a comeback.
Numerous million-dollar mansions have closed in recent months. The $22 million sale of North Court in midcountry made headlines in September followed by a Georgian Colonial in Indian Harbor going for more than $20 million in the first week of October.
If another property closes above the $20 million mark this year, there will be a new record for the most properties sold in town within a year for $20 million or more, according to Mark Pruner of Berkshire Hathaway N.E. Properties.
While the number of Greenwich homes sold in the third quarter fell by almost 24 percent when compared to last year, an array of high-end sales helped raise the average sale price for the quarter by nearly 21 percent to $2.67 million, as reported by Jonathan Miller in a Douglas Elliman market analysis last week.
“These increased high-end sales have powered the total dollar value of all sales upward,” Pruner said in his report on September home sales. “For the last three months we’ve had a real estate market that we haven’t seen post-recession: a good high end and a mediocre middle. September took that up a notch.”
Active high-end market
For months, homes listed for a $1 million to $2 million have driven most of Greenwich’s market. The tide appeared to change last month with around half of sales closing for more than $2 million.
According to Pruner, home sales just between $6 million and $7 million have ballooned by 500 percent, totaling $91.5 million this year compared to $18.5 million in 2016.
These favorable numbers portraying a market on the upswing surprised Jackie Hammock of Coldwell Banker’s Greenwich offices while completing her own third-quarter market report. “I started my analysis feeling like the market was terrible in the third quarter, yet when I looked at the overall numbers, everything was good,” she said.
“Based on my listings and meetings I’ve been in, it seemed like fewer people were walking around to showings and stuff; yet sales showed the average price was up for the quarter and up for year-to-date,” Hammock said. “So I started digging to see what’s going on.”
A closer look at the history of some of those especially expensive homes that sold this fall depict a more nuanced narrative in Greenwich’s luxury real estate market.
A closer look
Among homes that changed hands in the past decade, about a third that sold for $1.4 million or more last month dropped in value from their previous sale, according to a Hearst Connecticut Media analysis of Greenwich property records.
Hammock said she found 11 homes in the third quarter that sold with “huge reductions,” she said. “The more I got into it the more it screamed out to me. Some people were at the point that they had to dump the house.”
An extreme example includes a home on Upper Cross Road for which its owner paid $13.5 million in 2012, according to Greenwich property records, but it closed for just $7.5 million in September. Another property on Lake Avenue was originally listed for more than $10 million, according to Hammock, but it closed for several million less.
“We did have big sales that pulled up our stats, but it’s when you look at what’s underneath that it’s not as fine,” she said.
These findings prove something Hammock and many other local Realtors say they’ve been telling sellers for years: homes must be priced well to sell, and long gone are the days when sellers could list their homes and “just see what happens,” Hammock said. “We have to look at what the market is today and set the price based on what buyers want.”
The financial crisis almost 10 years ago caused a giant wave to crash on Greenwich’s housing market, as Peter Janis of Berkshire Hathaway N.E. Properties described it. Depending on the sector of the market, many homes values have recovered, he said, but not all have or ever will. He attributes that partially to a “smaller wave that hit after the crisis. ... It was a double whammy for some because the crisis hit and now their home is no longer in fashion so buyers don’t want it, because they want new construction and to be close to town.”
‘market is shedding its disconnect’
Those sellers who unloaded their homes for less than they originally listed it, or maybe even bought it for, represent the trend that sellers are finally “more willing to meet at market price,” Janis said. From his experience, many of them “say ‘It is what it is,’ and move forward because they’re looking at it as a business transaction. They take a loss and move to the next thing,” he said.
Another contributing factor as to why some of Greenwich’s priciest homes have remained on the market for months, sometimes years, and slashed their list prices without generating a buyer is that sellers’ “aspirational pricing never had any basis in reality,” according to Miller of Miller Samuel Real Estate Appraisers and Consultants.
Homes languishing without interest have prompted some sellers to take them off the market altogether. This contributed to the number of luxury home listings decreasing by 31 percent last quarter compared to a year before, Miller said, adding he believes this is a good sign for Greenwich.
“It’s very positive that the market is shedding its disconnect in perceived value at the high end versus what the market is willing to support,” he said. “Part of the problem has been a lot of overpriced listings not moving. In all these luxury markets — Manhattan, Westchester, Fairfield, the North Shore and the Hamptons — it’s all the same scenario: all these listings are coming off the market because they were never in the market. The brokerage community continued to list these properties, so they became the perceived market. This is a significant improvement in conditions because what we’re having is an acknowledgment that those homes weren’t priced correctly.”
Without so many overpriced homes skewing views of market value, other sellers are less likely to think their homes should be listed for more than buyers are willing to pay, Miller said.
“The market is still active and vibrant,” he said, “it’s just as I’ve been saying: soft at the top. The take away is relatively positive from the perspective of the overall market, but not as positive for the high-end market.”
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