Greenwich Homes Get Cheaper and Finally Start Selling Again
(Bloomberg) -- The slumbering housing market in Greenwich, the Connecticut town favored by Wall Street’s financial elite, jolted awake in the first quarter as buyers emboldened by the rising stock market committed to purchases -- as long as they didn’t have to pay full price.
Home sales in Greenwich jumped 29 percent from a year earlier to 126 deals, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Buyers took longer to deliberate before signing contracts, but sellers coaxed them off the fence by offering discounts averaging 7.9 percent off the last asking price, the most in four years.
“Buyers are now realizing, ‘OK, I’m watching these properties and I’m going to make a play for it,”’ Scott Durkin, chief operating officer of Douglas Elliman, said in an interview. “‘Let me see how negotiable they are.’”
Greenwich’s home market, assailed last year by billionaire Barry Sternlicht as possibly the worst in America, is finding a new footing as sellers loosen their grip on pricing aspirations that were rooted in boom times. More than half a million Wall Street jobs have vanished since the financial crisis and, these days, buyers in the town of 60,000 are more cautious, looking for smaller, cheaper properties instead of palatial estates on several acres. They’re also demanding a bargain, and sellers -- many whom have been trying to recoup prices they paid years ago -- are starting to concede.
In the first quarter, sellers in Greenwich got about 92 percent of their initial asking price on average, brokerage Houlihan Lawrence said in a separate report Thursday.
“Stretching to afford a house they will eventually ‘grow into’ is a thing of the past for many homebuyers,” the firm said.
Millennials forming new households in Greenwich today “know the history of the housing bubble,” and are more focused on mortgage rates and how much cash they have on hand after their monthly payments, Houlihan Lawrence said.
The lower the home was priced, the more demand there was. There were 48 deals for $1 million to $1.99 million in the quarter, a 37 percent jump from a year earlier. Transactions for $2 million to $2.99 million more than doubled, to 27. Sales of homes priced below $999,999 declined, in part because there were fewer such properties listed for sale, according to Houlihan Lawrence.
Even the luxury market saw an increase in transactions as sellers offered price cuts averaging 11 percent, the most in five years, according to Miller Samuel and Douglas Elliman. Deals in the luxury category, defined in the first quarter as $4.16 million or more, rose 21 percent from a year earlier, the firms said. The 17 high-end homes that sold had lingered on the market for 278 days, up from 181 days a year earlier.
The five most expensive sales in the quarter all came with a discount. The priciest, a nine-bedroom lakefront house on Oneida Drive with an adjacent vacant lot, closed at $19.3 million after an initial listing at $21.9 million.
On Hurlingham Drive, a seven-bedroom home on 13 acres (5.3 hectares) with a 3,000-bottle wine cellar, a tennis court that converts to a hockey rink and a globe-shaped observatory with retractable roof, sold for $8 million. It was first listed for sale in 2014 at $12.4 million.
Even with discounts, sales of expensive homes like that one contributed to a 12 percent increase in the Greenwich-wide median price to $1.87 million, Miller Samuel and Douglas Elliman said. It was the first year-over-year gain in six quarters. Still, prices remain 20 percent below the town’s peak in the second quarter of 2006, when the median was $2.33 million.
“That kind of market no longer exists,” said Jonathan Miller, president of Miller Samuel. “If it comes back, it’s not tomorrow.”
North of the Merritt Parkway, a section of town that includes oversized estates on winding, two-lane roads, there were 13 sales in the quarter, up from 11 a year earlier, according to Houlihan Lawrence. The median price of those deals fell 25 percent to $2.4 million.
In the Riverside section -- in the southern part of Greenwich, with a peninsula that juts into Long Island Sound -- the median sale price jumped 18 percent to $1.88 million, the brokerage said. There were 18 transactions in the first three months of the year, compared with 14 a year earlier.