My pal Oshrat Carmeil has an article in Bloomberg today: Highest end Greenwich properties are taking the largest discounts since 2008.
The fourth quarter was the best time for luxury-home sales in Greenwich last year. It also had the biggest discounts in almost a decade for the tony Connecticut town.
High-end homes that changed hands in the quarter had their prices cut by an average of 13.5 percent, the most since the last three months of 2008, when the housing market all but froze in the months after Lehman Brothers Holdings Inc. filed the largest bankruptcy in U.S. history, according to a report Thursday by Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
The discounts, in a market that’s still bloated with lavish homes, helped clear some of the backlog. There were three sales for more than $20 million in the fourth quarter. There was only one earlier last year, and none for all of 2016, the firms said.
Owners of Greenwich’s priciest estates are tiring of waiting years to find takers for their properties in a market where buyers are favoring cheaper homes closer to the town’s commercial center. The 19 luxury houses -- those priced at $4.65 million or more -- that sold in the quarter spent an average of 310 days on the market, about double the time for similar properties a year earlier. Many sellers waited even longer: The marketing time doesn’t account for previous unsuccessful attempts at a sale. [emphasis aded — As I pointed out to Oshrat a year or so ago, the "time on market" data supplied by our GMLS is second only to "percentage of sale-to-asking price" in phoney statistical reporting. ]
The most expensive sale of the quarter was an eight-bedroom mansion that belonged to billionaire investor Stanley Druckenmiller. It traded in November for $25 million, 21 percent less than the $31.5 million Druckenmiller sought in March, according to the listing.
It took an even larger discount -- almost 68 percent -- to find a buyer for billionaire Thomas Peterffy’s 80-acre (8.9-hectare) estate in the gated Conyers Farm community. The property -- with a seven-bedroom house, a pool and a 22-stall stable close to polo fields -- sold for $21 million, down from the $65 million asking price in 2015, listings records show.
A long time ago, I was accused of personally ruining the back country market by my frequent remarks on this phenomenon, despite the agents knowing perfectly well that I was simply reporting on observable facts. They seem to have finally admitted this.
With so many properties getting deep price cuts, “the smartest agents are encouraging their buyers to make their offer and see if the seller is willing to counter,” [Scott Durkin, President of Douglas Elliman] said. “They’ll never know until they make that offer.”
I've been giving that advice for ten years now. That either makes me one of the "smartest agents", or there are a lot of slow learners in my profession; I will, modestly, go with the latter.