No one I know who bought a home in Greenwich twenty years ago expected their purchase price then would be identical two decades later, and they had real estate history to justify their faith. Indeed, for the next seven years, their expectations were met, and houses did increase in value. That all stopped in 2007-2008, and since then, most prices have declined — certainly if inflation is taken into account, and many have fallen. If a seller’s house today can fetch what he paid for it back in the 90s, even with improvements, then he’s lucky.
Case in point is yesterday’s sale of 54 Pecksland Road, which was purchased for $3.5 million, completely redone and expanded by Hobbes, one of our best, and most expensive, builders, in 2009, and closed yesterday for $3.225.
Admittedly, 1919 homes aren’t in vogue today, and Pecksland seems to have fallen out of favor, but this is a gorgeous house in its own way, with three acres of beautiful, manicured lawns and gardens and all in all, a place any buyer might covet —I know that I do — yet it sat on the market for years, suffering the slings and arrows of cruel price cuts, until it reached a bargain price that must have meant a huge loss for the seller. But even a “bargain” today might very well prove to have been too high a price further own the road.
The market is being squeezed: once-super-priced houses are selling for millions less than they might have twelve years ago, and they’re making houses currently asking, say, $3.5 million look like poor bargains in comparison. But the market for what were once million-dollar houses has expanded, pushing prices in the $1-$2 million range up. What was once a $3.5 house is going to pushed down into the high $2s, and existing $2s will start looking, er, “unimpressive”.
Something has to give.