WSJ catches up with For What it's Worth

I’m outta here!

Wealthy Greenwich Home Sellers Give in to Market Realities

After four years on the market, and three price cuts, a stately Colonial-style home on Greenwich, Conn.’s tony Round Hill Road is being sold in a way that was once unthinkable in one of the country’s most affluent communities: It is getting auctioned off. Once asking $3.795 million, the four-bedroom property will be sold May 18 with Paramount Realty USA for a reserve price of just $1.8 million.

Seller Isaac Hakim, a real-estate investor, said it is time to move on. “We are ready to sell and I don’t want it to drag on,” he said. After raising their children there, he and his wife moved to Florida several years ago. 

While luxury home auctions are utilized in other parts of the country, they have rarely been seen in markets like Greenwich. Once a beacon for Wall Street’s top brass and still one of the richest towns in the U.S., Greenwich is facing a slew of issues.

Many wealthy New Yorkers are opting to live in the city, rather than in the suburbs. Some of the wealthiest, like Mr. Hakim, have decamped to Florida in search of more favorable tax rates. Banking executives who propped up the market with their yearly bonuses have also experienced cuts in compensation

The seemingly never-ending slump is leading some sellers to accept less—sometimes a lot less. Owners who paid top dollar for their homes in the Fairfield County town in the mid- to late-2000s are routinely selling for less than they paid. Dramatic price cuts are the order of the day. There were 45 properties in Greenwich priced at more than $5 million that had their price reduced by 10% or more in the 12-month period between April, 2018, and March, 2019, according to Realtor.com. Realtor.com is owned by Move, Inc., a subsidiary of Wall Street Journal parent News Corp .

Attorney Frank J. Gilbride II said one of his clients recently sold his home for $11.18 million, after buying it for $14.7 million in 2007. “We’re finding that the larger back country homes have not been selling recently, because the new buyers don’t want to maintain 10 acres of grass,” Mr. Gilbride said. “A lot of sellers are taking hair cuts of $1 million or more just to move on.”

The median price for a home in Greenwich dropped by 16.7% last year to $1.5 million in the fourth quarter of 2018, according to a recent report by brokerage Douglas Elliman. On the luxury end of the market, characterized by the top 10% of sales, prices dropped by 18.8%. Mr. Miller said that trend continued into the first quarter of 2019, estimating that the median price was down by more than 25%.

The average time a luxury home sits on the market in Greenwich is 357 days from its most recent price adjustment, Mr. Miller said. The only segment of the market performing well appears to be smaller, entry-level homes close to the train station, which are being snapped up by a new generation of buyers. The lowest priced condos currently on the market in that area start at around $330,000, according to Zillow.

Note that ““average time a luxury home sits on the market is 357 days from its most recent price adjustment; most of these homes have sat for far longer, taking price cuts all along. Thomas Peterffy’s Conyers Farm property at 25 Lower Cross Road, for instance, sold in 2017 for $21,000,000, 790 days after he put it up for sale at $65 million. He’d paid $45 million for the place in 2004 and, rumor has it, sunk at least an additional $20 million into renovations. His last “price adjustment” was to $29 million and even then, it turned out he had $8 million to go.