What’s Selling Well In Greenwich Right Now

75 Rock Maple, Greenwich (off Stanwich Road), $5,695,000. Came on May 24th, already has a deal! This was a very smart asking price. We’ll have to wait for the closing, but I won’t be surprised if it had a little bidding war.
List: Helene Barre
Sell: Max Wiesen

You want the truth? You can handle the truth, so here it is: houses priced $5,000,000-6,000,000 are trading quite nicely, thank you. How many? So far this year, we’re up to 11 closings, with 6 more pending. For all of 2016, we had a total of 12, so there, my friends, is another clear indicator of that “zippy” market I talked about..

There is a theory among brokers that these $5M-6M buyers are “yesterday’s $10M buyers” who are now spending less not because they don’t have the dough, but more out of a sense of caution. This could be true, I’m not sure, but as I wrote yesterday, I’m certain some percentage of $10M buyers just aren’t here anymore. They’ve stayed in Manhattan or they’ve gone to places like Florida.

Now consider this: If all the Greenwich property owners with houses on the market for $10M+ (there are 41 of them) suddenly decided they needed to sell RIGHT NOW, they would need to slash their asking prices by millions. That would quickly drive down the price of all these houses presently selling in the 5’s and 6’s.

But guess what? High-end Greenwich property owners almost never really “need” to sell. That’s why we have so many on the market celebrating their 5th anniversary, 6th, 7th, all the way up to a few that have been on for FOURTEEN YEARS. So all you sellers in the $5M+’s? Relax, your market value is safe.

 

 

 

 

Will The High-End Drag Down Everyone Else?

If no one buys this Bugatti Chiron for $2,998,000, will that hurt the sales of $90,000 Mercedes Benzes? Gideon says no.

I was belly-aching about the lack of high-end ($7M+) sales the other day to my friend* Chuck Royce, who certainly knows things, and he said “We lost 300,000 financial jobs and those buyers just aren’t there anymore”.

I won’t argue with the Voice of Royce, certainly the government-caused melt down of the housing industry, followed by the near collapse of the financial sector, took a terrible toll on jobs in the investment business.  But I still think there’s more to this. After all, there are now PLENTY of young couples out there getting into bidding wars over $2M tear-downs, particularly in Riverside and Old Greenwich. It’s one of our busiest segments, and consider the money being spent: they’ll pay anywhere from $2M to $4M+, just for the land, then spend $2M-3M to build the dream house.

Take the folks who just paid $4,325,000 for the right to tear down 206 Shore Road, Old Greenwich: they will be all-in for around $7M when they’re done building. Does that sound like a weak market?

No, what’s going on here besides Royce’s observation of 300,000 eliminated jobs is that young buyers, more than ever, want brand new. That means if you dumped millions into a property 15 years ago, you may not get that money back. Maybe your $12,000,000 house is now only worth $7,000,000, but the buyers are there. Their tastes have changed, but they do exist!

We notice this loss of value most in our extreme high-end properties, but will that erosion inevitably drag all the other prices down? I say no. It’s like the Bugatti example above. Prices in the rarefied categories, whether it be art, property, or automobiles, don’t really have much influence on the rest of us.

 

*You qualify as my “friend” if you can reliably pick me out of a police line-up.

How Real Estate Gets Sold

17 Hemlock Drive, central ("in-town") Greenwich, last ask $6.995M, now has deal.

17 Hemlock Drive, central (“in-town”) Greenwich, last ask $6.995M, now has deal. List: Marjorie Pastel   Sell: Julie Chen

At first blush, this might look like a disappointing result. It started at $11,000,000 a little over a year ago, had three price reductions, down to $6,995,000, and finally, finally gets a deal.

So, did the broker over-price it or was it the owners? I don’t even care, because either way, that one-year process is completely normal, particularly in this price range. Even if the broker had recommended an initial ask of $6.995M (which might have triggered a bidding-war), there is no way on earth the sellers would have agreed to it and, in fact, they probably would have given the listing to a different broker!

As a broker, you get absolutely nowhere in this town by suggesting a sensible asking price. There are exceptions, of course, like the case last month where a broker recommended an asking price of $4,200,000 to a waterfront seller. The seller thought that was “too high”, and told the broker to list it for $3,700,000, and guess what?  A bidding war erupted, and it’s selling for…$4,200,000!

But that sort of seller is as rare as can be. Greenwich sellers, you’ll recall have three favorite sayings:

We don’t need to sell!

We’re in no hurry!

All it takes is one!

That’s simply a fact of life around here, and brokers have had to adapt to it. You price where the sellers tell you to, and you “try” that price for as many months as they can stand. Eventually they get sick of the process and, if you’re a good broker, who’s been communicating market data to the client the entire time, you are still there when they’re ready to cut the price!

All indications suggest listing broker Marjorie Pastel did everything right.

 

Does One Example Prove Anything?

524 North Street, fetched $5.2M in 2008, sells again, this time for $3M.

524 North Street, fetched $5.2M in 2008, sells again, this time for $3M. List: Lee Prince  Sell: Edineia Bickerstaff

So yeah, no, one example proves nothing! But for blogging purposes, it sure does save time researching the market! But seriously, I really do believe this one example, 524 North Street, neatly sums up the whole “real estate collapse of 2008” story quite neatly.

You students of history will recall, the property was owned for five years by interim Citibank Chairman, Charles Prince (he paid $4.475M in 2003). He put it back on in January 2008, for $6,150,000. The market declared that too high, so it was reduced to $5,850,000 in April, finally striking a deal in July, and closing, are you ready? August 20th, 2008, for $5,200,000. Just think about that: August 20th!

Late August, 2008, Bear Stearns was going under, Lehman Brothers was about to disappear, the whole financial world appeared to be crashing, and the absolute last one out the door was….? Chuck Prince!

I seem to remember hearing that the listing broker had to twist his arm to take the deal, but I could be wrong about that. Prince also agreed to replace the exceedingly expensive cedar roof (a wise decision if it kept the deal together).

So now, eight long years later, the place sells again, this time for a measly $3,000,000. Does that mean the market for mid-country is really, truly still down 42%? No, because as nice as this place showed, it still looked dated and tired. Even in an unchanged market, it still wouldn’t have reclaimed that $5.2M.

Yes, the land value dropped during those eight years, but that doesn’t tell the whole story. If the house had been kept up-to-date, it might have sold for a better price, maybe even one million dollars better.

Listing Agent: Lee Prince

Selling Agent: Edineia Bickerstaff

 

If At First You Cannot Sell, Rent Rent Again

15 Terrace Avenue did NOT sell for $3.795M, but it rented for $14,000/mo., how'zat?

15 Terrace Avenue did NOT sell for $3.795M, but it rented for $14,000/mo., how’zat? Note: Link is for all three properties mentioned here.

Not everyone has this option, of course. If, for instance, you need the proceeds from the sale of one home to finance your next, you cannot go the rental route. On the other hand, builders have used the rental “escape-hatch” for years and years, typically when they’ve over-priced their new mansion and can’t face that reality (or can’t convince their investors to face it).

Even during the extreme slow-down/crash of 2009-2011, Greenwich rental rates hung in there, saving many a builder butt. You say no one wants your $7,000,000 spec house (which is actually worth $5.3M)? No problem, someone will gladly pay you $30,000 per month to rent it! $360,000 per year kinda takes the sting out of holding it, don’t it, Bunky?

Here are two more examples of recent (Riverside) rentals of brand new houses. These rental amounts are amazing…

14 Palmer Terrace rents for $14,750/mo (was offered for sale).

14 Palmer Terrace rents for $14,750/mo (was never offered for sale).

42 Hendrie Avenue, directly across from Eastern Middle School, di NOT sell for $2.595M BUT did rent for the princely sum of $11,375/mo.

42 Hendrie Avenue, directly across from Eastern Middle School, did NOT sell for $2.595M BUT did rent for the princely sum of $11,375/mo. Suh-WEET!

 

All In The Same Town

Stop and think about what you actually get for your money in the Greenwich backcountry vs. the Old Greenwich/Riverside sections of town; you’d swear we were using different currencies, depending on where in town you buy…

Here’re a couple of examples: both these properties recently sold for around a million and a half, but what a difference, just in lot size alone! Yet, it’s the same number of US dollars, and I guarantee both buyers are perfectly happy with what they got and wouldn’t even consider swapping with each other.

14 Irvine, Old Greenwich, CT, closed at $1,538,888 (for that you got a nice little house on a sprawling .15 acres!)

14 Irvine, Old Greenwich, CT, has closed at $1,538,888. For that, you got a nice little house on a sprawling .15 acres (imagine a square that measures 80′ X 80′ !).

67 Sumner Road, Greenwich closes at $1,550,000. For that, you agree to live 8 miles outta town BUT, you get a nice big 5-bedrm contemporary on 4.87 acres, a pool, a tennis court, decks, terraces, 5-car garage, etcetera, etcetera, etcetera!

67 Sumner Road, Greenwich closes at $1,550,000. For that, you must agree to live 8 miles outta town BUT, you get a nice big 5-bedroom contemporary, 4.87 acres, a pool, a tennis court, decks, terraces, 5-car garage, etcetera, etcetera, etcetera!

14 Irvine

list: Marta Stroll

sell: Dorothy Salisbury

67 Sumner Road

list: Bettina Hegel

sell: Lee Prince

 

The Market’s Up! No Wait, It’s Down

See, here’s why this business is tough, at least, the business of trying to figure out market direction. These two properties have both sold twice in the last year, one went up in price, the other went down. One’s “close to town”, one is way back-country, does that explain it? Are back-country Greenwich properties still dropping, is that what we must conclude?

I, for one, am not sure.

504 Indian Field Road, just inside the gates of Mead Point, sat on the market for a few years, finally sold Feb 2015 for $2,501,000. Now it has sold again,  no changes made, for $3,000,000.

504 Indian Field Road, just inside the gates of Mead Point, sat on the market for a few years, finally sold Feb 2015 for $2,501,000. Now it has sold again, no changes made, for $3,000,000. List/Sell: Jill Kelly.

528 Riversville Road, nice tear-down on 4 acres, got $2,000,000 Jan. 2015.  Came back on a few months later at $1.950M, later reduced to $1,690,000, now has contract. List: Jeff Jackson.

528 Riversville Road, nice tear-down on 4 acres, got $2,000,000 Jan. 2015. Came back on a few months later at $1.950M, later reduced to $1,690,000, now has contract. List: Jeff Jackson.