Even in tough times, some things never change. So workmen were busy on Wednesday unloading a Gatsbyesque armada of vintage cars for this weekend’s Greenwich Concours d’Elegance, a show of classic yachts and automobiles from makers like Rolls-Royce, Pierce-Arrow, Lagonda and Cord.
But, alas, in tough times some things do change. So just as harried home sellers elsewhere are deciding to drop prices in the face of the real estate meltdown, some in Greenwich are, too.
The difference is that given stratospheric starting prices for houses the size of mega-malls the adjustments tend to be a little more drastic than that of your neighbor who dropped his asking price from $599,000 to $559,000. Instead, in Greenwich, we’re no doubt seeing some of the biggest price drops in the history of residential real estate.
Take for instance the modest spread on Old Mill Road, billed as “an Elizabethan-inspired Tudor manse of museum-quality details” with pool, tennis court, greenhouse, stable and grazing sheep on 75-plus pastoral acres.
The owner, Mel Gibson — that Mel Gibson — might have preferred to sell in a better market, but with a messy divorce pending, this is the only one he’s got. So the house, originally listed for $39.5 million, after two nearly $5 million whacks is now down to $29.75 million.
Even in Greenwich a $10 million drop in the asking price of a house counts as real money. But the Gibson house is hardly alone. The champ here — and maybe anywhere — is the 40-acre, high-plateau estate on Round Hill Road that had been owned by Leona Helmsley. The 21,897-square-foot house went on the market a year ago for $125 million. The price got knocked down by $30 million in October and by another $20 million in March, which is a $50 million price cut in a year.
Or take the silent colossus on Langhorne Lane, 26,386 square feet with 35-foot indoor lap pool, squash/basketball court, 20,000-bottle wine cellar, tasting room and the rest. It was offered at $28 million and sold for $13.75 million but has never been completed or occupied.
According to Christopher Fountain, a local real estate agent whose skeptical industry blog, For What It’s Worth (christopherfountain.wordpress.com), has made him seriously unpopular locally, there are now 174 houses with asking prices of $4.9 million or higher on the Greenwich market. Of those, 55 are new houses built on speculation. In all, 16 went to contract this year, 9 of them new.
Over the same period in 2007, 50 went to contract, including 21 spec houses.
BY contrast, the busiest part of the market is one that barely existed two years ago: houses for under a million dollars.
The optimistic case is that most sellers are hanging in there, plenty of houses are selling near the asking price and things will bounce back as they always have.
“We’ve become extremely busy lately, wildly busy,” said David Ogilvy, whose firm lists many of the top-dollar houses, like the Helmsley estate. “We’re not as productive as we’d like to be, but you can look and see the same thing has happened before. I think we’re at the bottom now. We may bump around for a while, but I think we’ll be up between now and the end of the year.”
The pessimistic case is that it’s hard to figure out who can afford the empty castles of Greenwich.
“We used to know who would buy those houses — it’s hedge fund kings or someone from Lehman Brothers or old money,” said Frank Farricker, a real estate agent and the secretary of the Planning and Zoning Commission. “Nobody knows who that guy is now.”
Greenwich isn’t your typical town, and there are sadder stories than people stuck with too-big houses in Greenwich, though many builders and others will be wrecked if those big houses sit empty for too long. But the situation is a reminder that this recession, unlike other recent ones, is pummeling the rich as well as the poor and that all of us, in Greenwich or more modest burgs, are in the same boat, with a much better sense of how the world looked a year ago than how it will look next year.
Still, whether a recovery takes 2 years or 10, whether some of those hulking McMansions with the cavernous wine cellars get knocked down before they get sold, Mr. Farricker figures in the end one thing will endure.
“People have been building houses of ridiculous size in Greenwich since the turn of the century,” he said. “I don’t expect that’s going to change.”
Source: The New York Times