World 'hedge fund capital' mansions left empty as even the rich start downsizing

Greenwich, CT, USA October 27, 2013 A waterfront estate sits on the shores of Indian Harbor in Greenwich, Connecticut. the town is one of the wealthiest in the United States.
Greenwich, CT, USA October 27, 2013 A waterfront estate sits on the shores of Indian Harbor in Greenwich, Connecticut. the town is one of the wealthiest in the United States.

Homebuyers in the hedge fund haven of Greenwich are favouring smaller properties over the sprawling mansions the US town in Connecticut, New England, is known for.

The average size of single-family homes that sold shrank for a third time, pulling the median price down 17% in the first quarter from a year earlier to $1.69m, appraiser Miller Samuel and brokerage Douglas Elliman Real Estate said in a report on Thursday. Meanwhile, the number of luxury houses on the market jumped 68% to 232.

Too many properties, too little demand

“There’s been a steady shift in the mix,” Jonathan Miller, president of Miller Samuel, said in an interview. “There’s still demand for high-end homes, but nowhere near the density of a decade or so ago. There are too many properties on the market, too many sellers, and Wall Street isn’t the driver of demand it once was.”

In recent years, luxury buyers have got more options in other New York suburbs and Manhattan’s new condo towers. That’s weighed heavily on Greenwich, where sellers aren’t pricing their properties competitively enough, Miller said. Single-family home sales tumbled 25% to 74, the fewest for a first quarter in eight years, according to the report.

Federal tax reform, which capped deductions for state and local levies to $10 000, didn’t help. The average property-tax bill in Fairfield County, including Greenwich, was $10 754 last year - the eighth highest in the country, according to Attom Data Solutions.

Condos - generally smaller, less expensive and closer to transit - are a bright spot. Purchases jumped 33% to 32, with a median price of $681 500, Miller Samuel and Douglas Elliman said.

David Haffenreffer, brokerage manager of Houlihan Lawrence’s Greenwich office, is optimistic. The key spring selling season got started later than usual this year, so the second quarter could show a stronger market, he said.

“We’re seeing a definite pickup in activity,” he said in an interview. “Our agents are wall-to-wall busy with showings, there are negotiations going on and contingent contracts and pending deals going on now.”

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