From the WSJ, hat tip Anuj:
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.”
Some sellers have resorted to renting out their homes. Brian Amen, an agent at Houlihan Lawrence, said one of his clients tried to sell his roughly $3.65 million home for about a year and lowered the price, but recently decided to lease it out in hopes the market would improve in a year or two.
Several prominent owners have settled for significantly less. Earlier this month, music executive Tommy Mottola sold his Georgian-style estate for $14.875 million, or 25% off its original asking price. In December, hedge fund executive Ara D. Cohen, co-founder of Knighthead Capital Management, sold his sprawling 27-room property for $17.5 million—half of what he was seeking in 2015.