Has Greenwich Got Its Groove Back?
But has the housing market in the jewel of Connecticut's Gold Coast really recovered as dramatically as has been recently reported?
Greenwich, an old-money enclave 40 minutes northeast of New York City, has a median household income of $126,549. But it's the real estate deals in the town of 60,000 that produce the kind of numbers that really get noticed. Signs in the real estate agency storefronts on Greenwich Avenue recently touted home sales in the $5 million range. Indeed, Some 33 houses sold in Greenwich this past January, significantly more than the paltry seven that changed hands in January 2009.
Of course, the main reason the good times are back is that 2009 was as bad as they come.Russell Pruner, owner of Shore & Country Properties in Greenwich, recently told the New York Times that 2009 would "end up the worst year in the history of Greenwich real estate." By Pruner's estimate, residential real estate values in the area have plummeted 25 to 33 percent in the past two years.
A close reading of inventory figures over the most recent two quarters indeed show inventories in Greenwich have declined, as much as 15 percent from the middle of 2009. But offerings in key price ranges, such as the sweet spot $2 million to $3 million category, have actually increased slightly since 2008, according to Pruner's tally.
Barbara Wells, an agent with Prudential Connecticut Realty in Greenwich, told HousingWatch.com it will take one to two years before housing inventory levels return to historically normal levels. As prices in Greenwich have dropped, real estate in the town has gotten more affordable, comparable at times to neighboring towns such as Darien and Westport. Bargain hunters snap up homes as soon as the prices drop below current market levels. But there are still many homes lingering due to unrealistic pricing, leaving a glut of inventory. "Once that gets sold, then you'll see some price stability," says Wells.
Meanwhile, in Westport, another 20 minutes out on the commuter train line, many houses in the $1 million-plus range have lingered on the market for over a year. But things may be starting to thaw. "Homes that did not sell in the first half of last year, and weren't showing much anymore," says Alexander Chingas of the Riverside Realty Group in Westport, "there are several instances where now those properties are finding an audience [at the original asking price]."
Dramatic cuts also skew data as buyers scoop up properties at way-below initial asking prices. In the most remarkable example in Greenwich, the price of Dunnellen Hall, the palatial residence of the late hotel queen Leona Helmsley, was lowered by $75 million in 2009. The listing price for 28-room Jacobean mansion (pictured) was $125 million in 2008. Now you can grab it for $60 million, more than half off!
As you may have read recently, average new home sizes are shrinking nationwide. Greenwich is no exception. But it's all relative, of course. Prudential's Wells says she recently met with a prospective buyer who is looking at properties that can accommodate a 10,000-square-feet residence "and they want to build half of that"--that is, a mere 5,000 square feet. "People don't want to be too lavish anymore, or too showy," she adds. "They don't even want to tell people where they work."
R.S. Granoff Architects, a local architecture firm, has broken ground on a few fresh residences. In the bad old extravagant days, it built mega-McMansions in the 10,000-square-foot-and-over range. Today's plans are more modest, mere 7,000- to 8,000-square-foot "cottages."
It's not that folks in Greenwich don't have the money to spend. It's just that in these recession-minded times, where national unemployment figures still hover at around 10 percent, it seems unseemly to flaunt your green.
In that regard, real estate fits the bill better than flashy cars, jewelry and high couture. No one knows you're spending big on a new swimming pool or a $150,000 kitchen until it's finished. Recent scaled-down home-improvement projects include a new tennis court built on flat instead of recessed land, eliminating $75,000 in additional construction costs and a $1 million renovation of a mansion on Lake Avenue. (A few years back, bad-ass billionaires razed 10,000-square-foot historical mansions and erected even bigger, brand-new palaces.)
It's Greenwich's proximity to New York City--just 40 minutes by commuter train--that makes the Frank Capra-perfect suburban town such a popular nesting spot for overachieving high-earners. With a bucolic town green, white-gloved crossing guards, and summertime parades, it's like America in the 1950s...if everyone back then drove a Rolls instead of a Ford.
But for those bonus bankers who find Greenwich too far from the madding crowd, stray millions culled from the coffers of Goldman Sachs and other investment firms also go a long way in Manhattan. Goldman managing director Henry Cornell, for instance, is adding a fifth floor to his E. 80th Street townhouse, purchased in 2000 for $11.5 million, along with new windows and a sub-cellar. Jonathan Fine, another GS managing director, and his wife just purchased a $6 million condo on Greenwich Street in lower Manhattan. It's a penthouse with 4 bedrooms, 2 1/2 bathrooms and a 1,100-square-foot roof deck.
It seems that the good times are coming back, at least in the havens that Wall Streeters call home.