Last month, we reported that wealthy homeowners in one of America’s prototypical enclaves of wealth and privilege have begun to pull their stately mansions from the market as demand for high-end properties in Greenwich, Conn. Has plunged in recent years.
Despite sellers slashing prices, so far, only three Greenwich homes have sold for more than $10 million. In response, new listings have dropped 31% as sellers opt to wait out the gully in hopes of securing a higher price.
But as it turns out, one of those three homes belongs to Stanley Druckenmiller, the billionaire founder of Duquesne Capital, who sold it at a considerable discount, according to Bloomberg.
Billionaire investor Stanley Druckenmiller sold his eight-bedroom Greenwich mansion for $25 million, the biggest sale this year in a Connecticut town where high-end listings have been piling up.
It took a discount to seal the deal. The purchase price was 21 percent less than the $31.5 million the seller originally sought, according to the listing. Druckenmiller bought the 12,238-square-foot (1,137-square-meter) home in 2004 for $23 million.
Druckenmiller’s sale was the third in Greenwich this year for more than $20 million, and the second to find a buyer after the owner agreed to a price cut, according to data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. There were 180 luxury homes on the market in Greenwich at the end of the third quarter, the firms said.
Once upon a time, a nonexistent income tax (Connecticut became the last state in the US to institute an income tax in the early 1990s) and low property taxes - not to mention the gold coast tableau of beautiful beaches and lush greenery - made Greenwich one of America’s most sought-after zip codes.
But two income-tax hikes pushed through under Democratic Gov. Dannel Malloy, not to mention a looming fiscal crisis, have seriously diminished Connecticut’s popularity. The fact that Connecticut is a mostly suburban state – at a time when young people are migrating toward urban surroundings – certainly isn’t helping property values.
There were only five sales for $10 million or more in 2015 and 2016, the slowest pace in this category since at least 2008, and less than half the average, according to brokerage Houlihan Lawrence. As of late October, there were nearly 40 properties listed for $10 million in and around Greenwich. At the current pace, it would take at least seven years to sell them all at the current pace.
One would think, with stocks at record highs, the “wealth effect” would lead to an increase in purchases of luxury homes. However, perhaps the most significant factor affecting the Greenwich real-estate market is a shift in trends. Younger couples favor urban environments – meaning they’re more likely to opt for a Manhattan apartment instead of an expansive home in the suburbs.
As one real-estate agent put it, small is the new big.