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(Bloomberg) -- High-end home sellers in Greenwich, Connecticut, are getting real -- or going away.
After years of mansions piling up on the market, the inventory for luxury homes plunged 21 percent in the second quarter from a year earlier, the most in at least two and a half years, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Owners of the costliest properties, which had been lingering amid so much competition, either cut prices to close a deal, or pulled their homes from the market to wait for a better day.
“They’ve chased the market and they came up without selling so they’ve retreated for now,” Scott Durkin, chief operating officer of Douglas Elliman, said in an interview. “Many times, sellers had an unrealistic perception of the market.”
Greenwich, a town of 60,000 that many Wall Street executives call home, is contending with a shift in consumer tastes since the recession -- away from lavish estates across several acres and toward smaller properties closer to downtown. Owners of luxury homes, the top 10 percent of the market, have taken a while to adjust to the new reality, clinging to lofty price expectations even as their listings remained unsold.
The number of luxury-home sales, defined for the quarter as priced at $4.25 million or higher, was unchanged from a year earlier at 21. Of those deals, 18 were for less than the seller’s asking price. The average reduction was 8.3 percent, or a $498,889 discount, according to Jonathan Miller, president of Miller Samuel.
Perhaps sellers got tired of waiting. Luxury homes that changed hands in the quarter spent an average of 319 days on the market, compared with 218 days a year earlier. The average reflects only the duration of a property’s last listing and doesn’t account for any previous times the home may have been offered unsuccessfully.
Among properties that sold in the quarter was an 8,535-square-foot (793-square-meter), six-bedroom home on Khakum Wood Road that had been on the market since 2008. Back then, the home, on 2 acres (0.8 hectares) with a pool, was listed for $14.5 million and didn’t sell, according to Greenwich’s property listing service. It returned to the market several times since -- at $9.975 million, $7.645 million and, most recently, $6.65 million.
The home finally sold in April for $5.8 million, or 60 percent less than its 2008 price.
“When expectations are lowered, properties sell,” Miller said. “It doesn’t matter what happened in the past. This is now the reset.”
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