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Deferred Bonuses On Wall Street Really Screwing Greenwich, CT Housing Market

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Time was, you put a house on the market in Greenwich, Connecticut and you got your $35 million asking price in a matter of days- and it didn't even have to come with 26-toilets, a property that would cause a serious bidding war. Greenwich could count on Wall Street to make it rain ka-ching! on people's faces come bonus time and those people would in turn say sure, here's $35 mill in cash, buy yourself something nice and all was right in the world. Now? With this bull shit about putting "greater emphasis on deferred compensation" and "incorporating risk management into performance measures"? It's making would-be buyers think things through and not jump at relative bargains at $15.95 million.

It’s been more than 500 days since Stanley Cheslock put his 26,000-square-foot Greenwich, Connecticut, “dream home” on the market for $17.95 million. The house and its surrounding estate -- custom built by Cheslock in 2003, with a movie theater and 3,700-bottle wine cellar -- is waiting for a buyer who sees the current asking price, $15.95 million, as a bargain. “It’s a steal,” said Cheslock, a co-founder of an investment firm, who has knocked almost 50 percent off the price he was asking when he first tried to sell the property five years ago. “It’s way underpriced.”

Homes priced at $10 million and above are accumulating on the market in Greenwich. They’re moving so slowly that it would take more than four years to sell them all, the biggest backlog since at least 2004, according to Mark Pruner, an agent with Prudential Connecticut Realty. Wall Street’s greater emphasis on deferred compensation, in which a portion of an annual bonus will be paid in the future, has stifled demand, he said. “Our market moves very closely with the financial markets,” Pruner, based in Greenwich, said in an interview. “Deferred compensation has totally hammered the over-$10 million market because people just aren’t getting large amounts of cash, and that market has traditionally been a cash market.”

“Previously, if you got a $10 million bonus, buying a $5 million house wasn’t that big a deal” said Pruner, who estimates that about half of all homebuyers in Greenwich work in the financial industry. “If you get $20 million -- $3 million in cash and 17 in deferred compensation -- are you going to borrow another $2 million in cash to buy a house? I don’t think so,” he said.

Thanks- for nothing.

Priciest Homes Languish In Greenwich, Connecticut [Bloomberg]