Time was, you needed a bag filled with at least $10 million in unmarked twenties to buy a house in Greenwich, CT, where many a multi-billionaire hedge fund manager reside, and it's a legitimate insult to have a newspaper claim your home is a measly 14,000 square feet. Now? Thanks to the global financial crisis, job cuts, and bonuses that leave people sobbing under their desks? Sellers no longer have the luxury of standing their ground and waiting for someone to come along who appreciates their Bloomberg Terminal-shaped pool and the $50 million price tag that comes with, allowing practically anyone to buy in, and even those who have the means to spend 8-figures on a house, on the spot, no questions asked, are holding out for bargains, like common riff-raff.
For Mari Nuzum, who spent three years searching, it’s the best time to buy a home in Greenwich, Connecticut. She, and her husband Richard, bought a six-bedroom Colonial revival in the back-country neighborhood for $3.85 million. A year ago it was listed for $4.75 million. “I had in my mind exactly what I wanted for our family,” said Nuzum, who moved in July with her husband, president of investments at Mercer Global Investments Inc., and their four children to be closer to school and within commuting distance of New York City, about 40 miles (64-kilometers) to the south. “My husband said, ‘Just wait, the prices will keep going down.’” The sale of the almost 10,000-square-foot (929-square-meter) property illustrates the shifting fortunes of real estate in Greenwich, home to some of the world’s top bankers and money managers. Five years after the collapse of Lehman Brothers Holdings Inc., which led to thousands of job cuts on Wall Street, smaller bonuses and a paralyzed housing market, the town is experiencing a revival in home transactions as sellers reduce prices and buyers set their sights lower, forgoing the $10 million-plus properties that helped define the boom years.
Lower bonuses, an emphasis on delayed compensation, and the possibility that banks could claw back pay in the future means some finance professionals have set their sights lower in Greenwich, according to David Haffenreffer, a real estate broker at Houlihan Lawrence, a Westchester, New York-based firm that opened a Greenwich branch this month. “Instead of that 6 million, 7 million or 8 million-dollar home, they’re buying a 3, 4 or 5 million-dollar house,” Haffenreffer said. “If you know you’re going to be making the money, but can’t take it out for a certain number of years or fear it may be taken away from you or you may lose your job, you’re going to be more conservative.”
We got a really good deal for what it was supposed to be listed for,” said Mari Nuzum, whose prior home in Old Greenwich, which features a wine cellar and basement apartment ideal for a live-in nanny, is still on the market. The Nuzums took out a 30-year fixed mortgage on the new property, after paying cash for their previous home. In some cases, only a significant reduction is enough to generate interest. An 18-acre property, nestled between the Tamarack Country Club and a wildflower sanctuary, with its own practice polo field, tennis court, heated pool and enough stables for 30 horses, will be auctioned next month with a starting bid of $1 million, according to Raul Villacis, a real estate agent at Advantage Realty Group Advisors, based in Stamford, who’s handling the sale. The foreclosed property was once valued at $36 million, he said.