Can an 12,000 sq.ft. (or larger) mansion still sell in Greenwich?
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11 Skyridge Rd
Eleven Skyridge Road, which sold for $13 million in 2010 after just 129 days, hit the market yesterday at $13.5 million. Lightning might strike twice, but I'm not seeing much demand for 12,000 sq.ft. homes like this one. What brought this to mind was an article today in Bloomberg on the change of tastes in the Hamptons weekend market: the insane prices are back, but the new buyers want modest little cottages of 8,000 sq.ft., father than behemoths so popular back in the '90s and the first decade of the 21st century.
Weekend homes aren't permanent residences, of course, so buyers' criteria may be different, but again: I don't see many sales in the ultra-large house inventory.
Rich Hamptons buyers don't want mega-mansions
Now that wealthy second home buyers are returning to the southern tip of Long Island, they have noticeably different criteria than their predecessors of 10 or even five years ago. Prices might be the same or even higher than before, brokers said, but the needs of an often younger, less-showy buying set have changed.
Bigger Isn’t Better
One of the pronounced differences in taste has to do with scale. Drive through the Hamptons today and you’ll see mega-mansions built over the last 20 years or so, many with dozens of roof lines and such a variety of windows that it appears owners were given a catalogue and asked for “one of each.” Echoing a trend already evident in places like Greenwich, CT, these monoliths have fallen from favor.
“Those great big huge houses from the 1990s and early 2000s, they’re sitting,” said Paul Brennan, a Bridgehampton-based broker at Douglas Elliman Real Estate. “I think that conspicuous consumption isn’t in vogue these days, and that’s why bigger isn’t better.”
He continues, “The taste is: ‘I want it now, and I don’t want it huge,’ and those substantial houses haven’t come down in price enough to either knock them down or renovate them to a certain standard.”
Taste aside, it’s also about recognizing that mega-mansions aren’t always the most fun to live in.
Brennan points to the home theater as emblematic of the trend.
“Before, everyone’s theater had to be bigger than the next,” he said. “Now they’re doing flex-rooms, where the screen can come down, but when it’s up, it can be a rec room for the kids.”
Tennis courts, once considered a beacon of the blue-blooded life, have also fallen from favor.
“It’s not an imperative for most people,” Moore said. And even when it is, buyers soon find that it’s more for show than regular use. “Some people still seem to like the fact that they could at least put a tennis court on the property,” Brennan said. “But they don’t use it.”
Getting a Deal
Multiple Hamptons brokers asserted that “buyers want value.”
What “value” means in a zip code that ranks amongst the most expensive in the country is a matter of some debate, but generally, it seems that brokers quantify it via three qualities: location, construction quality, and potential for flipping and turning a profit.
Location, unsurprisingly given that this is a beach destination, is about proximity to the ocean.
“That’s what people come out here for,” said Moore. “You want to be as close as you can afford.” This week, Moore listed a 5,000-square-foot house on the beach for $55 million.
Construction quality, she said, varies widely in the area. You can build something for a thousand dollars a square foot or more, she said, but you can also build it for a lot less. “The poorly slapped-together spec houses with more quantity than quality are just getting very little play.”
When it comes to the final test of value, it’s not as much about the price of the house as the perception that the buyer is getting a deal. “There are still people who are willing to do the work,” said Brenneman. “They’ll buy something, come in, and fix it up.”
Many people, though, want to “walk in with their toothbrush,” countered Brennan. “That’s one end of the spectrum, but those houses aren’t flying off the shelf.”
The houses that are? Ones that—newly renovated or not—have been heavily discounted.
“Primarily, people are buying houses that have come down in price from their initial ask by probably 25 to 50 percent,” he said. “That’s what’s selling.”
Don't be fooled by a ridiculous opening price, however: if a home was never worth anything close to what was asked, a reduction by a quarter to a half may still not represent a bargain. But where you have a fairly recent sale price, as is the case at 11 Skybridge, that price might be an appropriate figure on which to calculate your discount.
