Billionaire Capital Turns Into Ghost Town: "Home Contracts Down 80%", Trophy-Cars Pile Up In Showrooms

Tyler Durden's picture

It used to be that a quick walk around downtown Greenwich could pass for an exotic car show but those days seem to be coming to an end as hedge fund returns have suffered and, as one jewelry store owner points out, "one doesn’t want to become the next episode of ‘Billions.’” 

Greenwich

 

As recently pointed out by Bloomberg, Greenwich has long been one of the most prosperous communities in America with one out of every $10 in hedge funds in the country being managed there by the most elite funds like Viking Global, AQR and Steven Cohen's Point72.

But these days, as hedge fund returns have suffered and banking bonuses have remained stagnant for years, the trophy items like expensive jewelry and exotic cars are just piling up in luxurious Greenwich showrooms. 

The lonely $250,000 S-Class coupe at Mercedes-Benz of Greenwich says it all. For six months, it’s been sitting in the showroom, shimmering in vain.

 

“We haven’t had anyone come in and look at it,” says Joey Licari, a sales consultant at the dealership, looking over his shoulder at the silver beauty. “I feel like normally they would, maybe a few years ago.”

 

Ten-carat diamonds that can cost in the six figures collect dust in stores on the main drag.

But exotic cars and jewelry aren't the only items not moving as real estate brokers say that Greenwich mega mansions are sitting on the market for years amid collapsing prices.  As head of Starwood Capital Group, Barry Sternlicht, said the rich are being maddeningly frugal "you can’t give away a house in Greenwich."  In fact, according to Houlihan Lawrence contracts for homes between $5 million and $5.99 million are down 80%.

Many continue to try to sell their real estate holdings. As of Sept. 14, there were 46 homes at $10 million or more on the market, some that have been lingering since 2014, according to data from Miller Samuel and Douglas Elliman.

 

Back in the day, “everybody in the world wanted five acres and pillars on their driveways, because that’s what you got when you ‘made it,”’ says Frank Farricker, a principal with Lockwood & Mead Real Estate who’s chairman of the Connecticut Lottery board. “Now, ‘made it’ means on the waterfront -- on a small lot with a brand-spanking new house.”

On example of the tanking Greenwich real estate market is the following 19,773-square-foot mansion once owned by Republican presidential candidate Donald Trump that has been looking for a buyer for nearly two years.  It’s now on the market for $45 million or about 17% less than its original listing price of $54 million.  Shockingly the house has garnered limited interest despite a 3,000-bottle chilled wine cellar, a tennis court that converts to a hockey rink and a globe-shaped observatory with a retractable roof and high-powered telescope.

Greenwich

 

For those interested in something a bit more "affordable", former Citigroup CEO Sandy Weill is also trying to offload his 16,460-square-foot home at $9.9 million, a "bargain" at a nearly 30% discount to the original listing price of $14 million two years ago.

Greenwich

 

Of course, new Connecticut tax hikes are part of the problem as several hedge funds have shut down shop in Greenwich and moved to Florida where they can take advantage of better weather and cheaper real estate...oh, and a 0% state income rate doesn't hurt either. 

In 2015, Connecticut boosted the income tax for individuals making more than $500,000 and couples above $1 million to 6.99 percent from 6.7 percent. Levies on luxury goods rose to 7.75 percent from 7 percent on cars over $50,000, jewelry over $5,000 and clothing or footwear over $1,000.

 

Sternlicht said at a conference two weeks ago that this was why he relocated to the sunshine state. “We used to have no taxes,” he said wistfully, recalling Connecticut before it enacted its income tax in 1991.

Ah, the Sunshine State, Gorgeous!

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Vampyroteuthis infernalis's picture

I cry elephant tears for those poor, wealthy Wall St. banksters. Boo hoo. May they rot in hell.

JRobby's picture

Nuke it from orbit. It's the only way to be sure. Then rain asteroid fragments on it.

It's a grotesque place.

bamawatson's picture

they have a mean time there

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) bamawatson Sep 27, 2016 6:28 PM

The leftist nut-job county where my principal residence is just raised property taxes 9%.  The average property tax bill was around $4000.  Now it's up to $4400.  Got to buy more votes and pay for government retirements by cutting (taking from) my retirement.  Liberal a$$holes.  At some point enough people will say "screw it" and leave, allowing real estate prices to drop.

FromWhere ImStanding's picture

And to all those who refuse to pay for all our good roads, airports,  schools, business opportunities and military services, ecetera, I say Good Bye and Good Riddens...you Welfare Scoundrels!!!

Save_America1st's picture

It's all fun and games until you run out of everyone elses money and then have to start using your own, bitchez... ;-)

willwork4food's picture

Let's cut through the chase: Does the home with the rooftop telecope have a Celestron NexStar 8SE with a 40k object database and  25mm eyepiece and NexRemote software for a minimum? If not I'll pass.

oops's picture

The CURSE is RELENTLESS. http://wp.me/p4OZ4v-3z

Multi's picture

What!? you tax the rich and the rich leave!?

Who woulda thunk? cue Hellary voters.

Mr. Schmilkies's picture

Can't see much from Greenwich anyway due to light pollution.

hardmedicine's picture

I see you've done your homework sir.  can I interest you in something a bit more upscale?

 

kbohip's picture

It does!  A former owner of that house (might have been Trump?) had it covered in 14k gold too.  Careful using the telescope though, there have been reports of people using it getting some weird "orange" substance around their eye.

JRobby's picture

Just to spy on the orgy drug party at the "neighbors" who have a bigger mansion. 

Paul Kersey's picture

Not only don't I know anyone with a $5 million house, but I have no interest in doing so. If I were to win $20 million in the lottery, I'd still be driving my 1997 F-150. As the Japanese say, "The nail that stands out, gets hammered".

I do believe that the day is coming in America, when an extreme show of wealth will be like placing a target on one's own back.

JRobby's picture

There are no $5,000,000 homes there.

Go higher 

willwork4food's picture

You would still drive your 1997 F150 after you won $20M? I call Bullshit.

Paul Kersey's picture

Other than food, I've already bought all the stuff I need.  I haven't felt the need to impress anyone with expensive props since I got out of sales in 2000.  People, who are getting more desperate every day, will not feel any strong desire to key any vehicle I own, and they sure as hell won't want to steal my sheakers.  I sincerely don't want to be the nail that stands out, no matter how much money I may or may not have.  My fight or flight instinct has been kicking in lately, because the smell of something economically apocalyptic has been permeating the air.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Paul Kersey Sep 27, 2016 9:41 PM

You are not alone. Been grey for a while. Smart thing to do.

I MISS KUDLOW's picture

i got a 1997 f 150 that will go no where as well, ever, thing runs man, no bills

Dolar in a vortex's picture

I have a 2002 Boxster S that will survive the EMP.

It won't carry much in the frunk (front trunk) or trunk (rear), but I'm still driving a Porsche cabriolet (convertible in English).

(Who cares, we're all gonna' die sometime.)

harleyjohn45's picture

No it won't, It has electronic ignition and fuel injection.  My avatar will survive an EMP.

harleyjohn45's picture

Stack PM's, Cash and good tools.  None of us will make it out alive.

effendi's picture

I'm going to live forever or die trying.

harleyjohn45's picture

Lots of people don't go apeshit when they come into a little money.

scsherman's picture
scsherman (not verified) harleyjohn45 Sep 28, 2016 11:40 AM

But most do. That is why every pay day poor people act like idiots.

Lore's picture

Re: "I do believe that the day is coming in America, when an extreme show of wealth will be like placing a target on one's own back."

Paul is perceptive.  Many people are innately suspicious of wealth.  Some change their behavior dramatically if anything gives them reason to perceive that your condition may differ substantially from their own.  The psychology is interesting and somewhat predictable, if frequently disappointing. 

FERFAL (survivor of Argentina economic collapse) has written at length about the need to BLEND IN. Anyone who has anything to lose should think along such lines.   That involves everything from the clothes you wear to the way you move, walk and talk, particularly when SHTF.  Most people cling to popular delusions even when presented with in-your-face evidence to the contrary: it must be so, else the biggest swindles would never get off the ground.  Ergo, there are times when it pays to play dumb:  listen to the myths spun and reinforced by local media and conversation at the local watering holes and cultivate a persona to fit in.  The beliefs held by most people are usually simplistic and predictable (depressingly so) and fairly easy to emulate or at least not to be seen questioning.  "Loose lips sink ships" applies as much to personal security as to matters of national security.

PTR's picture

I wonder if they will "go Brazil" and have their cars bullet-proofed.  Hopefully it doesn't come to that, but you never know...

Troy Ounce's picture

"The nail that stands out, gets hammered".

That's why the Japanese are where they are: docile to the extreme, and eat all the informatiin the authorities feed them, like Fukushima and government printing till eternity.

Hey, name me 10 great Japanese individual thinkers? Make that 5. 4? 3? 2? 1? Reason:

 "The nail that stands out, gets hammered". 

DaveA's picture

Shigeru Miyamoto, who created the *two* most popular video game franchises of all time, Super Mario and Legend of Zelda.

WarPony's picture

Zelda was way cool and after many hours of play it would trigger mini seizures, ... oh wait

scsherman's picture
scsherman (not verified) DaveA Sep 28, 2016 11:42 AM

Zelda was based on Twin Peaks, so you know it was good

harleyjohn45's picture

How did you get a down vote?

_SILENCER's picture

Agreed.

Are you the same Paul Kersey with the awesome SBPDL blog?

Paul Kersey's picture

Nope.  ZH is the only blog on which I post comments.

Jeffersonian Liberal's picture

The difficulty will be in ferreting out these parasites after the collapse.

They'll blend right in and claim they were just pencil pushers for some mid-level company.

That's what they do.

We may have to wait until after the collapse, in the rebuild stage, when these fuckers start pushing the idea of central banking and fiat currencies and primary lenders and discount windows and special interest rates for the primary lenders.

Then we'll know who to detain.

Jeffersonian Liberal's picture

Is that hILLary in the passenger seat in that top photo?

Looks like her "stoned ex-hippy in blue sunglasses" picture.

Vatican_cameo's picture

 

These NYC Parasites migrated to Connecticut because their "Liberal Ideology" destroyed NY.  Now that they've caused the same havoc in Connecticut (completely destroying the State), it's time to move on again.  I hope these Liberal Suckheads lose their shirts as the State of CT slowly sinks into the Abyss.

Delving Eye's picture

I'm a lifelong (63 years) Nutmegger and grew up in Greenwich -- no, not in one of the spreads on Round Hill or Conyer's Farm -- but a nice house in Riverside where every kid rode a bike or walked to school, and packs of dogs (not nannies) waited for us afterwards. It's a different town today, sadly.

Many of those back-Greenwich mansions are not selling, especially the ones that are asking over $10M and are 8,000+ square feet (talk about heating bills). The owners keep lowering the price (like, to $5.9M), but still no bites. Quelle horreur! Talk about a bubble.

Connecticut residents, including all the regulars in Fairfield County (that includes Greenwich), pay a lot in property tax, which is high. Nevertheless, I love the state and the little town where I now live (north of Greenwich), which still bears traces of life back in the '50s. Hope it never loses it.

Vote for Trump!

BarkingCat's picture

My uncle used to live in CT.

It is a naturally beautiful state but a government created shit hole.

I remember in the 1980s he built a house for about $110K. This was during the buble and the value went very quickly to about $170K.

Then it crashed to under $100K.

Another thing I remember is his property taxes going sky high. They hit around $4K per year. He was extremely pissed off. Talked about burning it down....and this was a man who immigrated from Eastern Europe, worked his ass off in a job way below his qualifications and paid cash for that house.

After few years he retired and got the hell out of CT.

Delving Eye's picture

My husband and I lost big in the crash of '87 -- but so did everyone. Housing bubbles are not confined to Connecticut. Florida is a disaster waiting to happen, again.

btw, my annual house tax (cars are additional) is $8,800 -- which is considered low for Fairfield County. I read it and weep.

harleyjohn45's picture

So you probably have an appraised value of 450K.  I keep telling people Florida taxes are high.

venturen's picture

$4k is a rounding error in NJ...$30k+ is upper middleclass and $100k+ on mansions like this. Greenwich happened because NYC income tax are 12% and you have NO YARD in NYC! 

 

NYC is drowning in printed money...but the smart money is leaving as Keynesian economics(and most "hedgefunds") don't work...and they know it is going to implode like a black hole within the next 5ish year give or take 5 years(less one month) 

JRobby's picture

NJ & NY leading the way for earner population loss. CT & MA not far behind.

 

scsherman's picture
scsherman (not verified) BarkingCat Sep 28, 2016 11:45 AM

Oh boo hoo, the tired old immigrant story. Eastern Europe huh? Proably a Joo or a Muzzie.

buttmint's picture

$2,200 per annum in Santa Fe, NM---used to be much lower. Now the tax boys want to employ all their distant relatives.

Jeffersonian Liberal's picture

The liberals in every city do the same thing, everywhere.

They destroy the city. They ridicule the suburbs.

But when it's time to have a family, they move out to the suburbs, push the same liberal shit that fails everywhere, and ruin the suburbs.

This happens at the state level too, thus the term "Californicate."

401K of Dooom's picture

....and we who refuse to pay for welfare abuse, junkets, ostentatious perks, appropriations for those who are connected and "Hate Whitey" conferences, we say thank you and get lost and stuffed!!!