Time to Cut a Deal on a Mega-Mansion in New York’s Struggling Suburbia

There’s a palatial brick manor in Oyster Bay, New York, where residents can admire hand-painted murals, host visitors in separate guest quarters and park up to nine cars in the garage.

The seven-bedroom property also happens to be selling for 40% off its original $15 million asking price set three years ago—one of the scores of mega-mansions in the New York City suburbs languishing in an ultra-luxury market that has favored penthouses in the city over estates in suburbia since the recession struck in 2008.

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But the struggling market offers an opportunity for buyers wanting a more bucolic lifestyle: Now may be a good time to try and cut a deal with sellers at wits’ end anywhere from Bergen County, New Jersey, to Greenwich, Connecticut.

New York City saw its ultra-luxury market recover and boom post-recession, resulting in a flurry of pricey condo construction. But the boon in the Big Apple failed to spill over to its wealthiest bedroom communities, said Jonathan Miller, chief executive of appraisal firm Miller Samuel.   

"There’s a false assumption that those markets did what the super luxury condo market did… that prices are higher now and values are higher now prior to the (financial crisis)," Mr. Miller said.

Since the recession, well-heeled New Yorkers have largely left suburban mega-mansions out of the action. From 2006 to 2008, 148 mansions priced at $8 million or more sold in Fairfield County, Connecticut’s so-called "Gold Coast." Over the past three years, only 39 homes have sold in that price bracket, according to data Zillow prepared for Mansion Global.

Activity is also muted in Nassau County, an area directly east of the city on Long Island with a long history of attracting the city’s business tycoons to buy and build lavish estates. From 2006 to 2008, the county recorded 33 homes sold for $8 million or more. But only 21 homes have traded hands for that amount since 2014.

The drop off in activity has meant that overpriced mega-mansions have sat on the market for months or years.

Mansion Global used listing records and data from PropertyShark to find the amount of time owners in Nassau County have been trying to unload their high-end properties. Of the 23 homes now on the market for $8 million or more, the average property hit the market 541 days, or a year and a half, ago.

A traditional-style mansion in Locust Valley, New York, famous for featuring in the Tom Hanks film "The Money Pit" has been on the market since 2014. Despite its Hollywood history, formal gardens and an enviable four-room master suite, the owners have had to slash the price in half from $12.5 million, listing records show.    

"The stuff that’s priced right sells right away," said Jason Friedman of The Friedman Team at Coldwell Banker. "But $8 million is hard to sell when it’s worth $4 million."

Part of the problem is also a shift in the buyer profile over the past 10 years. Mr. Friedman said he sees mostly foreign buyers for luxury homes in Nassau County, and scant interest in the massive historic estates that dot Long Island.

"There just aren’t enough people who want a 200-year-old house," Mr. Friedman said.

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Sellers are even turning to estate auctions, such as one Wednesday night in Sands Point featuring six luxury homes in Nassau County. The three most expensive properties of the evening, previously listed for $24 million, $8.9 million and $6.9 million, respectively, failed to attract even their suggested opening bids, Mansion Global learned.

After years of sluggish activity and little movement on price, however, some sellers are finally willing to negotiate on price, said Igor Beyder, a luxury broker from Bergen County, New Jersey, with Keller Williams.

"A lot of these sellers are being more realistic on price," said Mr. Beyder, whose priciest listings include an $11 million mansion in Cresskill, New Jersey, and a $12.9 million estate in Saddle River. Brokers are also working to get asking prices in the realm of the reasonable. Mr. Beyder said he’s refused a number of clients with over-the-top price expectations.

One owner Mr. Beyder is working with has turned to luxury platform Concierge Auctions to try and sell off an 18,000-square-foot smart home with its own basketball court and in-home theater. The home, once priced at $8.889 million, will now head to auction without reserve.

"They’re willing to negotiate," he said. "Especially if the houses have been listed for a little bit."

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Here is a look at other news from around the world compiled by Mansion Global:

Winston Churchill’s Former London War Office Slated For Luxury Hotel, Condo

The Old War Office building in London, once Winston Churchill’s base of operations, is on its way to becoming a luxury hotel and residences, as a result of a new deal between Raffles Hotel & Resorts, AccorHotels Group, Hinduja Group, and Spanish construction company Obrascon Huarte Lain Desarrollos. The building currently has 1,100 rooms, seven floors, and two miles of corridors, and plans for the new development include 125 rooms and 88 private residences as well as restaurants, amenities and other commercial entities.(City A.M.)

San Francisco’s Most Expensive Listing Sells For Rumored $40 Million

A seven-bedroom, eight-and-a-half-bathroom spec house in San Francisco has sold after hitting the market in April for $40 million, making it the city’s most expensive listing at the time. The final sale price has yet to be confirmed. The limestone home features high-end extras including two wine rooms, and outdoor kitchen, an elevator, a gym, a home theater, and a top-floor terrace. The home replaced a 19th century clapboard house that was demolished after being purchased by Marble Management developer Bill Campbell for $7.8 million in 2009. (Curbed San Francisco)

More:Competition High, Inventory Low Across U.S.

Qatari Investors Scrambling To Sell Dubai Homes Ahead of Next Week’s Deadline

The diplomatic crisis surrounding Qatar has extended to real estate in the region. After Abu Dhabi decided to follow Saudi Arabia and cut ties with Doha, Qatari citizens are being given two weeks to leave the UAE. As such, Qatari citizens are rushing to unload their properties and liquidate assets in Dubai, with many offering steep discounts on their homes and selling well below market rate. One broker noted that Qatari investors with smaller residential units have been successfully selling, but at anywhere between 5% and 10% below market price. All told, Qatari investment account for AED 2.8 billion (around US$762 million) and 799 transactions in Dubai’s property market as of 2015, according to data from the Dubai Land Department. (The National)

Government Controls Didn’t Stop Toronto Single-Family Home Prices in May

Prices increased in every major Canadian city in May, according to data from the Teranet-National Bank Composite House Price Index, which tracks resales of single-family homes. In Toronto—where Ontario’s government announced new cooling measures in April—home prices were up 28.7% year-over-year, setting a record, and marking the 14th straight month of year-over-year price increases. Vancouver prices appear to be back on the rise after a slow down, rising 1.5% from the previous month, and 8.2% year-over-year. (BNN)

More:Greater Vancouver’s Home Prices Rose 5.2% in May

South Korea Prepares Measures To Cool "Overheating" Property Markets

Amid rapidly rising property prices and concerns over speculation, South Korea’s finance minister Kim Dong-yeon announced that the government will be stepping in, saying, "A pre-emptive, surgical approach will be made to address regions showing signs of overheating." While specific policies haven’t been announced regarding the housing market, experts speculate that the government may tighten regulations on how much buyers are allowed to borrow. Currently, buyers are able to borrow 70% of a property’s value (and spend up to 60% of their annual income on payments), but those regulations are set to expire next month, leaving room for stricter revisions. (Times of India)

Bowing To Protests, Shanghai Lifts Recent Market Cooling Measure

After 100 demonstrators protested in Shanghai last weekend, the city’s government has made a partial concession on a recent housing policy to quell anger among buyers who feel their recent purchases have been unfairly stymied. The homeowners protesting had bought "dual-use" homes on land that was originally sold for commercial rather than residential development, and pushed back against a recent government attempt to restrict the land to commercial use. While the government blamed developers for "distorting the policy," it did loosen the rules by allowing owners to move into their "dual-use" homes, but has yet to lift restrictions on selling, another issue that has owners up in arms.(Financial Times)

More:China’s Youngest Female Billionaire Selling Sydney Pad for A$18 Million

A $10.2 Million Condo Sale Has Set Miami’s 2017 Record

A three-bedroom, three-bathroom penthouse at the W. Hotel and Residences in Miami has sold for $10.2 million, with a price per square foot of $3,502, setting a 2017 record for Miami-Dade County. The sprawling residence includes 2,912 square feet of interior space, 2,912 of space on a rooftop entertainment deck (which includes a pool and hot tub), and an additional 690 square feet of terrace. The listing first appeared asking $15 million in November 2016, and dropped its price to $13 million this past February. In Miami’s slowing condo market, recent price chops are reportedly boosting sales activity. (Miami Herald)