Maybe, maybe not. As a single data point, a week ago, 26 and 32 Windmill Lane, East Hampton, an oceanfront 6.7-acre estate, had its price cut $10 million, down to $45 million. The property had been listed at $60 million over the summer. It’s repped by Paul Brennan at Elliman and Frank Newbold at Sotheby’s.
Clearly the glorious days of 2014, when Barry Rosenstein purchased 18 acres on Further Lane for $137 million, are over. Of course, that property is a whopping 18 acres. Still, even dividing those figures and multiplying by 6.7 leaves an asking price of $50 million for Windmill Lane for a 2014 price.
We’d consider the house — which is pleasant but dated, but not large enough for a modern trophy home at a mere 5500 square feet — a teardown. Buyers today are worried about future zoning restrictions on size so want to build as large as they can now. Current laws would permit for a 12,500-square-foot new home on the 5.4-acre oceanfront parcel and a 6000-square-foot house on the 1.3-acre parcel behind it.
Speaking of 2014 prices, in that autumn, an East Hampton property was put on the market for $13.9 million, which struck us as ambitious at the time. Now, five years later, it just sold for $6.825 million, which is almost exactly half the original asking price.
Eighteen Ocean Avenue is called the Louis Faugeres Bishop House after the doctor who once owned it. It was designed in 1928 by architect L. Bancel LaFarge in the French country style of handmade brick. Today it retains much of its original charm with terraces, French doors, climbing plants, and fireplaces. There are five bedrooms and four-and-a-half baths, plus a two-bedroom staff wing. The 1.5 acres of land sport a heated pool and lovely old trees. The property had a few issues — not a huge plot of land, old-fashioned interiors, location quite close to the center of town — but mostly the problem came down to price.
Yes, of course, the price was cut over the years: in March 2015 down to $11.5 million, and then in May 2015 another $1.6 million was sliced off. By late 2016, the asking price was $8.75 million, and by 2018, it was $8.25 million. In our opinion (for whatever that’s worth), if the property had been listed at $10 million in 2014, it would have sold then.
Now let’s look at some market numbers. We’ve charted the listing discounts for the past couple of years by quarter. (The listing discount is the spread between the asking and the sales price.) Last quarter’s number was high, but nothing out of the ordinary, so we’re wondering if sellers are still not getting it.
In a weak market like this one, prices are supposed to be more negotiable. Keep in mind, though, that an overpriced property has to drop even more than the listing discount to attract a sale. If a property is listed too high today (which would be the market value, plus the discount of 12 percent or so, plus a little more), it won’t take too long to sell. It simply won’t sell at all.