Good and bad news for Greenwich?

As prices drop in Massachusetts, more desirable towns hold value.

Such is the fate of communities that grew in demand and stature when traditional tony suburbs became increasingly unaffordable and the high waters of the housing market washed westward. With the economy rapidly retrenching, the real estate markets in these communities founder, while the Wellesleys and Westons of Massachusetts resemble islands of safety.

“For a long time, inventory was so low, builders would build houses in other towns, and these would sell, always priced a little less than the blue-chip towns,” said Concord real estate agent Brigitte Senkler, who has worked in the area for more than 20 years. “But nowadays, people would rather invest in a stable town, even if the price is more. They’re concerned if they buy elsewhere, prices will deteriorate.”

Just compare Weston and Wayland. In ultrarich Weston, the median sales price of a single-family home sold last year climbed 7.5 percent, to $1.3 million. In neighboring Wayland, home prices dropped a whopping 20 percent, to a median of $505,000.

Jeff Morgenstern, a Coldwell Banker manager in Wayland, said a soft real estate climate is making Weston, Wellesley, and Newton more accessible. Ironically, the result is a concentration of demand that has pushed some home prices up in those communities.

“The market in Wellesley and Newton becoming so overpriced is what created the million-dollar market in Wayland,” he said. “Now it’s easier to buy in those places, so people give less consideration to the high-end in Wayland.”

Other agents noted that in a market like this, the neighboring communities suffer in comparison to the blue-chip towns: The school systems suddenly don’t look as strong, the underdeveloped town centers less inviting.

That’s encouraging for Greenwich but this development may give spec builders heartburn:

What is selling in Wayland, however, are mid- and lower-price homes. That could suggest a kind of ripple effect underway: As more upper-income home shoppers find the Westons more affordable, middle-income buyers find the Waylands of Massachusetts are finally accessible to them. Wayland, after all, is still a beautiful quintessential New England town and its schools enjoy a strong reputation.

But what suffers in this demographic market shift are the high-end homes, particularly new construction.

I continue to believe that we have so many high-end spec houses that, when they fall to banks and are sold for peanuts, they’ll drag down everything else. But sellers who are looking for a ray of hope to cling to may find some comfort in this article. Be my guest.

6 Comments

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6 responses to “Good and bad news for Greenwich?

  1. anonymous

    IIRC, Weston had limited spec building during Bubble; has good public schools; and is closer drive to Bos’ financial dt than nominally cheaper exurbs

    Spec overbuilding in context of academically unremarkable, economically “diverse” public schools is a toxic mix

    But Greenwich has major advantage of income tax and property tax arbitrage vs Scarsdale or Chappaqua…or Manhattan….its relevant comparables

  2. New Buyer

    I am from Boston and know both towns well. For decades, Wellesley has been one of the wealthiest and most desirable towns in Greater Boston. Most neighborhoods in the town are uniformly pretty and many streets are lined with gorgeous mansions. Wayland– 20 minutes further out from the city– is a great town with simply a larger proportion of modest homes (ie a classic Colonial or Cape) and a smaller proportion of 3+ million homes. Wealthy & upper middle class buyers started to buy in Wayland bc they couldn’t stomach paying the additional Wellesley “premium” in an already over-priced Boston market. Now, it seems, a nice Wellesley home at a rational price is back in reach.

    Wellesley homes — like Greenwich — will always be at the top of the market. The issue is where is the market? Wellesley’s home prices may not have fallen as fast or as steep as Wayland’s, but they are still down from their peaks. And falling . . .

    I am new to CT but I wonder if there is a comparison with Stamford and Greenwich. Stamford has some fabulous homes but is a less desirable town. If prices keep falling and you can now buy a house in Greenwich, why wouldn’t you?

    In this market, even Wellesley & Greenwich’s cachet has limits. The real estate market may be stronger than in neighboring, less “desirable” towns, but it’s still not rosy. A new and humbling phenomenon that some sellers can’t cope with.

  3. Anonymous

    I think the makeup of Weston/Wayland/Sudbury etc is different. Greenwich’s huge runup in home prices was fueled by artificial hedge funder “pissing contests”, using overleveraged earnings from moving money around. Spend an afternoon in any of those MA towns. They are full of boring old money types, and while their home prices increased with the national rising tide, they didn’t appreciate like Greenwich. You can make the same case for a lot of other towns countrywide.

  4. InfoDiva

    The concept “flight to quality” applies as much here as it does in the financial markets.

    Unfortunately, my Greenwich house as well as my GE stock are suffering. But I don’t want to be a renter any more than I want to stuff money in my mattress.

    No real choice but to try to ride it out, I’m afraid.

  5. anonymous

    Suspect any HF “pissing contests” affected >$10MM housing…not the IB worker bee housing which is most of Greenwich

    Contrary to New England old-money myths, would guess much of >>$5MM Weston housing is dominated by new-money HF and PE guys

    Weston/Wellesley’s many modest, elderly houses are likely owned by a lot of worker bees at the various mutual funds….another industry of IQ-challenged scamsters….and overpaid quacks and academic admins at the various Bos hospitals and universities….another industry rife w/corruption and excess, wrapped in non-profit/altruistic guise

  6. Stranger

    I suspect Wayland and Westford are affected by Fidelity. They’re both logical towns for Fidelity workers in Marlborough, given the local traffic patterns. Harvard and Boxborough are likely Fidelity towns, too.

    Wayland is a great town. If Weston’s prices are holding up better, it’s only because the sellers there are better situated to wait it out.

    Comparing Carlisle and Westford is weird. Yes, they’re next to each other, but Westford is much larger than Carlisle. Westford has increased its housing stock immensely in the last decade, due to many developments. It’s hard to sell a colonial, 4-bedroom, in Westford for more than the builders will accept for a new 4-bedroom.

    Carlisle is part of the Concord-Carlisle Regional School District, which Boston Magazine dubbed “most cost-effective.” Wayland has wonderful schools, but its high school building project failed to get enough support from voters. The town is also closing and realigning some schools, to deal with a decline in elementary enrollment.