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Price Cuts for Mansions in Gatsby Country

In Jay Gatsby's time, the mansions along Long Island's Gold Coast were famous for their excess and price tags. Now, they're more famous for their price cuts.

Hit hard by the recession, the grand estates and megahomes lining the North Shore have seen price cuts of up to 50 percent. Inventory remains high and homes are sitting on the market for an average of six months or more, brokers say.

Big price cuts are finally drawing buyers. In the first quarter, sales volume in Suffolk County was up more than 5 percent over 2012.

Brokers say the recent burst of activity is being driven by the broader housing recovery as well as strong interest from foreign buyers, especially from China and Russia.

"Luxury is on sale," said Maria Babaev, managing director for Luxury Portfolio and owner of luxurylongisland.com. "The Russians …"

Babaev's premiere listing is the Fort Hill House. The home, on 10 acres with a 25,000- square-foot Tudor mansion and deep-water dock, was originally listed for $22 million. Now, it's listed for $11.7 million. "Suddenly we have a lot of interest," Babaev said.

A new home, in Lloyd Harbor, has a 15,000-square-foot main house on 10 acres and was listed for $22 million. The price was cut to $19.9 million and now the house is in contract for a slightly lower price.

(Read More: What's My Mansion Worth?)

"I think prices have gotten to the point where buyers are comfortable doing deals," said Bonnie Williamson of Daniel Gale real estate.

Of course, the mansion that inspired the original Gatsby home has long been torn down. The mansion that inspired Daisy Buchanan was torn down more recently. Some local real estate experts say that more than half of the 500 great turn-of-the-century estates on the Gold Coast have been demolished because of the high costs of restoration.

For the homes that are left, prices have become far more attractive for aspiring Gatsbys.

(Read More: Mega Homes From the Top Three Zip Codes)

—BY CNBC's Robert Frank. Follow him on Twitter: @robtfrank