Major Collapse in High End Properties Underway

posted by Nima

March 12, 2009 · Posted in General Economics

Bloomberg writes Greenwich Home Sales Fell Most on Record Last Month:

Greenwich, Connecticut, home sales dropped 77 percent in February, the most on record, as Wall Street firms cut jobs and buyers retreated from multimillion- dollar purchases, Prudential Connecticut Realty said.

Seventeen homes sold last month, down from 75 a year earlier, the biggest annual decline for any month since 1976, when broker John Cooke of Prudential Connecticut began collecting the data. Sales of houses priced $2 million to $3 million fell 80 percent, with two properties selling last month, the broker said. The median sales price declined 2 percent to $1.76 million.

“Greenwich, despite its imputed affluence, is still a part of the world, and like every place else, it suffers from buyers and sellers not agreeing on the value of illiquid assets — one of those being real estate,” said Roger Pearson, a Greenwich real estate lawyer and former mayor of the town.

Banks, insurance companies and securities firms have cut more than 180,000 jobs in the Americas in the past year in the recession, data compiled by Bloomberg show. Greenwich, a town of about 61,000 about an hour’s drive northeast of Manhattan, is a bedroom community for Wall Street and known as the U.S. hedge fund capital since more than 100 such companies are based there.

In Greenwich, there’s a long-held conviction that prices never fall.

People who still think that there will be some high-end properties in some areas that won’t be affected from the housing crash should erase that thought from their minds quickly. In fact, it is rather likely that high end properties will see a slump that is much more severe than that of less expenisve ones.