Home prices in London’s swankiest neighborhoods are dropping faster than in the rest of Britain, according to the Wall Street Journal. The reason? You guessed it: the financial crisis. The sorts of buyers who buoy these neighborhoods are losing their jobs or are facing other economic uncertainties.
While average U.K. home prices began to slide in October 2007, prime London property was still holding up at the end of the first quarter. Since then, it has been playing catch-up, and with a vengeance. According to an index compiled for Jones Lang LaSalle, a property-services and investment-management company, the price of residential space per square meter in the capital’s most upmarket locations fell 12% during the third quarter, more than twice the rate of decline in London’s less glitzy neighborhoods. During the first nine months of the year, prime London prices were down 19%, while in the rest of London prices were down 9.4%.
Will the same fate unfold in Manhattan’s posher neighborhoods, like the Upper East Side or the downtown locales like Tribeca and Battery Park City? Perhaps. Time will have to tell, of course, but brokers already report ominous signs of slower sales.
From JoAnn Schwimmer, a broker at DJK Residential, by email on Monday:
Yesterday, there were approximately 105 open houses on the Upper East Side, price ranging from $400,000 to $600,000 (the previous weeks it has been closer to 150-175)