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Florida, especially SW Florida is doing pretty bad, but the ultimate F*d housing market award still goes to Riverside. Median price was $435,000 in April 2006, today it is $279,500. For all you midwesterners that think it's all doom and gloom with no basis in reality, below are some of the metro areas most affected by the current housing downturn, with their near peak prices set in 4/2006 and their current prices:When the last boom slowed, a few years later the asian economies felt the pain. I think you'll see the pain spread east as the need for $29 DVD players evaporates. I always remember the Japanese conglomerate buying Pebble Beach for billions in the late 80's and selling it for millions in the mid-90's during their banking crisis. And as the asian economies slowed back then, oil fell into the low teens per barrel. It can happen again if the world economy slows thanks to the US slowdown. Heck, the president of Russia even got pissed off at the US for causing the global credit mess the other day. Reminds me of Hardy telling Laurel "another fine mess you've gotten me into"
And it isn't just the east that feels the pain. 40% of the homes sold in the Orlando area from 2004 to 2007 were bought by EuroZone residents who took advantage of a strong currency/weak dollar and the romantic thought of owning a place in Florida that was much larger than the flat near London or Frankfurt they now call home and with much better weather more months of the year. Almost all of these homes are well under water in value and with mortgage companies red-lining Florida, they won't be sold anytime soon. Quite a bit of foreign investment capital will share in the Florida real estate bust.
Washington, DC: $479,930 - $349,900
San Francisco: $654,663 - $520,000
Los Angeles: $579,666 - $440,000
San Diego: $537,666 - $410,000
Riverside: $435,000 - $279,000
Sacramento: $439,500 - $305,000
Boston: $389,900 - $349,000
New York: $469,000 - $434,900
Las Vegas: $344,900 - $239,990
Tampa: $279,900 - $204,900
Phoenix: $333,800 - $250,000
Orange County: $694,833 - $519,900
Source: http://www.housingtracker.net/
Both the housing bubble and now bust are pretty much a coastal/sun belt phenomenon, so I can see how someone living in Texas might think that the mass media stories are much ado about nothing. In reality, the media stories just scratch the surface. It is true that the media tends to focus on the sensational stories, but based on the underlying information that I have seen, the situation is likely to worsen much more than even the "doom and gloom" stories in the media let on at this point.
The areas affected by all this represent a majority of the population of the country. In reality, even in these areas, the price drops are not uniform. In a market downturn, the most exposed fall first. This downturn has been no different. Subprime debt, the most leveraged, risky debt created during the bubble, has already experienced a high-profile collapse. Sectors of metro areas that had a high concentration of subprime have already seen considerable drops. For this reason, individuals that live in parts of metro areas affected by the bubble/bust that did not have a high concentration of subprime lending have not seen as big of a drop or any drop at all. For some, it is easy to justify this phenomenon on a myriad of factors, some factual, many psychological. But as this bust continues, debt of higher and higher calibre is getting sucked into all this. So people with stronger and stronger finances have begun to become affected. And so the bust goes, working its way up the food chain of debt.