explain to me why the subprime melt down will hurt nice areas?
in the neighborhood where you have upper income people, who have good jobs, high incomes, …money…. when prices go down, they just sit tight, make their payments, and ride it out. they don’t have an ARM…they have a 30 year fixed and put down 10-20%..and have payments they are fine with. these people don’t drive the market down. yo may have the divorces, deaths, relocations, etc that force them to sell…but the majority just sit tight.
the nasty dirty areas where the gardner did a stated income loan and bought the 500k house he/she had no business even looking at…. now goes into foreclosure b/c they no longer can afford their neg am loan that reset…and the house goes short sale or foreclosure. you have piles of these in lower income areas….wherease you have less of these in nice areas.
if you have piles of forced sales, in less desirable areas, i see how prices go down. lots of inventory, maybe no to little demand..and prices drop.
but in a nice area, with well off people – how does the subprime market drops hurt these areas? i don’t see the connection? if the whole street were realtors, loan agents and roofers…maybe the housing slowdown hurts the street…but if you hve a doctor, lawyer, stockbroker, etc… all with good jobs/loans who can ride the storm out… why does their neighborhood go down?
