I think after all is said and done the “desirable” areas will get hit hard too. As an example, during the last downturn Magic Johnson sold his oceanfront house in Maui for a $200K loss…and it was not nearly the most expensive home on the street. He wasn’t desperate to sell…that’s all the market would bear at the time….
These areas won’t be filled with as many desperate sellers with 100% financing….or toxic ARM’s as an entry-level area…But, when market psychology and the herd mentality turn even more negative it will bring all prices down.
