I think that it’s more a matter of the rate of turnover and the number of transactions rather than expensive vs. less expensive neighborhoods.
Expensive areas have less turnover. They are built-out so they don’t have as many new comers.
In the end it’s going to come down to the relative desirability of the “nice” neighborhoods in relation to the other neighborhoods. They are all connected.
For example, Nordstrom might be able to command 4 times the prices of Target. But if Target drop their prices, Nordstrom will have to eventually drop their prices as well to keep the value/price ratio in balance. That’s despite the fact that Nordstrom customers are well-to-do. Otherwise, Nordstrom will slowly loose market share and go bankrupt.
Actually, if you look at the history of run up, you’ll see that many of the lower priced properties in less desirable areas quadrupled. Expensive coastal properties also quadrupled. But upper middle-class areas such as Carmel Valley and Rancho Bernardo only more than doubled. So, now looking at the downturn, a larger drop in less-expensive neighborhood is just giving back at the same rate of appreciation.
Interesting topic. Great business school project. One could review all the past sales and analyze rates of appreciation and depreciation by price groups.