[quote=sdrealtor]Ren
To echo BG’s thoughts it doesnt work that way in tracts either. Comps from the neighborhood. In early 2009, homes in oceanside were selling for under $200K but that had no impact on where I live in South Carlsbad. Most of the people looking here are looking in similar markets like Carmel Valley, Encinitas etc. This all goes back to the butterfly theory that old time poster Bugs championed. It just hasnt worked that way at least no where near a 1:1 or even 1:3 ratio.
Around here the choice isnt I’ll just go somewhere less desireable if prices are lower there, the choice is I’ll just rent here instead of buying. It changes things a lot from what your theory would predict.[/quote]
Sdr, what you’re totally ignoring is the fact that price drops WERE moving into the “more deirable” neighborhoods. Prices don’t all move at once, they roll into and out of areas during the RE cycle. The ONLY reason prices didn’t drop as much in the higher-end areas is because the Fed and govt intervened when they saw that the housing bust wasn’t “contained” in the lower-end areas. The price drops in the lower-end areas were pretty much done by the time the interventions began (foreclosure moratoriums of various sorts, buying up of “toxic” debt, govt takeover/expanded portfolios of the GSEs, massive interest rate interventions so that people could afford to refi into govt-backed mortgages, etc.). If you think prices would have stayed where they are without all the bailouts/interventions, then why do you think they wasted trillions of dollars on these programs?
