The cliché has it that “all real estate is local,” and while that is certainly true in a broad-brush way, it’s equally true that some trends cut across local and even regional markets. Though some of the evidence is anecdotal, the national market appears to be subdivided into three categories of buyers:
–Middle-income households who took advantage of the Federal tax credits to buy homes in good neighborhoods at prices under the FHA ceilings for conventional loans.
–“Bottom fisher” investors who snapped up distressed properties for cash.
–Overseas investors seeking to put their capital to work in distressed U.S. real estate.
The price and sales spike was driven by supply and demand: an artifically low supply (a vast shadow inventory was held off market) was snapped up by buyers seeking to exploit a one-time credit and/or “bargain prices” set by massive numbers of foreclosures.
High-value, high-demand locales saw substantial spikes in price while lower-value areas (with high unemployment and low wealth creation) saw prices continue their slide.
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