real estate
Market a real fixer-upper

He says that while some California and Florida markets did see have huge declines, as well as many of the markets in the industrial Midwest, such as Detroit and Cleveland, there were some bright spots, such as in Texas and the Rocky Mountain states.

5. The donut effect 
Even in markets with highly publicized losses, prices didn't fall in any uniform way.

"There are places where the local economy was strong, investment was strong, immigration was good, and all that came together to hold up the market in some places you might be surprised about," says Simonsen.

He says places like Manhattan and San Francisco actually had respectable years.

"The weak dollar brought European investors and buyers in, which are holding that market up just fine," he says. Demand held the market up more than people expected in the core, high-end city centers and prices held strong.

Simonsen says that story repeats itself in many of the major metropolitan areas, largely a result of the increased inventory: With so many houses for sale, buyers who were able to get financing had their pick of the market.

And with the entire city available at reasonable prices, most people chose the areas that had been historically most desirable. "There have been two different markets," he says. "There was enough inventory in those nice parts of town, that every other part of town ended up doing poorly while the attractive areas stayed strong."

And not even the tight credit markets took their toll on these areas, yet. "You don't buy a $4-million home with a subprime loan," Simonsen says.

But that strength may not hold up through the end of the year, he warns, "We expect an oncoming recession by the end of the year, and with people worried about their jobs, even the high end will weaken," he says.

6. The bright side 
One of the few groups who actually benefit from the morbid real estate market is buyers who have relatively strong credit.

"It is absolutely a buyers market," Goodkin says. No, the market hasn't bottomed out, he says but buyers who do their homework and study their market will find terrific values. "As long as you are buying the house as a primary residence, and you are selective, there are good values out there and you won't get hurt," Goodkin says.

Some economists are holding out hope that once people start buying, they will begin a chain reaction that will help buoy the market. One indicator that shows they may be on to something is a survey NAR did polling sellers with homes on the market.

"The interesting thing is that 80 percent of those people told us that they want to buy as soon as they sell," Yun says.

Michael Giusti is a freelance writer and teaches journalism at Loyola University New Orleans.

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