Cheaper homes hit hardest by price declines
... is the headline of an article by MarketWatch and I'm fairly certain that owners of what I call less expensive homes might prefer their home to be called that rather than cheap.
But I wouldn't doubt that to be the case because it really wasn't a housing bubble so much as a credit bubble that caused the housing mess that we find ourselves in since "home prices at the lower end of the market rose at a quicker clip this time around, in no small part because of greater access to financing for low and moderate income households" according to Chris Herbert, research director for Harvard University's Joint Center for Housing Studies.
Here in Charleston, there's pretty good evidence to support that when you look at the difference between suburban neighborhoods a little further out where many first time home buyers were able to buy during the boom where you now find there is a lot more inventory of homes for sale including distressed sales than there are in more established neighborhoods closer to Charleston. And of course, more supply than demand causes prices to decline.
By the way, the article does contain a ray of hope regarding improved affordability today and a potential housing market turnaround. Herbert says though that "it's difficult for Americans to feel any urgency about making a purchase with mortgage rates remaining low and prices continuing to drop".
Herbert continues, "Given the assumed pent up demand, it's just possible the market turnaround could come quickly, once economic growth picks up at a meaningful pace". (my emphasis added)
And as I've pointed out on numerous occasions, one of the reasons that the Charleston housing market is so much better off than many others is that our economy, while not booming, is certainly in much better shape than many other markets.