There's Always Someone Worse Off

A year or so ago, I was calling our Sunnyvale/Cupertino area "the Oasis," because it seemed immune to the drop in real estate prices. It's true that our paper losses have only amounted to around 15% from the peak, while other area prices have come down 30-40%, but even our market has suffered.
A friend sent me an article from Forbes today which showed that even 'underwater' homeowners can take heart in knowing that other neighborhoods in the same city are worse off.
In the mansion-filled Bel Air neighborhood of Los Angeles, where sales prices have declined 31% at the median to $1.5 million, home owners can be happy that they don't live in Glassell Park in East L.A. In that part of town, buyers counting on neighborhood improvement when they bought in the fringe area have seen median sale prices plummet 50% to $225,000 in the last year.
In San Diego. Sales prices may be down 25% in University Heights, but homeowners there can say, "Better here than Horton Plaza." In that downtown, marina neighborhood, median sale prices are off year-over-year by 56%, to $612,500.
Forbes looked at the 25 largest cities in America to determine which neighborhoods witnessed the biggest year-over-year price drops. A neighborhood had to be within the city limits, have at least 10 sales, and prices had to be above $150,000. Otherwise,the list would be a rundown of markets such as Briggs, Detroit, where prices over the last year are off 96% to a median price of $2,500.
In San Antonio, Dallas and Houston, no neighborhoods fit the bill. In Greenwich Village in New York, sale prices dropped 45% from May 2008 to May 2009...but the price-per-square foot in the Village has only dropped 4%. That means most sales are for less expensive properties. The Manhattan luxury market is still down 26%, sales are flat, and listings have ballooned to record highs.
Nationally, there are too many sales in markets that are affordable to first-time buyers, driven by foreclosures and short sales, and too few sales in expensive parts of town because of a lack of financing and the impression that prices are coming down.
As Forbes says, in neighborhoods rich and poor alike, it's going to be a long summer.