A new study says that lower priced homes will have steeper price drops than their higher priced counterparts, according to a report by DSNews.com.
Already discounted heavily, many of these lower end properties are ‘distressed'. Before the housing market tanked, this market was robust due to the proliferation of subprime and ‘teaser' mortgages and lower down payments. With the tightening of credit conditions and lending requirements, this market has been hit harder than the higher priced homes that are generally dominated by repeat buyers.
But the higher priced homes face valuation drops, too. The analysis was prepared by Capital Economics, a macro economics consultant that provides international and property research. Their methodology used existing Standard & Poors Case-Schiller data that was weighted for 16 major cities and then created a national housing model. Their reports are available only on a subscription basis.
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