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Good vs. bad areas more affected by financial crisis?

Given the recent undersupply of buyers due to failing mortgage markets and tightening loan criteria, are good or bad areas (as defined by ACORN classifications) more affected, experiencing larger price drops?

I believe it will be bad areas that will be more affected as the buyers here are more sensitive to lack of credit. Buyers in more affluent areas would have more disposable income and thus be less susceptible to financial downturns.

Please correct me if I'm wrong as I'm trying to decide between buying in a good area far from work or a bad area close to work.

Reply to
Dan Green
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Not necessarily.

I think you're wrong. Surely in both areas there are plenty of people whose investment in their property is stretched as far as their ability to borrow will allow. As ability to borrow becomes impaired, the affluent *people* will still have the option of moving out of the affluent *areas*, i.e. downmarket. Hence the undersupply of buyers should affect expensive ("good") areas more than cheap ("bad") ones.

Go for the bad area. In the good area, you may only just be able to afford to live there, but there won't be enough left in the budget to cover the cost of commuting. Fuel prices...

If you do go for the bad area, try not to waste all your disposable income, but build savings instead, so that one day perhaps you can aspire to move to a better area.

Reply to
Ronald Raygun

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