Lower priced homes have been harder hit than higher priced homes in this housing market, according to a study by Harvard University’s Joint Center for Housing Studies.
High-priced homes have lost 38% of their value since values peaked in 2006. Lower priced homes, on the other hand, have dropped 63% since peaking in 2007.
Why such a difference? It’s because lower priced homes appreciated much more before reaching their peak and therefore had further to drop than higher priced homes.
For example, in San Francisco, lower end homes nearly tripled in price before peaking. High-end homes, meanwhile, did not even double before reaching its peak. McCue attributes this partially to lenders making more loans available to lower income households during the housing peak days, which increased demand and prices.
Foreclosures have also plagued low-income areas, more so than higher income areas, according to the study. Foreclosures in low-income neighborhoods are more than double that of high-income neighborhoods, according to the Joint Center for Housing Studies.
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