Good vs. bad areas more affected by financial crisis?


D

Dan Green

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.
 
Ad

Advertisements

R

Ronald Raygun

Dan said:
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.
Not necessarily.
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.
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.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

Good Moring 3
Financial Crisis.. 0
Good Debt vs. Bad Debt 0
Is this good or bad? 6
UK WorkflowMax Good or Bad? 0
Is HQ good or bad? 2
The BNP's Answer to Their Financial Crisis 11
The Good the Bad and the Mediocre 35

Top