Prices Plummeting in Far-Flung Suburbs

The areas hardest-hit by the subprime mortgage crisis are not just low-income and minority communities, but also outer-ring suburbs.
May 22, 2008, 6am PDT | Michael Dudley
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"In many metro areas, far-flung suburbs and exurbs face sharper price declines than neighborhoods closer to city centers.

It's no secret, for example, that Florida is among the states where property prices flew high and fell hard. But in Tampa's ZIP Code 33607, near downtown, the median home lost just 1.3 percent of its value last year, according to new research. ZIP Code 33573, in contrast, lies about 18 miles away and saw a 22 percent price decline.

The housing bust is also falling heavily on low-income and minority neighborhoods. That's not just a story of borrowers with a weak ability to pay. The larger story, another new study finds, is that lenders made a headlong rush to extend credit where it was least warranted.

What links these trends is that in both zones – the exurbs and low-income communities – the housing market peaked with lots of new loans and with lenders stretching the limits of sound finance. Now, these geographic patterns are partly defining the nature of America's economic slowdown and could also influence policies designed to heal the housing market."

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Published on Wednesday, May 21, 2008 in The Christian Science Monitor
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