[Cosmo]

200-400 grand homes seem to be doing great here in Charlottesville Va.. Quite the seller's market. (mileage varies from section to section) But, From what I've gathered by talking to a few sellers and brokers,It's the 600 grand to million dollar homes that seem to be a hard sell these days. (despite the interest rates!) My neighbor just took their place off the market in hopes that the market for the higher end homes would return.
Back in the late 80s early 90s, westchester county prices were hit hard, with homes that had gone for well over a million only a few years earlier being unloaded at 500,000 and 600,000.

[TonyS6]

Yes, housing markets are localized. The general trend is that housing prices are increasing because the low interest rates are allowing increased first-time homebuyers (and uncertainty to multifamily investments). If the economy continues to slump, price appreciation will slow down. If the economy grows, interest rates will increase and appreciation will slow down. Either way - appreciation will slow down.

By the way, banks are at major risk of an Enron-type crisis. Read articles in CFO Magazine or look for an article on the web entitled "Banks: The Next Enron." Fannie Mae and Freddie Mac are remarkably well managed compared to a number of the off-balance sheet-loving banks.