2009 Real Estate Forecast: Troubles Spread

2008 was the year that subprime borrowers and speculators got hurt by the real estate crisis. 2009 could be when everyone else gets hit. Until now, the nation's most serious home price declines have been in low-cost markets that were dominated by subprime mortgages, and in overbuilt markets such as Florida, California, and Las Vegas, where residential values are sliding fast toward pre-housing boom levels. Housing and mortgage problems pushed the nation into a recession that could now amplify, draw out, and expand the reach of the housing declines. Few areas across the country will likely escape the recession and the corresponding impact on the real estate market. On the other hand, the speculative Las Vegas, Arizona, California, and Florida markets, which have already seen annual home-price declines of up to 30%, could see slightly smaller declines simply because values have already fallen so much. Some Florida markets, including Naples, Orlando, and Tampa, are already seeing declines moderate a bit, but problems in other Florida markets, such as Miami, continue to get worse.

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