Real Estate Market Collapse: Now Coming to the Nice Cities

Even during the worst days of the collapse of the housing bubble (Sundays through Saturdays), it was widely assumed that the real pain would be confined to Vegas, and Florida, and other places where people woke up and realized that they'd just paid $1.3 million for a particleboard McMansion in the middle of a desert and/ or swamp.

Not so! In fact, we're now finding that even "nice" "attractive" cities with a "high quality of life"—the types of places where people wanted to live even before the real estate boom—are also experiencing plummeting home prices. Sorry, American dreamers! Atlanta's down! Minneapolis is down! The NYT reports that Seattle's already down more than 30% from 2007, and "still has as much as 10 percent to fall." Everything's pretty much terrible in your happy stable community!

[Housing economist Stan] Humphries estimates the rest of the country will drop a further 5 and 7 percent as last year's tax credits for home buyers continue to wear off.

"We went into 2010 feeling gangbusters, thanks to Uncle Sam," Mr. Humphries said. "We ended it feeling penniless, with home values tanking."

Once again, Playing By The Rules and Doing All The Right Things has landed you in the poor house. Just look at it this way: the several hundred thousand dollars in home equity you lost is nothing compared to the $1.65 trillion US deficit. Your kids will get to worry about that one.

[NYT. Photo: Frank Hebbert/ Flickr]