Ordinarily, high-priced homes are mostly immune from gyrations in the market. But these aren’t ordinary times. In Santa Barbara California even the 2 million dollar+ homes are sitting on the market with sellers being forced to drop prices. This is quite unusual.
In nearby Carpinteria, which is much less pricey, the cheapest 2 bdr condo is $415,000. There have been no sales in that condo complex for a year. Not one. People can’t afford them, especially now that the subprime door has been slammed shut. And many of those who do own condos there may get foreclosed because they can no longer afford their now much more expensive mortgages.