SPDR S&P 500 (SPY)

[euterpe1]

You are right about the non-diversified neighborhood thing. With stated income loans essentially gone or at best a tiny fraction of what they were, those neighborhoods will see minimal if any appreciation for a few years. The reason is simply going to be supply and demand. My guess is demand will be low compared to supply unless the investor market steps in to do the buying.

Other areas which have been traditional full doc markets will fare much better and will they will still see some ST market softness, they won't see much in the way of lower home prices in the IT.