A recent study seems to confirm a point that Dave Schuler has been making repeatedly for months: the housing bubble is a narrowly targeted geographic phenomenon:
Via Andrew Sullivan [Yes, him again. -ed.], who summarizes, “66 percent of potential housing value losses in 2008 and subsequent years may be in California, with another 21 percent in Florida, Nevada and Arizona, for a total of 87 percent of national declines.”
Now, to be clear, this doesn’t mean that housing prices aren’t a problem elsewhere. I live in Virginia, which is one of the states least impacted — indeed, in the DC suburbs of Northern Virginia, which are even better off — and houses here, including mine, have still had a significant correction in price over the past 18 months or so.
But this does seem to reinforce Dave’s point that a national solution to a regional problem could be counterproductive. As with Homeland Security, where states vie to distribute monies allocated to defend against terrorist attacks without much regard to the localized risk of actually being attacked by terrorists, we’re likely to see federal relief money poorly targeted.
