Historically, it is not unusual to find pockets of weakness in strong markets or to find prosperous pockets in weak markets – which is why the classic real estate mantra is “location, location, location”.
The question is how to define markets and sub-markets which vary by purpose, by changes in competitive advantage, and over time – and can be counter-intuitive. For example, in areas such as Silicon Valley, the demand for upper income housing may vary by a greater factor than the demand for middle income housing while the demand for affordable housing may be strongest. Thus multi-million dollar homes may sit unsold while lower cost houses sell (especially when you factor in government assistance such as FHA loans at the lower end of the market).
When loans are being paid, you can think of real estate as an asset class but when they start defaulting, they’re individual properties.
Market anomalies skew home-price data, providers agree – MarketWatch
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