Economists say home prices are nowhere near hitting bottom. But even in regions that have taken a beating, some neighborhoods remain practically unscathed. And a pattern is emerging as to which neighborhoods those are.
The ones with short commutes are faring better than places with long drives into the city. Some analysts see a pause in what has long been inexorable — urban sprawl.
The Washington, D.C., metropolitan area has been hit hard. Prices tumbled an average of 11 percent in the past year. That's the big picture. But a look at Ashburn, Va., about 40 miles from the center of town, finds a steeper fall.
In parts of the county, housing prices have dropped 18 percent over that same period. New construction has ground to a halt.
Realtor Danilo Bogdanovic surveyed two rows of neat, new, brick townhouses on Falkner's Lane. "These were selling for about $550,000 at the peak, which was about August '05, and they're selling right now for about $350,000," Bogdanovic said. "Fifty percent of this community has been ether foreclosed on or is facing foreclosure."
For residents who work in the city, their commute is around an hour on trouble-free days. But that can extend upward toward two hours.
At a recent auction of foreclosed homes north of Washington, in the Maryland suburbs, there weren't many takers. All of the addresses are far from downtown, and average commute times are among the highest in the nation.
It's a different story for properties that are closer to the city's center — in areas of Montgomery County that are on the edge of Washington.
"When I have a listing in this neighborhood, there are often 40 to 60 people coming through the open houses," said Pam Ryan-Brye, an agent with Long and Foster Real Estate.
Inside the city, median home prices are actually up 3.5 percent from a year ago.
Jonathan Hill, vice president of Metropolitan Regional Information Systems, which tracks home sales, sat in his office recently, clicking through page after page of price data sorted by ZIP code. There were a lot of negative numbers, but not in places that are close in or near public transit.
The 20912 ZIP code, for example, showed almost a 10 percent increase in average sales price, Hill said.
David Stiff, chief economist for the company that produces the Case-Shiller Home Price Index, saw the trend in other cities, as well — including Los Angeles, San Francisco, New York, San Diego, Miami and Boston.
Stiff recently matched home resale values against commute times and found that in most of these major metropolitan areas, the trend is the same. The longer the commute, the steeper the drop in prices.
Stiff says home buyers' attitudes have changed. The old rule was, "Drive 'til you qualify" — meaning they should go out from the city until they could get what they wanted at a price they could afford.
Stiff says buyers are now asking different questions: "What is the cost of gasoline? What is the cost of my time?"
Recent studies suggest that buyers underestimated the costs of their long commutes. Those expenses can add up to more than the buyers saved on the home. Developers also miscalculated, lured by cheap land and rising home prices. They overreached, "partly because the bubble collapsed, but partly because these developments were just bad ideas to begin with," Stiff said.
Many of the projects were simply too far away from places that people need to go.
Builders have already shifted gears. David Goldberg of Smart Growth America, a national coalition of planners and environmentalists, points to what his hometown, Atlanta, was like in the 1990s.
"Atlanta was recognized as the fastest-spreading human settlement, probably in the history of the world," Goldberg said.
But while the suburbs spread, the city was losing population. Now the tables have turned. In the past two years, new construction in what had been forests and farmland has slowed by more than 70 percent, but construction in town has held steady.
Goldberg sees other cities rebounding, too, including Baltimore and Philadelphia.
"Philadelphia was losing downtown housing and in-town housing until very recently," Goldberg said. "And now that's the hottest part of their market."
Goldberg expects the trend to continue, even after the current housing crisis ends. Throughout the country, the percentage of families with children is shrinking. The share of empty-nesters, seniors and young people living alone keeps heading up. Those groups don't typically seek big green lawns.
"We don't live in the Ozzie and Harriet era anymore," Goldberg said. "We live more in the Seinfeld, Sex in the City era, in which young people find cities to be compelling."
So for now, at least, it seems that sprawl may have stalled — but not everywhere, and probably not forever. Experts are waiting to see what the next housing broom brings.