Housing Data Contradicts Media Reports of Subprime Crisis

I just read a very interesting article by Sam Cass on BestCashCow. He compares a chart of where subprime mortgages are concentrated (Northeast and California) with data from the National Association of Realtors. The data, which I published several days ago, shows that both of those markets have relatively healthy housing markets, with prices having gone up over the last year.

The conclusion to draw isn't a hard one. How can there be a sub-prime crisis when the markets with the largest number of sub-prime loans are healthy?

I live in Massachusetts and I can tell you that as I reported earlier, prices here have not come down significantly. The local economy is strong and sellers are taking their homes off the market rather than sell them at lower prices.

My interpretation of the data is that housing prices are declining in places with oversupply and that are overbuilt - South, Midwest, Southwest. But these areas are less expensive and didn't require as much use of subprime and exotic mortgages. So the places where prices are falling are the places where there aren't a whole lot of sub-primes. At least that's what the data says.