by Calculated Risk on 11/08/2009 08:28:00 PM

Here is some more on a theme we've been discussing ...

From Carolyn Said at the San Francisco Chronicle: Default notices rising in upper echelon ZIPs (ht Hymn)

In upscale communities such as Los Altos, Greenbrae and Alamo, where median prices top $1 million, about twice as many households received default notices from January to September as in the same period in 2008, according to recorders' office data compiled by MDA DataQuick, a San Diego real estate research firm.

The same is true for mid-scale areas with median prices around $500,000, such as Walnut Creek, Los Gatos and Campbell.

"The question is, could this be the beginning of something that gets a whole lot worse?" said Andrew LePage, an analyst with DataQuick. "The distress in the high end right now is important to watch; it helps explain why we have more sales (of high-end homes). More distress means more-motivated and more-realistic sellers. We're just starting to find out whether the riskier loans that were not subprime will come back to haunt us."

There is much more in the article. The mid-to-high end will never see the levels of foreclosure activity as some of the low end areas - and the process will take longer because many of these homeowners have other financial resources. But I do expect further price declines in many mid-to-high end areas as distress sales increase.