... Several housing experts said that the effectiveness of the bailout would be highly dependent on each individual neighborhood. In a neighborhood where housing prices have already dropped significantly and have bottomed out, the legislation could spark sales from new buyers said USC professor Youngheng Deng.
In neighborhoods where prices are still too high for most buyers, the tax credit could stir enough activity to keep housing prices for dropping to the level where they would need to be for more people to afford them. "The tricky part is whether the market is back to its fundamental level, or whether a bubble still exists," said Deng.
Delores Conway, the Director of the Casden Real Estate Economics Forecast, said she expected areas like the San Gabriel Valley to be affected most. Like many other regions in Southern California, San Gabriel Valley home prices have dropped significant even though there hasn't been an extremely high level of foreclosures.
In those neighborhoods, where the monthly payments on real estate are getting closer to the price of monthly rent payments, the tax credits could be the difference for renters looking to enter the housing market, she added...