Is the nature of the housing market changing fundamentally?

The Patch online website for the Gaithersburg area has an article, Kentlands/Lakelands Resilient to Housing Woes," about how housing in Kentlands/Lakelands is maintaining its higher pricing, despite the overall real estate downturn.

Kentlands is a famous subdivision in planning circles because it is a new urbanist community, designed by Duany Plater Zyberk. (Although I talked to Andres Duany about Kentlands once and he said Dupont Circle, an in-city neighborhood, is still better.) Lakelands is a kind of dumbed down version because the original developer failed during the region's last major real estate downturn (in the late 1980s) and the new developer didn't have the same vision.

This is an interesting article but is incomplete. The question is are other MoCo subdivisions not built along NU lines still doing well? Such would be a function of the general market in the inner core of the Washington region, e.g., DC, Arlington, Alexandria, MoCo, Reston/certain parts of Fairfax County doing well, comparatively speaking, outer suburbs and PG County not doing well.

The planning process for the current Growth Policy for Montgomery County clued me into the reality that as residents age out of homes bought during a different time, there won't be a large enough market of "new" home buyers interested in that kind of housing.

This is the basis of "sprawl repair" ideas like breaking up McMansions into smaller apartments, not unlike how large houses in the city--built for larger families--got broken up into apartments decades ago.

That's where neighborhoods like Kentlands are likely to shine, and maintain their relevance and value in the suburban context, as inner city neighborhoods continue to maintain their value in the urban context and the redefined market for housing--higher gas prices, higher interest rates, higher downpayments, no Fannie/Freddie to maintain financing liquidity in the mortgage market, the possible elimination of the mortgage interest deduction, etc. (See "The new mortgage rules" and "GOP proposal would raise FHA down payments" from the Post.).

All of these factors will de-value outlying locations in most metropolitan areas across the country. The trick for homebuyers and homeowners is to be able to apply the right strategy for the submarket they want to be in, whether or not its a strong market, etc.

Judging by what I watch on HGTV (granted, it's television) and what I read in newspapers like this op-ed, "Downsizing the American Dream," from the Post, many people have a hard time recognizing and responding to the factors that are relevant to their particular market.

Articles that touch on these issues include "California to suffer housing shift, UCLA forecasters say" from the Los Angeles Times, this article on the increased demand for apartments in the DC region, "Apartments headed for burnout?" and this about the housing market more generally, "Home prices hit double dip ," both from the Washington Post, plus "The Shrinking American Home" from the Wall Street Journal.

The LA Times article is summarized as:

Demand will grow for urban rental units by the coast and shrink for single-family homes inland, resulting in fewer construction jobs and no boom for some areas hit hard by the housing bust.

I think that's the same basic thrust everywhere. Metropolitan areas will "shrink" in terms of the type of housing that's successful, and outlying locations will lose location value.