Subprime lending is not used everywhere.  The higher income people are not getting those loans.  Subprime means the customer is not a prime borrower, he has a low FICO score.  Typically we're talking about a low income person who is financially irresponsible.  Since low income people are more likely to get subprime mortgages, the subprime loan fallout is going to hit the lower-priced areas much harder. 

Today, the OC Register published another report in its series on the subprime mortgages.  Today's paper shows the results of the OC Register analysis of 920K purchases mortgages made in 2005.  The paper has a graphic which shows the percentage of subprime loans by county.  We find that rich people who buy multi million dollar houses in Laguna Beach are not using subprime loans.  In Riverside and San Bernardino Counties, 33% and 40% of loans, respectively are subprime. 

They note that only 8% of San Francisco purchase mortgages in 2005 were subprime.   

Subprime commanded most of the market in relatively poor cities such as Compton, Lynwood and Rialto. In wealthy cities like Beverly Hills, Saratoga, Newport Beach and Laguna Beach, subprime accounted for less than 5 percent of the home-purchase market