Housing Crisis Hits Upscale Suburbs

Nov. 29, 2007— -- Two years ago, Kelley Lowry camped out overnight to buy a four-bedroom home in the upscale community of Fairfield, Calif., northeast of San Francisco. He paid $580,000.

"We bought at the top of the market," Lowry said.

Just six weeks later, his house was worth $750,000 -- but now? The value has plunged to just about $400,000.

"It's pretty devastating, especially when you owe more than that," Lowry said. "It's tough to swallow."

Fairfield is emblematic of suburbs across the country where home prices took off in the past few years in a booming housing market.

But now, home values have plummeted not just here but also in Wooster County, Mass., where they're down nearly 5 percent. Loudoun County, Va., outside Washington, D.C., is down 9 percent. In Polk County, Fla., values are down a whopping 13 percent.

In Fairfield, ABC News found that one house that sold for $450,000 last year now costs about $290,000.

The effects are devastating not just for homeowners but also for the businesses that rely on the housing industry.

Kevin Cerkoney said these are tough times for his lumber company, where business has dropped 50 percent to 60 percent.

It's the same sad story for the plumbing supplier whose residential housing business dropped 50 percent.

The local furniture company is closing its doors too.

But the pain doesn't stop there. Other retailers are starting to see the trickle-down effect and are nervous about the future. So is Lowry, who is sure his home will continue to lose even more value.

"I know for a fact it will," he told ABC News.