Housing prices tumble in Boston area
Slow economy, end of buyers’ credit cited; little growth expected
Boston area housing values dropped 1.2 percent in October compared with the month before, adding to a modest midyear slide in sales prices caused by the sluggish economy and aftereffects of the expired federal home buyers’ tax credit.
The most recent market results of the Standard & Poor’s Case-Shiller Home Price Indices further show that the Boston area housing market continues to bounce along a bottom, according to industry analysts, with minor fluctuations that are expected to continue next year. Values are down 0.2 percent compared with a year ago, according to the index.
“I do not expect to see sharp increases or decreases in prices over the next six months,’’ said Barry Bluestone, dean in the School of Public Policy and Urban Affairs at Northeastern University. “We are going to stay where we are.’’
The Boston housing market peaked in September of 2005 — earlier than the rest of the country — and dropped 20 percent in value before showing sparks again in March 2009. The local market is now 15 percent below that 2005 price highs, according to the Case-Shiller index.
In contrast, home prices in 20 major cities tracked by the index fell more dramatically since 2006 — by about 33 percent — and have come back up only about 3 percent since last year’s lows. The October numbers for other parts of the country are sobering and are prompting some analysts to fear another housing slump.
Six metro areas — including Atlanta, Charlotte, Miami, and Portland, Ore. — recorded their lowest home values since the downturn began, according to S&P.
“The double-dip is almost here,’’ said David M. Blitzer, chair of the Index Committee at Standard & Poor’s. “There is no good news in October’s report.’’
Blitzer, however, added that Massachusetts could be out front on the way to recovery. Boston may be a “sign of the future for some of these cities,’’ said Blitzer, “as long we don’t suddenly discover there is another hole’’ in the bottom.
Mark Zandi, chief economist for the Pennsylvania-based research company Moody’s Analytics, said the Boston area likely will hold its values while the rest of the country experiences more price declines over the next six months. Zandi attributes this, in part, to the foreclosure crisis hitting other parts of the nation harder than the Boston area.
“We are in the last legs of the housing crash,’’ he said. “By this time next year I expect prices will start rising in a consistent way.’’
Meanwhile, local real estate agents are hoping for a robust spring. Sales volume in November dropped for the fifth consecutive month, largely because many buyers had purchased properties earlier in the year in order to qualify for the federal home buyers’ tax credit, which gave eligible home buyers as much as $8,000 off their taxes.
“We have a lot of buyers who are in the wings waiting for the right property,’’ said Laurie Cadigan, incoming president of the Massachusetts Association of Realtors.
Jenifer B. McKim can be reached at jmckim@globe.com. 
