Boston housing prices

This seems to answer the question that Kimberly Blanton posed a month ago: "Is a turnaround afoot?"

Greetings Boston Real Estate Now,

As some of your readers know, focusing on median sales prices can understate the magnitude of the changes in the housing market. If, for example, you focus on sales of single family homes in the 28 most expensive suburban communities in Greater Boston last month (Sept. 2007), these findings emerge from the MLS:

1. Sales were down nearly one third from last year: 216 sales in 9/07 versus 300 sales in 9/06;

2. The percent of homes selling below their assessed value, once unthinkable in Greater Boston, rose slightly from 37% in 9/06 to 40% in 9/07;

3. Those who argue that prices are holding up in Greater Boston can point to these stats:

3.1 Twelve listings sold for over their original asking price or 1 in 20 listings;

3.2 Another 13 listings sold for their original asking price or 1 in 20 again;

4. In contrast, those who argue that median statistics are misleading would point to these stats:

4.1 One in four listings, or 53 of 216 single family homes in the most expensive suburban communities, sold for at least $99,000 less than the original asking price;

5. Looking just at the 86 homes which sold below their assessed value, 1 in 3 sold for at least $99,000 off;

6. Switching from dollars saved to percent saved last month:

6. One in three listings sold for at least 10% less than their original asking price; and worse

7. One in ten sold for at least 17% below than their original asking price!

So, if you are a buyer, don't be too quick to base your assessment of market value, and hence your offer, on median sales prices or market indexes which are showing modest declines. Historically, one in five homes which go under agreement between Thanksgiving and New Year's, sell for at least 10% below the original asking price. As the statistics above reveal, price reductions are likely to be deeper and more wide spread this year.

Were only in the 2nd inning of the housing downturn.
We still have a long way to drop. Inventory is up, demand is down. Lenders are tightening standards. We still have nearly $2 trillion in ARMs scheduled to reset by the end of 2008. You think the credit crisis back in August/September was bad, just wait until next spring. The dollar is plunging. Oil is at record highs. Food prices are skyrocketing. Inflation is spiraling out of control. The US economy is contracting. Consumer spending is beginning to wane. There's plenty of bad news and not much good news. All I can say, is protect whatever assets and wealth you have now, it's going to get ugly.