Greater Boston facing a double dip in prices?
That anyway is the the prediction of the smart folks over at Zillow.com.
Boston, along with San Diego, Atlanta and 20 percent of the major metro markets tracked by Zillow has been fingered as a potential double dipper when it comes to home prices.
In fact, according to Zillow, home prices across the Boston area may have already begun to do the terrible double dip.
(Of course, just as I posted this, the Massachusetts Association of Realtors came out with their January report showing big year-over-year gains in sales and prices - though, as you can imagine, it's hard not to beat January 2009. However, from December to January, median home sale prices fell 1.6 percent.)
The red flag, according the online real estate firm, is a .1 percent decline in prices in December from November, down to $321,000. All told, 20 percent of all Boston area home sales in the last month of 2009 were for a loss.
For its part, the .1 percent decline may sound like nitpicking, but it is part of a larger trend here that has seen home prices stagnate or fall in key markets after staging a rally earlier this year
And more declines are likely on the way this year - though how much is the question.
The reasons for a healthy dose of pessimism are obvious, with the federal government looking to pull back from its role as the sugar daddy of the mortgage market and with the home buyer tax credit (at least ostensibly) set to sunset at the end of April.
But at least the regulars on this blog won't much like Zillow's conclusion.
After reeling off all the forces tugging home prices downward, Zillow's chief economist goes on to predict that the second time around will be much milder than the first.
"The good news is that, for those markets that will see a double dip in home values before reaching a definitive bottom, this second dip will not be a return to the magnitude of depreciation seen earlier, but rather will look more like a modest aftershock of the earlier downturn," Stan Humphries, Zillow's chief economist, is quoted in a press release. (Check out his explanation on Bloomberg TV.)
Certainly, it's an argument that is likely to hold more water for a market like Boston.
Yes, we have had our dose of foreclosure misery - even Nantucket is feeling the pain.
But it's nothing like the massive overbuilding and successive waves of bank seizures that have torched Las Vegas, Phoenix and Miami.
Now I am sure to get some heated retorts - and the more the better. But then show me how you can realistically compare the foreclosure problem in Greater Boston with that of various Sun Belt cities?
