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Greater Boston near tops now in home price reductions

Posted by Scott Van Voorhis  June 17, 2010 09:29 AM

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Congratulations! We've made the top ten.

Give yourself a nice pat on the shoulder this morning, for when it comes to sellers slashing prices, the Boston area is right up there with the best of them.

The Hub and its suburbs weigh in at No. 7 in a ranking of home price reductions in the nation's top 50 metro markets,Trulia.com reports.

Slightly more than a third of homes on the market in Greater Boston had at least one price reduction as of June 1. That's a sizable increase from earlier this spring, with the end of the home buyer tax credit on April 30th apparently prompting lots of local sellers to reassess.

By comparison, nationally 22 percent of homes on the market have dropped prices at least once, according to Trulia.

Still, you have to wonder how many of the price drops we are seeing in the Boston area are just for show - throwing bait out for potential buyers - rather than real reductions.

The average reduction in Greater Boston is 7 percent - not much given that home prices still remain much too high here compared to the income of the average buyer. (For a family of four, the median income in the Boston area is just over $90,000.)

Despite the long fall in real estate values we've seen over the past few years, the decline has been somewhat shallower here in the Boston area compared to many other major metro markets.

Prices are off maybe 15 percent from their bubble years' peak - but would have to drop another 18 percent to bring them in line with local incomes, a recently released Boston Fed report suggests.

Yet break out that champagne - shallow reductions or not, we are still in the top ten.

Actually, given we are tied with Kansas City, there are only five other cities between the Hub and the top spot as the nation's home price reduction king.

Minneapolis holds top honors, followed by Milwaukee, Baltimore, Dallas and Phoenix.

Have to find something to celebrate these days.


This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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