Here comes the double dip?
Wow, now here's a potentially seismic shift.
Check out this morning's Case-Shiller report - every single major metro market tracked, including Boston, saw home prices fall in October.
And Boston area prices, after months of steady declines, have finally sunk below 2009 levels. We're down .2 percent from October 2009, with a month-over-month decline from September of 1.2 percent, according to the S&P/Case-Shiller Home Price Indices.
It is news that should not come as a total surprise - sales activity fell off a cliff in spring after the home buyer tax credit expired.
Certainly looks like a double dip, still how deep a dip we will see in 2011 remains to be seen.
Boston area home prices, thanks to a perennial dearth in new home construction, have been particularly stubborn on the way down. Even if prices continue to fall in 2011, that dynamic may mean a shallower decline here compared to the rest of the country.
Just take the recent reports by the Massachusetts Association of Realtors and the Warren Group, publisher of Banker & Tradesman, which both reported increases statewide in median home prices.
Now these are fine data sources - the latest findings are yet more evidence in how home prices remain inflated in perpetually pricey Greater Boston, years after the real estate market began to shift into reverse.
But that doesn't mean we won't see any fallout, and in any case, the monthly Case-Shiller reports take a different approach, looking exclusively at repeat sales of existing homes. That means new construction is screened out, a factor that could explain some of the difference given new homes carry an especially hefty premium in the Boston area due to their scarcity.
This next quote, taken from the press release that announced the new Case-Shiller numbers, just about says it all.
"The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks. There is no good news in October's report." says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's.
