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So far, Greater Boston home prices defying downward trend

Posted by Scott Van Voorhis December 10, 2010 09:37 AM

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Now how's this for a contrast?

Nationally, home values are on track to drop $1.7 trillion in 2010, according to a new report out by

But here in the Boston area, we should see the overall value of our homes and condos rise by $10.8 billion by year end. And that's on top of a $4.6 billion bump in 2009, when the Great Recession was still on the books.

To put things in perspective, Zillow pegs the overall value of the Greater Boston real estate market at $531 billion, down $105 billion from its bubble years' peak.

But hold the bubbly - I am not so sure the recent increases are something we should be celebrating. First, we may very well be on the edge of a reversal in this trend, and second, there's a good argument to be made that home values are still much too high here in the Boston area.

For starters, as I have noted before, it's a somewhat different picture when you look at the big plunge in home sales since the home buyer tax credit expired last spring, which, over the past few months, has resulted in some weakening on the price side as well.

The average Greater Boston home value, at $324,000, is still up .07 percent over 2009.

But it represents a 1.2 percent decline in the third quarter from the second.

And for those out there who believe home prices in the Boston area are still inflated, there is ample ammunition here as well.

Just take a look at how Greater Boston stacks up against much larger metro markets that also have sizable concentrations of wealth.

The Boston area has half the population of Greater Chicago - 4.5 million to 9.5 million - but still manages to come close in overall real estate market value, $531 billion compared to $625 billion, according to Zillow's numbers.

The Dallas area, with a population of 6.4 million, has close to 2 million more people, yet J.R. Ewing's hometown is worth $1.3 billion less.

Certainly looks a little bubbly to me!

This blog is not written or edited by or the Boston Globe.
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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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