Homes sold for a loss rising as market falls
Falling prices can be good news for buyers seeking deals - especially here in high cost Greater Boston.
But these are tough times for sellers, yes indeed.
The number of homes sold at a loss, on the rise over the past six months as prices have gone into reverse, hit a new peak nationally of 34.4 percent, according to Zillow.com's just released fourth quarter report.
Here in the Boston area, homes sold at a loss hit 30 percent in December, up from 28 percent in December, 2009, Zillow reports.
The average Boston area home value is now down to $314,200 - or a 21.1 percent fall from the July, 2005 peak. Nationally, prices are down 27 percent from peak, Zillow reports.
And the amazing thing is we've just started rolling on this double dip.
Boston area home prices fell 1.9 percent in the fourth quarter, one of the shallower declines nationally. Other markets, by comparison, got hammered, with home prices falling 11 percent in the fourth quarter in Chicago, 9 percent in Philadelphia and 5 percent in New York.
Even so, the pain is already starting to ratchet up here - homeowners stuck with underwater mortgages are now up to nearly 14 percent of the market, compared to 9.5 in the third quarter, according to Zillow.
It's also safe to say we can expect more price declines, here in the Boston area and across the country, as we move deeper into 2011.
A Reuters poll of 26 economists found 14 predicting home prices will bottom out in the second or third quarter. The economists are also predicting that 2011 will end with prices back in positive territory, albeit by only 1 or 2 percent.
Go figure.
There's reason to be skeptical - these predictions are typically a moving target. Take the same poll again in June and the same group of economists will predict the market will hit bottom in late 2011/early 2012.
OK, but the general trend is clear right now - falling prices and more unhappy sellers.
