How much of a leg down in prices? Here’s one forecast
Get this - the median price of a home here in the Bay State could fall to a somewhat more affordable sounding $250,000 by year end, if the forecasters have it right.
Home prices could fall another 3-to-6.5 percent across the Bay State over 2011, finds a new Fiserv Case-Shiller report. The report doesn't get into specific sale prices, but I took the high end of the range and did a little math.
A 6.5 percent decline would push the current statewide median price, now at $276,250, down to $250,000, if not a bit below.
Greater Boston could see prices drop another 4.5 to 4.8 percent, with the western suburbs - Cambridge, Newton, and beyond - falling on the higher end of the scale, the report finds. The Warren Group, on the Banker & Tradesman site, offers a good local breakdown of the Fiserv Case-Shiller numbers.
So what could that mean in terms of the median home price in Greater Boston?
Well it could knock another $20,000 off the median price, pushing it from $417,000, as of the end of March, below the $400,000 mark. (Regional numbers come from the Massachusetts Association of Realtors.)
Cape Cod, already hammered by falling sales - a 41 percent drop in the first quarter compared to the first three months of 2010 - could take a 6.2 percent price hit.
That could mean a drop of $19,000 or $20,000 from the current median home price, now at $350,000.
While the percentages sound modest, when you are talking about median home prices in the $300,000-to-$400,000 range, buyers may be looking at some significant discounts as we move deeper into 2011.
Moreover, that has been the style of the real estate downturn here in Eastern Massachusetts - steady, but unspectacular declines since 2005.
I am not betting on that changing now, but I know the more bearish observers out there may have a few thoughts on that.
