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When it comes to prices, is this as good as it gets?

Posted by Scott Van Voorhis February 1, 2012 06:31 AM

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Sorry, but the great home price collapse is looking about as likely right now as a visit from the Great Pumpkin.

It's hard not to come to that conclusion even with the latest Case-Shiller report.

The picture nationally is rockier than what analysts had predicted. Economists surveyed by Bloomberg had predicted a 3.3 percent drop in home prices nationally for November in the latest Case-Shiller report.

We wound up with a 3.7 percent drop and a 1.6 percent drop in Boston metro prices.

That puts housing values back at spring 2003 levels, or about an 18 percent decline locally, compared to as much as 30 percent nationally.

However, the numbers mask the unfortunate reality home buyers sooner or later find out about the Greater Boston market. The fact is, there really are no bargains out there, just homes, often in need of work, that are somewhat less inflated in price than they were five years ago.

Still, the bears were all over my post yesterday predicting price stability - gcbma brought up some good points.

Home prices in all three tiers are dropping YOY in Boston, according to today's Case Shiller data. The middle and high tiers are dropping at a slightly faster rate than the previous reporting period, and the low tier (under $257K) is the only one slowing up its decline slightly.

I know people who have been trying to sell their (less than $400K) homes in mid-tier towns and (greater than $1M) homes in top-tier W towns and they're all frustrated at having to reduce prices, agonizing over no offers, grumbling at having to consider and adjust reality to the only offers they're getting (10-20% under asking, after 10% price drops). Don't believe all the puffed-chest bullying and isolated tales that some of the bulls and Globe writers try to mock up here.

I'll take a pass at responding to the silly jab about "bulls and Globe writers." That said, gcbma raises a couple good points, though he misses the bigger picture here.

Some folks have clearly been waiting for the great home price cave in here in Greater Boston - defined here as within the I-495 belt - for years now.

But the great home price collapse hasn't happened yet, and with every drop in the jobless rate, the chances of any significant collapse get more and more remote.

And it may not feel like boom times here, Massachusetts, with its 6.8 percent unemployment rate, is a national leader, not laggard.

The jobless rate is even lower when you look at Middlesex County, which includes Cambridge and the western suburbs.

As of November, the jobless rate in Middlesex was 5 percent and falling as high-tech and biotech hiring ramps up.

But don't worry, that won't stop the housing bears from spinning fresh predictions of housing market doom.

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

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

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