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Prices to rise nationally, but fall in Greater Boston?

Posted by Scott Van Voorhis  October 23, 2012 07:03 AM

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Home values across the U.S. posted their biggest quarterly price increase since 2006, rising 1.3 percent to a median price of $153,800, Zillow reports this morning.

And expect another 1.7 percent jump across the country over the next year, the real estate website predicts.

The big question for us, however, is where Greater Boston prices are headed. And right now, Zillow is actually predicting some backsliding in prices locally over the next year - to the tune of .1 percent.

Hardly huge, but a step backwards at a time when real estate values appear to be on the rise again in major metro markets across the country, including Phoenix and other former Sun Belt basket cases.

OK, so it's a puzzling prediction. After all, it comes after a year in which home prices hit bottom and have begun to rise again in the Boston area.

Greater Boston, suburbs and all, saw values rise 2 percent over the past year, according to Zillow. (Zillow's index, as you may or may not know, mixes prices with assessed values.) Three out of four towns and cities in our metro market saw an increase.

Just take Cambridge, which saw home values rise 8.5 percent, to $442,300.

Then there is the drop off in homes listed for sale, a factor that would seem to weigh in on the side of further price increases, not a leveling off.

Yet, that said, it's also important to remember that we are already at fairly high levels - the real estate downturn didn't hit home here with the same, gut wrenching impact it had on many other parts of the country.

In fact, the Boston area is just 17.5 percent off its 2005 price peak hit during the bubble years - with upscale communities off just a few percentage points or in some cases now heading past the prior peak.

So if prices do level off, as Zillow predicts, don't expect much bargain hunting.

This blog is not written or edited by Boston.com 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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