Kimberly_Blanton: Hi, I'm the residential real estate reporter for The Boston Globe. I'll take your questions about the current housing market, starting at 1 p.m. Look forward to hearing from you!

hs: What is your forecast for single family home pricing in 2007? -- Continued decline?
Kimberly_Blanton: Oh gee, I hate to forecast. That requires a crystal ball. Most experts think it'll start to probably to recover next year, but the spring is a toss-up at this point.

nonee: If you had an aging 2-family home in the suburbs that has been used as rental property, would you sell at this time or make improvements and raise rents (keeping in mind that we would be in for tax consequences on the income from the sale)?
Kimberly_Blanton: I am not a landlord but I do understand rents are going up. Isn't it, as with most personal finance decisions, about where you are in your life? Some folks think the market isn't going to go down much more but you can't rely on it.

davey: Do you have numbers on the current month on the ratio of listings to sold [homes] and do you know how that compares to '05?
Kimberly_Blanton: I'm really sorry. I do not, but that's a great question. I know inventories are up 33 percent over the past year.

Heidi: We live on Cape Cod and are trying to sell our nine-year-old Cape by ourselves. We've listed on the MLS and we've had many (25+) potential buyers through the house. They all seem to like it ...but no "reasonable" offers yet. Any tips on incentives to give?
Kimberly_Blanton: Heidi, that's a great question for your broker. All I can tell you is that the Cape is in really tough shape, worse than the rest of the state. Foreclosures are also high there. I'm not sure incentives are enough, however. It's about a larger market phenomenon. But again, ask your broker. Marketing is also key.

dubs: In Sweden, and perhaps in other parts of Europe, it's now mandatory for homes listed for sale to include a home energy audit, so buyers know how much energy the home requires to heat and cool. Do you think this is a good idea?
Kimberly_Blanton: My view is the more disclosure to buyers the better. Have you ever tried to get the seller to fork over a utility bill? You'd think they were asking you for their parents' will!

downwithit: How closely tied to fuel costs would you say this real estate market is?
Kimberly_Blanton: I believe that fuel costs started going through the roof just as interest rates were rising. To the extent --and it's a large extent-- real estate depends on the economy's strength and how much money is in peoples' pockets, higher energy prices, gas at the pump, heating oil etc. was definitely another important factor in slowing the market. But interest rates remain the biggest factor.

Davey: Could you re-explain what the median price figure represents?
Kimberly_Blanton: Happy to. We all know what the average price is: Add up all the house prices and divide by the number of houses you've added up. The problem there is that if you have one $15 million house, the average may be too high to be useful. The median is better and quite different: If you were to line up every single house sale, from most expensive to least expensive, the median falls smack in the middle of that line. It's the middle basically.

JC: My husband and I are looking to buy our first home. I want to buy now. My husband says wait another couple of months for the prices to get better. What do you think?
Kimberly_Blanton: Again, I can't forecast. But there are some things to consider: The rest of this year is going to be sluggish, the realtors and analysts say. So as a buyer you have a lot of leverage if, say, you put an offer on a house on Christmas Eve when everyone else is elsewhere. Just an example. What happens in the spring is that that's typically the best time of year for sellers, so it is possible for a bit of a bounce back next spring. But if the market's headed down farther, spring's better. That's what I can't tell you, but some were heartened by the latest report on October sales, which showed the percent sales decline was lower. We'll see how the November report looks.

SoldAtTheTop: Given that (1) Inflation adjusted median single family home price has been below 2004 median price since April and that August and September actually sent prices below the median set in 2003. (2) October has shown the lowest volume of sales any October since 1994. (3) Massachusetts is now poised for the greatest yearly sales drop of single family homes in at least the 17 years that sales have been charted. How are you able to responsibly report that there are "signs of market stabilization"?
Kimberly_Blanton: That's a great question. Frankly, an editor threw that in & I'm not sure why. It's too early to say for sure what will happen. We can only look at the numbers and see which direction they're going. As I quoted Sue Hawkes saying - and she's accurate - the sales declines and price declines were smaller. That doesn't mean we're out of the woods and there could be more trouble ahead. However, the economy is good. Thanks for your input.

Jones: Do you know if condo prices in Boston have been affected the same (percent decline) as single families in the Boston suburbs area? Is there less or more demand for one or the other? Just trying to decide if now is the time to sell my condo and move to the suburbs.
Kimberly_Blanton: Condo price data come out only once a quarter and in the third quarter of '06, median prices wee down 6.88 percent. That's a pretty big drop. But single-family houses in the suburbs had a 6.1 percent price drop in August (just taking one month). Does that help? As for when to move, wish I could help.

dubs: Do you think the glut of high-end ($1 million+) and special homes is going to effect the rest of the market? Do people really want to put that much money in a home now that it may not be such a great investment?
Kimberly_Blanton: I think that if someone wants a nice house and they have the money, they're going to buy, good investment or not. What is happening is a rush of Baby Boomers are selling big houses to downsize, and that is and will have an enormous market impact -- yet to be determined, I imagine.

Joe_Bush: With all the new developments in Boston do you think the influx effects the value of condos in more traditional areas like the Back Bay, where there not making anymore brownstones?
Kimberly_Blanton: I wonder that, too, because I own a Somerville condominium in an old two-family. What I see is a lot of young, successful professionals who don't like old. They want modern, sleek, clean, bamboo floors etc. They wouldn't want my place. But not all young people have that kind of money, so if they want to be close to the city they'll find nearby alternatives. I think the supply of houses in Back Bay specifically is small and so desirable I can't imagine the impact would be large. But I haven't reported on that, so I'm guessing.

Larry: Is the luxury condo market pricing going to decline further, or is this as good as it's going to get?
Kimberly_Blanton: The luxury market is pretty soft now. Some projects are seeing stalled sales or even converting to apartments because they can't sell. Again, I can't predict the market. How long do you want to live in this place? The analysts also say the economy's good, which is good for real estate. That requires yet another forecast.

yo: Do you think reports put out the realty associations on where the market is headed might try to put a rosy spin out to try to get more activity in the market?
Kimberly_Blanton: If you mean the monthly figures, I do not think they spin the numbers. I think they basically count up the sales. The issue is the breadth of their database, which is strictly agent-assisted sales. That leaves out a lot of transactions, say people selling online, on their own etc. Markets don't bend to one actor, even the realtors.
Kimberly_Blanton: Anyone who tells you a market stabilized -- my story in today's Globe suggested it was possible -- Take it with a grain of salt. But as I understand it, about 5 percent appreciation is a benchmark tossed around in the industry.

davey: I did find the inventory-to-sales ratio in my notes and did some quick math. It was 17percent in '05 and 12percent in '06. Question, what is your most reliable data source for current RE trends?
Kimberly_Blanton: So is the percentage down because there are more homes on the market or because sales are down or both? Probably both. I never rely on one data source.

johnnyboy: Hi Kim, my question is this. How can realtor groups (NAR or MAR) expect us to believe that prices will reach an equilibrium come spring when so many housing fundamentals are out of wack? This is the same song that the MAR was singing back in the spring when they were saying that the market was going to pick up or stabilize. It appears that the MAR continues to try and put a positive spin for their self serving interests.
Kimberly_Blanton: While MAR and NAR do not put a positive spin on their number calculations, they probably do paint a rosy picture of the market, even in down times. They love to say the "market has normalized." Try telling that to someone whose house won't sell. But if they make a credible case, it should be reported. Smart readers can then make their own assessment.

eskloe: Perhaps your views on the negative demographics at work here in Mass.: Very few people are relocating into MA, and from what I can tell, those listing are looking to move elsewhere. Your thoughts on this aspect of the market?
Kimberly_Blanton: I'm glad you asked that question. I have wanted to write a demographic story about Mass.: the picture is bleak. Our population is either shrinking or not growing. I have family in Florida and the population is exploding. Where would you rather own a house? On the other hand, Boston is becoming more like New York or S.F., in my view. Not a lot of housing, it costs a lot and people still want to live here. Perhaps the impact of the demographics will be outside Boston. Don't really know. But it's an important question that the NAR has analyzed, too.

Lisa: My friends put an offer in on a home yesterday, and the seller is asking $25 [k] below assessed value. DO you think this is a reflection of the current market, or is there some big dark secret that would drive the price down & they should know about?
Kimberly_Blanton: No, that happens in this market. Assessed values are based on house prices a few years ago and they were higher. No mystery there.

ar: What do you think will be the trend of the housing loans interest rates in the next year?
Kimberly_Blanton: [Federal Reserve Chairman] Ben Bernanke said apparently today that he thinks the economy will continue to grow next year, possibly faster. If the Fed raises rates, that eventually impacts the mortgage market. If the real estate market brings down the economy, he may need to raise rates. It's a very tough call right now and I doubt even Ben knows.
Kimberly_Blanton: oops -- in that last answer i meant "he may need to lower rates."

buffalo: Thinking about moving to Buffalo, N.Y. Better homes for the price etc.
Kimberly_Blanton: You would not be alone. There is great concern in Boston's business community that young people are going places where they can afford a home, whether North Carolina or Atlanta or Texas.

downwithit: If I buy right now, I will be tripling my cost of living, Are there any good formulas to determine when buying makes good financial sense?
Kimberly_Blanton: Tripling your cost of living is an extraordinary increase. I can't say. But: Do you put the $ difference between your future mortgage and your current rent in the bank every month now? Be careful is all I can say...

Mrs_Peel: I'm stunned at all the luxury developments going up in this market. I know many were probably conceptualized/funded while the market was better for sellers, but do any of these developers seriously think they're going to command these multi-million prices? Or does high-end housing simply not exist in the same sphere as middle-class home-buying?
Kimberly_Blanton: They can put up these projects and they are selling. We're having an unprecedented downtown building boom in residential. However, the condo market is slowing and there may be some projects sitting with empty units.

dt: When do you think the realtors will capitulate and start trying their spin (scare tactics) on sellers? (e.g. Sell now, or you may never be able to sell.)
Kimberly_Blanton: Actually, I sense growing impatience and bluntness on the part of realtors when talking to clients. But the fact is, the client owns the house & doesn't have to sell if he or she views a price as too low. It's their call. But there is lots on the market-- finding another house should be easy.

Jones: Thanks. Do you think the huge amount of 1- 3- or 5-year ARM mortgages adjusting, either because they can't afford it, or they chose that mortgage since they had plans to live there for the short term, over the next few years will pressure homeowners into selling, and therefore flood the market with yet more inventory and driving prices down even further over the next few years?
Kimberly_Blanton: This is a big and growing problem, which is driving up foreclosure rates. The impact is unknown and unfolding.

dubs: I heard many people over the last few years tell me real estate can't go down. So many people do view their home an investment, so they don't mind sinking a big part of money into their home. So I suspect the higher-end homes will come down greater percentage-wise than lower price homes. People have to live somewhere, so maybe people will opt for smaller homes. Higher energy prices increase that likelihood, I think. Do you agree?
Kimberly_Blanton: Real estate prices can and do go down. I lived in Dallas, Texas, where prices dropped sharply.

johnnyboy: How do you explain this theory of a market stabilization come next year when clearly the average property cost in Mass., vs. combined household income in an all time high at between 5 -6, when traditionally it should be in the 3-3.5 range?
Kimberly_Blanton: Yes, affordability is important to the housing market. Prices have gone up so much, fewer people can afford homes. However, the recent price drops have improved "affordability," which will bring in more buyers. To be clear: I am not predicting a stable 2007. That's what some real estate people think -- or maybe they are hoping. Code: They've given up on 2006!

RealEstateCafe_2: Kim, with respect to Sue Hawkes quote above, one needs to remember that we are now into the 2nd year of price corrections, so it makes sense the year-over-year changes would be smaller. Are there other indicators your editor or industry professionals are calling "strong signs" the market is reaching equilibrium? Or are we just seeing the short term up-tick because post-season, bargain-hunters are motivated to buy now? My guess is most are bottom finishing because interest rates have fallen slightly and prices are headed south for the winter.
Kimberly_Blanton: We are indeed into a second year of price corrections. But the price correction between June and October. of this year is about 1 percentage point bigger than last year in the same period. It's up but not 'accelerating' significantly. I do sense some buyers are bottom fishing but that activity will result in some sales. The biggest factor that is bolstering the housing market is the economy: It's good! Jobs in Massachusetts are up. Mortgage interest rates are low.

Alan: From 1982-2003, interest rates fell at the same exact time that the baby boomers (88 million) were buying houses. Since 2003, interest rates are rising and baby boomers are now beginning to downsize (not retire). Housing prices are always about supply and demand. The home-buying demographic -- ages 25-35 -- is much smaller than the Baby Boomer demographic. I don't see how people can write that housing prices are stabilizing. I expect that as long as supply exceeds demand we will see falling housing prices. If Baby Boomers are just turning 60, this will probably go on for another 10-15 years.
Kimberly_Blanton: Alan you raise a good point. As I mentioned, the Baby Boomer sell-off is expected to impact many markets. Perhaps the stock market in the future when we all retire. Right now, it does seem that the downsizing trend is another force putting downward pressure on prices, particularly in the suburbs.

buyer: Are first time buyers better off buying a condo in the city or home in the 'burbs?
Kimberly_Blanton: Any realtor will tell you to buy housing to live in, not to make money. Do you/are you going to have children? Can you afford to live downtown -- prices are insane. Think about lifestyle, plans, etc. -- not investments. I guess that's my best advice and something I hear often from realtors. Even though Baby Boomers are selling, the fact is Boston's housing supply did not expand that much during the boom.

Jordans: How low will prices drop?
Kimberly_Blanton: Your guess is as good as mine.

clueless: [Regarding]The comparison of your Somerville condo to new construction.... what are your thoughts on first-time buyers' expectations of granite, bamboo, stainless steel etc. and the impact to what they don't want to pay for those qualities ? I believe our 'standard of living' is at such a point but no one wants to pay for it. I look at a/c in a car as an example. How many people would buy a car today without it?
Kimberly_Blanton: First-time buyers want all the luxuries. Don't we all? I suppose they can afford more of that now then they might've two years ago, with prices down. But the square footage, location, and number of bedrooms trump granite.

clueless: You mention the sharp price decline in Dallas, but what were the underlying economics to it and so they exist in Mass. today ?
Kimberly_Blanton: No, they don't. Dallas' economy, its banking system and real estate markets were in a nosedive. That is a perfect illustration of my point: The economy here is pretty good. Could Boston, like Dallas in the 80s or Japan's stock market, have a mind-boggling asset deflation? That is always possible. Right now, it's not apparent. Stay tuned...

osmif: Would you agree that it is extremely difficult to get good, objective data or analysis of the real estate picture, given that everyone who has any interest in the topic, also has a vested interest, newspapers included, due to their increasing reliance on classifieds/real estate listings for revenue?
Kimberly_Blanton: As a reporter, I frankly don't read real estate ads. I've never been pressured to write a positive or negative article. The Boston Globe's biggest asset is its credibility. That's why I welcome debate about my stories and criticism. We have to make tough decisions on deadline, and we're not always right. And again you might as well ignore anyone who tries to forecast any market. An economics professor once said: "If I knew where the market was heading, you think I'd be doing this job?"
Kimberly_Blanton: I'm on deadline today and gotta get back to reporting and writing. I greatly appreciate everyone who wrote in -- even the questions I didn't get to. Again, thank you for chatting and for reading my articles in the Globe.