10 Responses to “MA Home prices Plunge” »»

1. Anon
   Comment by Anon | 05/27/09 at 5:41 am

   My impression is that real estate prices in the Boston area are still too high. Many sellers are not being very realistic and have priced their properties too high. The problem is easy to see by comparing the spread between average and median listing prices of properties currently on the market with the average and median prices of properties sold in the same area in the previous 3 to 6 months.

   To get up the number of houses and condos sold, prices need to come down.

2. condobuyer
   Comment by condobuyer | 05/27/09 at 6:40 am

   I agree with Anon. There are still some crazy list prices out there. If sellers need to sell they will have to become realistic very soon b/c summer is here and things will slow down. I see buyers out there at open houses but I don’t see anybody rushing to bid on the higher end.

3. confused
   Comment by confused | 05/28/09 at 1:35 am

   “The prices are low and the interest rates are low, but the banks aren’t lending,” said Aliza Dash, a real estate agent at Ford Realty Brookline. “I laugh and say, ‘Are you ready to get a blood sample to get a mortgage?’ ”

   I think this is the problem. Prices aren’t low. I dare Aliza to give a metric that shows that current prices are below average for the 50 years. We aint there. The other thing that one must consider is what happens to prices when interest rates go up. If low rates raise prices, what is going to happens when interest rates move off their “historic lows”?

4. Mike
   Comment by Mike | 05/28/09 at 4:23 am

   Confused, the ratio of buying a house to the alternative (renting) remains at historic highs. It is still difficult to financially justify buying versus renting when you compare current prices and rents to historical averages, particularly in Boston. Note I said “financially” – there are many other factors that go into the decision to buy a home.

   Another comon statistic, income to price, also remains high relative to historic norms. I think MA is now at 3.5 ish when long term is 3.0 – 3.2? People buy what they can afford, and with the income side looking wobbly due to the employment markets, I expect people are less willing to “stretch” their finances to buy.

   And I agree with your concern about rising rates – and you’re not alone. The government is doing a lot to try to keep rates low for just that reason. It’s hard to tell if their efforts are successful or not – we may not be back into normal transaction levels, but maybe they would be worse without the current government action? Hard to tell.

   Mike

5. Mike
   Comment by Mike | 05/28/09 at 4:24 am

   Confused, I misread your post and thought you were suggesting that prices WERE low, when you were actually challenging Aliza’s assertion that they were. My bad. Sounds like we’re in agreement.

   Mike

6. confused
   Comment by confused | 05/29/09 at 1:46 am

   Yes, Mike, we do agree. I rent for 2/3 the cost of “owning” an identical condo down the road (I’m basing this on the listed asking price). That’s not including the extra costs of upkeep and repairs. I’m astounded that people are calling low prices.

7. Numbers Guy
   Comment by Numbers Guy | 05/29/09 at 4:45 pm

   I just sold my condo, and I’ve joined the ranks of the renters. Prices will remain flat or negative for at least 1-2 years.

   Jumbo mortgages are over 6% even after paying a point, even with good credit and 20% down, and those numbers are only going to get worse over the next few years.

   Nothing is going to move for a while until incomes are in line with the cost of housing.

8. Renting here too.
   Comment by Renting here too. | 05/30/09 at 2:39 am

   I’m renting too. The prices that people are asking in the B. Bay / South End are riDONKulous. Are they freakin’ high? No wonder few properties are selling. I see so many places bought in 2006 for some retarded price, and now they’re asking even more than that? Uhm… no. That ship has sailed.

   Patience is called for here. Price reductions are starting to flood in.

9. Renting here too.
   Comment by Renting here too. | 05/30/09 at 2:39 am

   by “are selling”, i mean “aren’t”.

10. megan
    Comment by megan | 05/30/09 at 4:53 am

    Actually, if you look at the post today you’ll see that the average price of a Back Bay condo as increased by 6-7% and the median has increased by 8%.

    Although sales are nearly half of what they were when compared to a year ago.

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