In the suburbs, sellers are dropping their prices in order to make their homes more enticing to buyers.
“This is how corrections work,” said Alan Clayton-Matthews , a professor of public policy at the University of Massachusetts at Boston. “When there’s excess supply, prices will adjust to clear it. And they’re not going to adjust upward.”
You don’t really have to know more about economics than that simple concept, right?
Which is why the Boston market is somewhat immune to price drops. There is a limited supply of properties – we had 250,000 housing units in Boston in the year 2000, we have 255,000 housing units, today. Yet, there are plenty of new buyers who need a place to live, and not that many people who are selling. Therefore, prices stay somewhat steady.
That doesn’t mean it can’t change, of course. But, for the time being, downtown Boston home prices should remain constant.
Complete story: Declining home prices boost sales – By Robert Gavin, The Boston Globe