The S&P/Case-Shiller home-price index, a closely watched gauge of U.S. home prices, continued to post record declines in January.
In the 20-city index, no area experienced year-over-year price gains, the tenth straight month that has happened. Further, none of the cities managed to avoid month-to-month declines for the fourth month in a row.
Read the full story from the Wall Street Journal
The following is a comment from a Wall Street Journal reader regarding the above article:
I’m from the Boston Metro area and the numbers are an accurate reflection of conditions here. The index seems to do a good job in showing “what”. A little more information added might tell us “why”. In Massachusetts the median household income is around $62,000. According to the Warren Group the median house price has declined to $245,000. Traditional underwriting standards require that the monthly carry for mortgage, taxes, and insurance are from 25% to 28% of income. With a 20% down payment the carry at a 5% mortgage and an annual tax of about 3,000 would be around $1,450 and that just makes the median home price in line with the median household income. Sales should be booming so what’s up???
If you look into the Case-Shiller data more closely you will see that the existing price index has its corresponding match anywhere from 3.16 years ago in NC-Charlotte to 12.67 years ago in MI-Detroit. In Boston metro, if you have bought in the last nearly 6 years then you are likely to lose money on your sale. The closer you purchased to the Nov 2005 peak, the worse off you are. There are vast numbers on home owners that fall into this group and they are holding their properties off the market in hopes that there is a rebound but that rebound would require houses to become unaffordable again. Stalemate!
Instead of giving $8,000 to first time home buyers perhaps we could come up with some tax credits or deductions that would help sellers divest at a price that current incomes could sustain.
Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs
In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.
For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.
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