I will have to do some research on this, but my first reaction to the two stories, below, from the Boston Herald, is that they are not reflective of what’s really happening out there, right now.
First, any suggestion that Dorchester isn’t hot hot hot is just plain wrong. I’ve been there extensively over the past month, and the amount of activity is staggering. I have heard about loan problems in those neighborhoods, but not because of “sub-prime” lending, but because of people borrowing 100% of their purchase price. That doesn’t put people in a very good position should they need to sell right away, if the market slows and prices dip.
About Beacon Hill, the numbers don’t lie – yes, there was a decrease in sales between last year and this year. Of course, “sales” are the result of properties going “under agreement”, six-to-eight weeks ago. Therefore, to get a a better gauge of the market today, look at what’s going under agreement, now.
There are a lot more properties going under agreement today than six weeks ago. In addition, although Beacon Hill sales may have gone down between last year and this year, South End sales stayed constant, and Back Bay sales actually INCREASED. (I’ll post the numbers, later).
Regarding price changes, it’s true that there were 93 this past week – in the city as a whole (even though the article makes this confusing). However, there were also 259 new listings. Of course, anyone who has had their property on the market at too high a price, or for a long time, will need to reduce their price if there’s more competition. There are more sellers in the spring. The reporter should have checked how long those properties were on the market – if they were on since February or March, then of course they need to lower their prices – they were on the market for too high a price.
I see the number of price changes to be a normal part of the business, and nothing to be concerned about. Go to my website and
look at the absorption rates on the MLS search page. You can see that there is a shortage of available condos, in all price ranges, in just about all the neighborhoods (less than 3 months of supply should be considered a shortage). Basically, anything put on the market will sell, if it’s at least half-decent and steady with what the market will bare (bear?).
I’m skeptical of the guy in the story. Sounds like he’s disgruntled a bit.