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December 30, 2005
Boston housing market 2006: "Hard landing" or "return to normalcy"?
Three weeks after economist Nicholas Perna told the Boston Globe that "both early data and the anecdotes -- are pointing more toward a hard rather than a soft landing" for the [Massachusetts] housing market, Perna repeated that assessment in the Boston Herald following news that single-family home sales fell 9.2 percent in November. Need to confirm, but isn't that the four month this year of near double-digit decreases compared to 2004?
"It sounds more and more like the housing adjustment is a harder landing in Massachusetts than elsewhere in the country,' said economist Nicholas Perna. 'I don’t think we are seeing anything like that in the country as a whole. My guess is that Massachusetts is among the most seriously affected."
Some real estate professionals dismissed the significance of falling sales, calling them a "return to normalcy." What's your take? Your comments are welcome below, or on our readers' "record your own podcast" line: 617-876-2117.
Quick overview of November housing statistics from the Boston Globe:
November home sales off sharply
"The median condo price slid 2.3 percent to $265,000 in November from October. That's about the same as it was in November 2004.
Sales of single-family homes fell 9.2 percent in November compared to a year ago, the second consecutive steep monthly decline.
The Massachusetts Association of Realtors, in its November report on the state's housing market, said yesterday that 3,713 single-family home sales closed, down from 4,089 in November last year.
Despite the decline, the median price ROSE (emphasis added) modestly, to $354,000 last month. That's 1.7 percent higher than in October and 2.3 percent above November 2004."
Single family housing prices may have risen slightly last month, but this graph of real estate cycles over the past 30 years in Boston, created by Douglas McCarroll, one of The Real Estate Cafe's fee-for-service buyer agent / real estate consultants, gives some context for predictions that the Boston housing market is merely returning to "normalcy."
Bill Wendel | 07:49 PM in Housing forecasts, In the News, Market trends, Price trends, Real Estate Bubble | Permalink
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I would expect the housing market to seriously decline when the population is bailing out. The Soviet Socialist Republic of Massachusetts lost an estimated 8600 residents from July, 2004 to July, 2005, the numbers post July, 2005 aren't in yet but I would imagine they'll be higher still.
Many residents of Mass are fed up with the socialist mis-management from Beacon Hill and are tired of fighting it so they are leaving. Massachusetts primary problem is the entrenched democrat political machine and the commonwealth will not begin to solve the causes of it's outmigration until true two party politics return to the state - remember diversity of view - two heads are better than one and all that.
As for myself - I already left.
Posted by: Gone | Jan 2, 2006 12:00:28 PM
We will have to argue this point for the downtown marketplace. Like other areas of the country...people & their reports are not getting "local" enough. In our opinion they are comparing apples and oranges. The demographic profile, inventory & price point is dramatically differnt from the downtown marketplace and the non-downtown marketplace (or massachusetts as a whole). Actual the '05 sales stats were almost the same for the record setting '04. The lack of inventory plus the demographic shift of both empty nesters & young professionals wanting to live in a vibrant - condo oriented - lifestyle community - Boston! For more information you can download the '05 market report we have on our site (thanks to Otis & Ahearn). To view our site please visit www.condoDomain.com
Posted by: T Longo - condoDomain.com | Jan 18, 2006 10:31:11 AM
I am 25 and I am in the single family housing market, i don't want to settle for a condo. I'm looking in the 128 belt area north of the Mass Pike. Single family homes in bad shape are on the market for $430,000 and would need 50 grand in improvements for me to want to live there. I make a little over 100,000 per year and I would like to buy at a resonable price, however, this is crazy. I'll keep renting and invest in something else. Or I will move to somewhere where the housing prices aren't ridiculously expensive.
Posted by: gw | Mar 13, 2006 11:21:38 PM
GW,
Real estate in Greater Boston can be quite seasonal, and right now sellers have their fingers crossed for a Spring market strong enough to work off the excess inventory from last year. Odds are that won't happen so watch for a record number of expired listings by mid summer, and serious price reductions beginning at the end of October.
Between now and then, you're welcome to participate in our Bubble Hours, and your comments from the field are always welcome. On behalf of all our readers, thanks for taking time to share your perspective.
Posted by: RealEstateCafe | Mar 14, 2006 12:09:34 AM
If GW is still reading this, I'd love to tell him/her about my house. We're trying to sell, and our house is the cheapest in town at 280K, appliances included, and no upcoming repairs needed that we know of. (Newer hot water heater, newer furnace, new piping, vinyl siding, 10 yr or so roof with no issues that we know of...) And we're about a 40 minute drive to Boston on the Pike.
There are still bargains out here... you just have to find us.
Posted by: Amy | Apr 29, 2006 1:43:55 PM
Amy,
Thanks for your comment. If you have a listing agent, can you post a link to the MLS number / Realtor.com ad. If you are selling on your own, can you post your web site, Craigslist ad, or any other contact information?
If you are selling "for sale by owner," would you be interested in participating in an occasion online chat, or small group meeting, with a FSBO Support Group? Sellers are experimenting with a variety of things to expedite their sales process, and we'd appreciate the opportunity to identify more ways they can sell ASAP.
Posted by: RealEstateCafe | Apr 30, 2006 10:38:42 AM
Sure! My MLS is:
MLS ID#: 70296006
The realtor.com link is -really- long, so I figured I'd just post the MLS. I'm not doing FSBO, but I have an advanced degree in PR and have taken a more aggressive role in selling my house than most people with realtors do. I'd be happy to participate.
Posted by: Amy | Apr 30, 2006 4:30:06 PM
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