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December 09, 2005

Sharp price reductions point to hard landing for Boston Housing Market

NEWS FLASH:  Watch for more analysis and graphs of data behind the headline story in upcoming blog posts.  Should we host a Boston Realty Party -- online or in person?  -- to celebrate the end of the real estate bubble and the beginning of the first buyers' market in more than a decade in Boston?

Sellers chop asking prices as housing market slows
Cuts of up to 20% are now common as analysts see signs of a 'hard landing'
By Kimberly Blanton, Boston Globe Staff  |  December 9, 2005

''The evidence -- both early data and the anecdotes -- are pointing more toward a hard rather than a soft landing" in the housing market, said Nicholas Perna, an economic consultant in Ridgefield, Conn. ''Prices could come down. Could it be 10 to 15 percent? There's no way of knowing, but what we're getting is more clues that you've got a decline in prices underway.

Some of research conducted by The Real Estate Cafe was featured prominently in the article, although the contribution made via an interview with one of our buyers was less obvious:

Moderately priced homes are feeling the brunt of the price squeeze, according to an analysis of MLS listing data by Cambridge broker Bill Wendel.

Statewide, 38,418 houses had priced reductions between Jan. 1 and Nov. 24, or 22 percent more than the number of reductions during the same period in 2004. But the number of price reductions on homes between $500,000 and $1 million increased by 36 percent. One price segment that ''jumps off the page as soft," said Wendel, is the $500,000 to $600,000 price range, the fourth most active segment of the single-family housing market. It had 1,258 more markdowns, up 40 percent from last year.

The Boston Globe has aggregated some of their recent stories on the changing market into this Special Section online.  Now you can see why The Real Estate Cafe wants to throw a Boston Realty Party, on December 16, the 232 anniversary of the Boston Tea Party, for homebuyers to celebrate the end of the real estate bubble and the beginning of the new buyer's market!  Let us know if you'd be interested in participating online or in person in the Boston area.

Bill Wendel | 08:50 AM in In the News, Market trends, Real Estate Bubble, Timing the market | Permalink


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About the Boston Realty Party:

A bit of background: we've been looking on and off for a house / condo for the last 5 years. We finally gave up when we decided / admitted there was a bubble about a year ago (or, more accurately, when we admitted that we wouldn't be able to profit off the bubble given our risk tolerance).

You note that this may be the beginning of a buyer's market. I'm hoping you're right.

One of the things that I'm worried about is that there are a lot of people like us out there. People who've had their rents stay the same, or decline (as much as 25% for some of our friends). People still sitting on a downpayment, waiting for the bubble to burst before buying a house.

I'm worried that once the bubble is declared to be burst, all the people who have been patiently waiting these last few years will come out of the woodwork, and prices won't fall as much as expected.


Posted by: Nick | Dec 15, 2005 2:49:50 PM

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