MIT Professor: Housing prices could decline another 20%

Savings of $100,000 or more on individual home purchases were relatively common across the top 25 most expensive housing markets in Greater Boston in 2006, and according to one MIT professor, savings are likely to continue in 2007.  Professor William C. Wheaton predicts housing prices could decline another 20 percent in Greater Boston and other markets over the next two to three years.  Does that mean that homebuyers in the most expensive communities will see even more price reductions in each of these categories in 2007?

PARTIAL MAP of homes selling for more than $100,000 below their original asking price: (see technical note below)

• Saved $100K to $199K
• Saved $200K to $499K
• Saved $500K to $1 million
• Saved $1mil to $2 million
• Saved $2mil to $3 million
• Saved over $3 million

As sales prices fall, well-informed sellers are could set more realistic prices so the gaps between the original asking price and final sales prices may not be as wide as those recorded in 2006.  We'll continue to map the location of six figure savings, and invite you to do the same on The Real Estate Cafe's award-winning interactive bubble map.  We're so convinced that our clients will save money, we're willing to base part of our compensation on it.  Contact us at 617-661-4046 or RECafe [at] Mac [dot] com for information on our experimental NEW fees and rebates options.

Technical notes:  (1) Savings based on difference between original asking price in MLS versus final sales price.  (2) If property was listed more than once, actual savings may have been greater.  (3) Properties mapped represent a partial sample based on 25 of the most expensive cities and towns outside the City of Boston, and a limited number of months during 2006.  (4) Only homes which sold for BELOW assessed value are mapped, thus many other homes which sold for more than $100,000 below their original asking price are not mapped.  (5) Neither are active listing priced $100,000 below their original asking price, or three classes of properties which failed to sell in 2006:  expired, canceled, or withdrawn listings. 

The Real Estate Cafe provides additional data and research to clients on a fee-for-service basis.