Wednesday
31Dec2008
Annual Survey: What will housing prices look like in 2009 & beyond?
Wednesday, December 31, 2008 at 1:55PM Keeping an eye on the real estate market in Massachusetts? We'd like to know what you think housing prices will look like in Greater Boston, as well as LOCAL cities and towns across the state, in 2009 and beyond. Click Here to take survey.
Reader Comments (3)
I think we are probably looking at another 5 percent to 10 percent median price decline statewide, but I also think that some communities will do much better than other communities.
Even this year, some municipalities saw a median price increase.
Prices likely will rebound in 2010, 2011 and 2012, but not by too much, probably less than 10 percent over the three years.
Using the LA housing bubble of the late '80's/early '90's as a model, I expect prices to return to where they were right before the bubble began (1998-99) with adjustments made for inflation. That means that we're half-way to the bottom. We have another 20% in price decline to go before we get there. This year and next, $1.6 trillion in Option ARM and Alt-A mortgages come up for rate readjustment nationwide (the subprime bloodbath involved $1 trillion in mortgages) and economists expect 70% of those loans to go into foreclosure. The scale of this is so enormous that it's hard to see how any communities that will come out on the other end of this unscathed. Once we get to the bottom, we're likely to be there for a while, so there won't be much of a need to rush in to snap up deals as the market heads into an upswing.
Prices in MA are still rediculously high and far beyond affordable level.
The median price for a single-family home in September 2008 was $295,000.
The median household income in MA is around $60,000, in Greater Boston - around $64,000.
Finance advicers will tell you that you can SAFELY afford a house that costs no more than 3 times of your annual household income.
Now do the math!
In order to be affordable, prices must fall to the level no more than $200,000 in MA!
What can you buy for $200,000 in MA now?
One bedroom appartment in shitty neighborhood? Dog house? Shed? :)