Home prices have peaked (Boston, Newton: sales, 2015, how much)

[Parsec]

Looks like some of the members who were screaming bubble might be right. I just saw the median prices in some of the more expensive suburbs actually saw a slight decline in 2015.

"Concord and Lincoln saw the biggest declines. Concord’s median price fell 4.7 percent to $879,500, while Lincoln was hit with a 7 percent drop, pushing its median price below the $1 million mark to $944,000, according to Warren Group numbers. Lexington’s median fell 1.5 percent to $935,000, while on the South Shore, Cohasset saw a 2.8 percent drop, to $743,500. Sudbury saw a 0.9 percent drop to $680,500, while Sherborn‘s median price edged down 0.2 percent to $743,452. Just north of Boston, Winchester’s median price stayed essentially flat, at $910,000, after edging up 0.5 percent."

"Out on I-495, upscale suburbs Southborough and Harvard saw prices stall out last year. A favorite among well-paid techies, Southborough saw its median price plunge 9.7 percent, to $540,000, its first decline since 2010, Warren Group numbers show."

With the fed slowly starting to raise rates in 2016, should we expect to see even greater price declines as the cost of borrowing increases? Note that more affordable suburbs such as Natick and Arlington have benefited from their wealthier neighbors who saw prices hit stratospheric levels through 2014.

[Shrewsburried]

I can't comment on the metro-west towns, but the inventory along 495 in towns like Bolton, Groton, Harvard, etc. was pretty awful throughout 2015. An "apples-to-Apples" comparison of properties seems to indicate a flattening but not a decline in the 495 towns.

Yes, limited supply should drive up prices ... but only if the properties seem "viable". Peak? I think it's too early to call it.

[MikePRU]

With the exception of Lexington, I can't say that I do a ton of business in any of the other towns you've mentioned. So, I couldn't really say where prices are headed in those towns. However, based on the activity I saw in 2015 I can't fathom that prices decreased in places like Newton/Wellesley/Needham.

The other thing I would say is that it's not always accurate to judge the direction of market values by looking at median sales price. I've seen it happen where prices are headed up in a town but the prior year there was a large amount of upper end homes that sold. So, it looked the values had dropped but in actuality only the median had dropped.

[BostonMike7]

I can't fathom the market is trending down after what I saw end of last year. My target range was $400-500K and there was definitely competition. I lost out on a house that sold for $31K over asking price. Open houses were packed, and most of the nice stuff I looked at went pending within a week of an open house.

This was inside 495 though, down by 128

Really doesn't matter to me now since I bought my home for long-term.

[Shrewsburried]

Originally Posted by MikePRU

The other thing I would say is that it's not always accurate to judge the direction of market values by looking at median sales price. I've seen it happen where prices are headed up in a town but the prior year there was a large amount of upper end homes that sold. So, it looked the values had dropped but in actuality only the median had dropped.

This is what I've seen over the past 12-16 months in the 495 belt. Median price being dragged down by a number of estate sales - failed septic, pink bathrooms, 30 year old roofs, etc. Well maintained/updated properties in the 300-450k range are still selling briskly.

[sawyer2]

Wonder how much noise there is in median given relatively low sales #'s.

Will be interesting to see how things fare when spring market hits - still looks to be low inventory/high demand in towns with good schools and decent access to Boston....and interest rates may not be at the bottom but still very low.

[Parsec]

I meant home prices may have peaked at the high end of the market. There's only so many people who can afford a $1M home (unless we get a huge influx of GE executives, for example ).

[G-fused]

Originally Posted by Parsec

There's only so many people who can afford a $1M home

It seems that here, there is an incredibly unfathomable number of people who can go $1M and up. It's bizarre.

[mmyk72]

As of late 2015, I noticed that for homes in the 'affordable' price range (400-600K) in the handful of sought after towns, there are still more buyers than available properties. Buyers were competing fiercely with multiple offers above the asking price. I don't see how this all would change in the last few months given there hasn't been anything substantially diff in our economy.

As long as there are buyers willing to pay, there is no reason that prices will decline. I don't trust people drawing broad conclusions from statistical summaries.

[Ninotchka P]

Originally Posted by Parsec

I meant home prices may have peaked at the high end of the market. There's only so many people who can afford a $1M home (unless we get a huge influx of GE executives, for example ).

This, I feel, is wishful thinking. There are more than enough to keep competition stiff in our low inventory area.