Home prices (Boston: for sale, apartment complexes, foreclosures)
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I know prices of homes have been dropping all around the country, but I just read an article that predicts a drop in home prices comparable to the 80's. How does the home buying market look to you all and do you think it will be quite awhile until it levels off? Also, do you think rents will start to drop significantly as home prices get lower? On the positive side, it would make Massachusetts a more affordable place to live and attract more people rather than losing them.
The housing market is predicted to stabilize late this year and maybe start the upward swing in 2008. It is safe to say prices have bottomed out. I still continue to see sellers dropping their price every week, but that is more of an adjustment when they realize they are not going to make the cash they could have 2 years ago. It will take 2-3 years to clear the inventory and for prices to start favoring sellers again (minimally).
MA is definitely more affordable as far as housing goes. I notice it and we bought a nice single family home because of the market conditions right now.
Rents are down- WAY down! Two free months rent and extras is what you will see at many of the apartment complexes.
The difference now between what happened in the 80s is that the job market and stock market is very strong. When it finally rebounds- it will rebound fast. It will take time either way.
The housing market is predicted to stabilize late this year and maybe start the upward swing in 2008. It is safe to say prices have bottomed out. I still continue to see sellers dropping their price every week, but that is more of an adjustment when they realize they are not going to make the cash they could have 2 years ago. It will take 2-3 years to clear the inventory and for prices to start favoring sellers again (minimally).
MA is definitely more affordable as far as housing goes. I notice it and we bought a nice single family home because of the market conditions right now.
Rents are down- WAY down! Two free months rent and extras is what you will see at many of the apartment complexes.
The difference now between what happened in the 80s is that the job market and stock market is very strong. When it finally rebounds- it will rebound fast. It will take time either way.
Did you decide on a town yet?
NY'er
Hi, mind if I ask where rents are WAY down? county or town name please
Hi, mind if I ask where rents are WAY down? county or town name please
Mostly apartment complexes, such as Avalon Bay Communities outside of Boston. You probably won't see as drastic price drops right in the city. But I think landlords are more willing to work with tenants now more than ever. Keep in mind that because of the market we are in, many landlords have lost substantial equity in their properties. Keeping them occupied is more important than ever.
....which prices are down? I am not so sure about rents but trying to buy a house in a nice suburb is VERY expensive. We are relocationg from Northern NJ and are used to high prices and taxes but I did not see any big price drops out there ( I have been looking since November). Yes there is the occasional seller that drops quiet a bit because he has to sell but the majority is holding out. We put in several bids of $50000 to 100000 under asking price (on $600000 houses) and were not even countered. The drops I see are for $10000 and maybe $20000 and with rising interest rates don't make buying a house more affordable. There is also a study out there that says that only a few towns became a little more affordable. The majority is actually becoming harder to afford. The house we are in the process of buying only dropped $9000 and has been on the market since January. I guess MA will stay expensive for now.
There are sooooo many factors/variables. What town? What school district, proximity to Boston etc.
Also- homes are selling here for decent prices. Offering $100K under asking is pretty much ludicrous. 16.6% off asking is probably pushing it too much. As a buyer you should be clever- not clown-like. Sellers will baulk and it sounds like they have already. Keep in mind- it is a buyers market, but there are other buyers out there.
Aren't taxes higher in NJ? And the cost of living has to be fairly comparable from my experience down there...
Last edited by jxu66; 06-09-2007 at 11:10 AM..
Reason: remove commerical info
I wouldn't say prices have "bottomed out" yet, but prices won't drop like they did in the 80's. Some of the drops people see is because owners prices their homes to high to begin with. Rents are down a little and currently you see more vacancies, but home prices being high also make people rent longer or more than some would wish to. Boston will continue to see decent rent prices just because of the college crowd they get from September-May and the overall supply situtation. MA will remain quite expensive and with the "normal" politicians in MA you can bet the state will continue in the wrong direction.
Home prices may drop some, but it is still expensive. Taxes here won't be going down anytime soon and when i read and hear about all the programs and issues the state is having, all i hear next is trying to get money to fund those issues. Even if MA housing gets more affordable i don't see the state turning around. It will still lose people and more importantly companies and jobs.
In my opinion, prices are bottoming or close to bottoming out. Why? Because you see many sellers taking their listings down after being unable to sell for 8 months. When sellers reduce their price as far as they can go (eliminating all equity) they either decide not to sell, or to hold out and let their property roast on the MLS even longer. That is what I would define as 'bottoming out'.
Buyers think too much like buyers. All sellers cannot drop their prices to levels that buyers think they should. Such as mentioned above- making offers $100K below asking. Yes- some sellers are asking too much, but there is a bottom line for them.
Part of the inventory problem we have now is that buyers are watching CNN Money Saturday mornings are hearing 'hold out'- we haven't reached the bottom yet. The grass is greener if you can hold out 2-3 more months. Well guess what? Mortgage rates just jumped up and that realtor friend you have that is telling you to wait 2-3 months is stil going to make money when you buy even though your monthly payment just jumped up $50/month.
The market in the 80s was completely different. Really hard to compare.
I think the FED chief yesterday Ben Bernanke said the housing problems we are having are going to last longer then anticipated. Many other economists see a further drop in home prices nationally- some geographic regions will see bigger drops then others.
Interest rates are rising- many of those 'funky mortgages' set during the boom will have to be reset- with rates rising- many people will be unable to pay- causing more foreclosures and the adding of more homes for sale. Which means added stress on prices.
As for Massachusetts and New England- its a mixed bag- the Boston area has seen the largest correction. But southern Maine, the Providence area, southwestern Connecticut have seen at least a 5% correction in prices. Connecticut outside of Fairfield county and Vermont have dropped less.
The higher end homes in my town have seen drops of $50,000 to $100,000 (original asking and selling prices last year $765,000 -$800,000) the more moderately priced ones haven't seen as big a drop - I would say real drops of 10-15% is the max. I am waiting to see what happens - everyone seems to be holding their breath, if we tip into recession then a house price drop of 20-35% I could see, if things begin to grow again I see this current level holding a while then slow appreciation.
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On the positive side, it would make Massachusetts a more affordable place to live and attract more people rather than losing them.
