Tue, December 28, 2010
Housing Markets Still Look Weak In Boston and Rest Of Nation
The Case-Shiller Index, the leading benchmark for housing prices, today reported new data updated through October and the news is less than cheerful. Boston housing prices showed a slight year-over-year decline, and several major housing markets slipped to price levels last experienced in spring of 2009.
The Standard and Poor’s/Case-Shiller home price index, which examines the prices of single-family houses that have sold at least twice, is widely regarded as the most significant index of prices in the nation’s major housing markets. Boston metro area prices fell 1.2 percent from September to October and 0.2 percent vs. October 2010 according to the latest Index results, while for the nation as a whole, average U.S. housing prices are at mid-2003 levels.
In six metro areas – Atlanta, Charlotte, Miami, Portland, OR, Seattle, and Tampa – prices have slipped beyond the lows last seen two-and-a-half years ago. Despite the boost provided by tax incentives that extended into the first half of 2010, the index indicates that home prices nationwide have slipped. David Blitzer, chairman of the Index Committee, further noted that “While delinquency rates have seen some recent improvement, it is only on a relative basis. They are still above their historic averages, in both the prime and sub-prime markets.”
Interestingly, the six cities where prices are experiencing a “double-dip” are mostly outside the “sand states” where foreclosure rates were the highest in the most recent housing bust.
Current Boston-area housing price levels are comparable to those of late summer, 2009. Average Hub housing prices strengthened in the first half of 2010 but began slumping within a month or two of April, the month when purchase contracts had to be in place in order to qualify for Federal homebuyer tax credits.
Since housing market behavior is intensely local, the composite results for the Boston metro area obscure the fact that some housing sub-markets have performed significantly better or worse than 0.2% vs. last year. The softening market has left many potential homebuyers wondering whether they should actually take the plunge or wait.
On the bright side, Boston’s housing market is nowhere near the worst – that honor belongs to Chicago, where single-family housing prices averaged a decline of 6.5% versus October 2009.