"Is Housing Close to a Bottom?"

Maybe I'm just an optimist!

"Is Housing Close to a Bottom?" in BusinessWeek (12/22/08), caught my eye. "After more than two years of sharply falling prices in the U.S., single-family homes in many cities may be selling at or below their 'correct' prices, according to one estimate."

Since the national peak in 2006, home prices adjusted for inflation have declined 27% nationally to an average of $150,040 in the third quarter, according to S&P/Case-Shiller U.S. National Price Index. "However, prices are still dropping (nationally) and the percentage of loans in foreclosure and past due continue to rise."

How does this affect the Cambridge area? Well, the article's chart shows that the median price for a home in Boston is $324,000, which is 16%* BELOW what a home "should be worth, based on supply and demand factors."

What this may do is inspire some confidence in area buyers that this may be a good time to buy. Cambridge prices on average, have stabilized in the past couple of years, although activity (number of sales) is down significantly. There is also talk of interest rates declining to historic lows. This will no doubt revitalize the market except that some buyers will wait to see how low mortgage rates go before making a buying decision, or at least they may wait until they see a house they really like and want to buy.


Businessweek article and slideshow:
http://images.businessweek.com/ss/08/12/1211_numbers/index.htm?chan=magazine+channel_the+business+week


*Calculated by IHS Global Insight and National City Corp.