Monday, September 27, 2010

Beantown Bust: Boston Home Sales and Prices August 2010

This week, the Massachusetts Association of Realtors (MAR) will release their Existing Home Sales Report for August showing that single family homes sales increased just 3.1% on a month-to-month basis from July (a slight reprieve from the hideous 38% collapse seen from June to July) leaving sales 18.35% below the level seen in August 2009.

Similarly, condos bounced up 13.2% in August from July after a collapse which saw sales plummet 42.9% between June and July.

The single family median home value increased 4.8% on a year-over-year basis to $330,000 while condo median prices increased 9.2% to $304,700.

Obviously the government's sham tax gimmick worked to drive sales this spring and further, in the absence of this scam, scores of hapless Bostonians have crept back to the sidelines all downhearted, empty pockets... no deposit... no government freebie... no phony baloney house purchase.

Where the trends will go from here should be pretty obvious... back to the weak "organic" trend that preceded the government's malfeasance... subdued home sales and lower prices.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the normalized price movement, annual and peak percentage changes to the Boston CSI home price index from the 80s-90s housing bust to today’s bust.

The “normalized” chart compares the normalized Boston price index from the peak of the 80s-90s bust to the peak of today’s bust.

The “peak” chart compares the percentage change, comparing monthly Boston index values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As in months past, be on the lookout for the inflation adjusted charts produced by for an even more accurate "real" view of the current home price movement.