Good News for Housing Prices in Metro Boston

The New York Times featured a front page cover story today entitled "Sharp Drop in Home Prices at End of Year." As with many of the recent gloom and doom stories about home prices, this one starts with “Home prices in the United States plunged at the fastest pace on record in December, a sign that housing is likely to continue declining in the months ahead as the economy sinks deeper into recession.”

The story goes on to say that prices in 20 markets dropped 18.5 percent during the past year with all markets showing decline.

That’s enough to give one pause. But as always, the story is more complicated. The story comes complete with a graph that lets you look at the decline in housing prices over the last 12 months for various metro areas. Some places are truly grim with markets like Las Vegas showing a 33% decline year over year.

However, if all politics is local (to quote Tip O’Neill) then all real estate is too. When you look at how Boston is doing, the graph shows that the price drop has been only 7% over the last 12 months. That’s great news for people in Boston and explains why our economy is doing much better than other areas. It also explains why at Red Apple, we’re still seeing strong demand for remodeling and renovations.