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Dec 2006 vs 2007 for MA SFH: Warren Group reports nominal pr

 
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Joined: 14 Jul 2007
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Location: Greater Boston

PostPosted: Mon Jan 28, 2008 2:01 pm GMT    Post subject: Dec 2006 vs 2007 for MA SFH: Warren Group reports nominal pr Reply with quote

Use this forum thread to discuss the following link.

Description: Dec 2006 vs 2007 for MA SFH: Warren Group reports nominal price plummet of 10.5%, 23.3% drop in sales; MAR reports nominal price decline of 3.6%, 20.0% drop in sales, states 2007 "was actually pretty good"
URL: http://boston.bizjournals.com/boston/stories/2008/01/28/daily2.html?jst=b_ln_hl
Info/Broken?: http://www.bostonbubble.com/link_info.php?id=1421

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admin
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PostPosted: Mon Jan 28, 2008 2:03 pm GMT    Post subject: Reply with quote

Note: the article doesn't appear to include a December 2006 vs December 2007 comparison from The Massachusetts Association of Realtors. It only gives the numbers for 2006 vs 2007 as a whole. The December comparison referred to above can be found at:

http://www.marealtor.com/content/monthly_reports.htm

- admin
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Shoeshine,
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PostPosted: Mon Jan 28, 2008 4:51 pm GMT    Post subject: Reply with quote

Quote:
Massachusetts Association of Realtors President Susan M. Renfrew.
"When you take a step back and look at the year in historical context,
it was actually pretty good.

Rolling Eyes
Quote:

"This is a 7.9 percent decline from the peak of $375,000 in July-August, 2005,
but a gain of 23.8 percent since 2002,

This just leads me to believe we have much farther and further
to fall for home prices
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admin
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Joined: 14 Jul 2005
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PostPosted: Mon Jan 28, 2008 5:08 pm GMT    Post subject: Reply with quote

In inflation adjusted terms, the December 2007 median was only a whisker above the median for December 2002, as estimated last month. Inflation would account for 17.8% of the nominal increase (they probably got their 23.8% increase from 2002 by comparing with January or the whole year). So there actually isn't much of that 23.8% increase left to eat away, and I wouldn't count on that as a reason to expect more declines. However, the increases in 1999 - 2001 were also very steep, so there is plenty of potential fuel left for the fire from then. If they had used a year earlier than 2002 as their baseline, the nominal gain would have been much higher.

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JCK



Joined: 15 Feb 2007
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PostPosted: Mon Jan 28, 2008 6:37 pm GMT    Post subject: Reply with quote

Shoeshine, wrote:
Quote:
Massachusetts Association of Realtors President Susan M. Renfrew.
"When you take a step back and look at the year in historical context,
it was actually pretty good.

Rolling Eyes
Quote:

"This is a 7.9 percent decline from the peak of $375,000 in July-August, 2005,
but a gain of 23.8 percent since 2002,

This just leads me to believe we have much farther and further
to fall for home prices
Exclamation
'
'
'


If anything, past decreases in price should lead to the opposite conclusion, i.e., that future falls are less likely, rather than more likely.

If we're back to 2002 prices in real terms, that's a pretty big drop. Admin may disagree, but I think at least some of the last 90s/early 2000s rise coming on the heels of 10 years of flat prices was probably long overdue.

So things may be getting pretty close to where they should be. However, that alone doesn't preclude further price drops.
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admin
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PostPosted: Mon Jan 28, 2008 6:46 pm GMT    Post subject: Reply with quote

I think Shoeshine was saying that the fact that prices are still up 23.8% over 2002 means that there is plenty of room left for further declines. That's why I posted my response above - you have to account for inflation when looking at that 23.8%. Once you do so, there isn't that much fat left to trim since 2002, but yes, I would go back further for a baseline.

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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Mon Jan 28, 2008 6:48 pm GMT    Post subject: Reply with quote

admin wrote:
I think Shoeshine was saying that the fact that prices are still up 23.8% over 2002 means that there is plenty of room left for further declines. That's why I posted my response above - you have to account for inflation when looking at that 23.8%. Once you do so, there isn't that much fat left to trim since 2002, but yes, I would go back further for a baseline.

- admin


You of course are correct with respect to Shoeshine's post.

Reasonable minds can differ on where the baseline should be...
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