Group Predicts Boston Price Decline
The Boston.com site is running an article predicting lower home prices. "The gap between income and Massachusetts home prices is the widest since the peak of the 1980s housing bubble, and that gap, intensified by rising interest rates, should cause home prices to dip later this year..declining about 3 percent."
"'It's not going anything like the '80s, but there's going to be a correction,' said Alan Clayton-Matthews, of the University of Massachusetts. 'There has to.'"
Notice the group bases their forecast on the disparity between homes and income, but doesn't see a correction large enough to bring the two measures back into line. One look at the chart that accompanies the piece shows that 3% won't make a dent in affordability.
"Massachusetts' high home prices, nearly double the national median, are a growing concern for economists and policy makers, who worry they are driving young workers and families from the state."
Economist Mark Zandi said, "The housing market is through the roof, way outside anything we've seen historically. The longer it goes on, the more significant a correction we'll see."