Housing Prices in NYC, Boston Could Have More Room to Fall -WSJ
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Featured as the headline article this morning, the Wall Street Journal is running a story considering the possibility that housing prices in New York City, Boston and Charlotte may have much more room to fall.
The article postulates that while prices in these large cities have moved lower, the decline has been minimal when compared to other large cities. For example, according to WSJ data, single-family-home prices in NYC during October were down only 12% from the 2006 peak, about half the decline recorded by the 20 cities included in the S&P/Case-Shiller home-price index, and much better than the 41% decline in Phoenix. Further, another data point shows that condo prices in the New York-area are down only 4% from the '06 peak.
The logic behind the argument is that sellers in these areas have not yet slashed prices enough for bargain hunters to come in and pick up the properties as a value bet. The WSJ believes that this is happening because many potential sellers are not willing to sell "for less than than the Joneses got last year."
Concluding the story, the article notes that the last housing correction sunk NYC prices by about 15% at its trough, but also warns that this decline could be "far more severe" given the depths of the sub-prime mess.
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