Boston Foreclosures Pushed Discounts on 35 Percent of Lists

by Peter Vernon on cities

Boston foreclosures pushed home prices down and drove the city to become third in a ranking of U.S. cities with the biggest percentage of homes sold with price discounts as of the start of December, based on listings tracked by a real estate research company.

Home price discounts were reported on about 35 percent of all properties on home listings in the area. The average price discount experienced by all listings tracked was 8 percent, with total asking prices reduced by about $37.7 million in the most recent sales.

Nationwide, the prices of 22 percent of houses for sale had been reduced by an average of 12 percent, with Minneapolis having the biggest percentage of listings with price discounts.

The real estate company also reported that luxury houses priced above $2 million were sold with an average discount of 14 percent, higher than the 10-percent average discount for homes priced below $2 million.

Luxury homes priced above $2 million comprised only two percent of all home listings tracked by the research firm, but they made up 26 percent of total price reductions which has reached $24.7 billion.

Another report from Moody’s Economy.com also showed the downward pressure of Boston foreclosures on home prices. Economy.com predicted that in the next few years, home prices will continue to fall and that millions of households will become underwater.

Economy.com estimated that the median house price in Boston in the last quarter this year would be $309,000 and that it would bottom next year in the fourth quarter at $303,000. Nationwide, the report estimated that the median sales price in the last quarter would be $159,000, a drop from the $170,000 median in the previous quarter. It also predicted that the median home sales price will bottom at $146,500 next year in the third quarter.

In contrast, however, a report from another real estate consulting firm stated that Boston performed best among all cities in preserving residential property values. This report said that Boston gained a total of $23 billion in home values, a sharp contrast to the overall loss of nearly $500 billion in home values across the U.S. in 2009.

The report added that Boston was one among only 48 metro-area markets that posted gains in home values out of a total of 154 metropolitan markets tracked this year.

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