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Time to worry about home prices

Posted by Scott Van Voorhis July 23, 2013 07:53 AM

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This morning arrives with fresh warnings that home prices in Greater Boston and across Massachusetts are poised to spiral out of control again.

Greater Boston home and condo prices rose 5.7 percent in June compared to the same month the year before, Zillow reports.

Yes, perpetually hot markets like Cambridge and Brookline led the way with double-digit increases of 11.7 and 12.2 percent respectively, not to mention Arlington (7.3 percent) and Newton (5.2 percent).

Yet price hikes are also starting to hit the more middling towns as well, including Medford, which saw a 7.3 percent increase to $359,400 and Malden, where prices rose 5.5 percent to $289,600, according to Zillow.

Framingham home and condo values are now above $300,000 again, thanks to a roughly 5 percent jump in June.

Overall, the median price for a single-family home here in the Bay State hit an alarming $350,000 this June, The Warren Group reports this morning.

It's a whopping 9 percent increase over last June. In fact last time we saw the median home price in Massachusetts hit $350,000 was back in June 2007.

That's significant, coming before the Great Recession ripped the bottom out of the real estate market

Yes, the Fed, with its vast monetary manipulations, is bankrolling the housing recovery by subsidizing what are still rock-bottom interest rates, even in the 4s.

That said, while Greater Boston is packed with lots of very smart people, we are incredibly dense when it comes to understanding the dynamics behind our perpetually price-inflated home and condo market.

Supply and demand have been out of whack now for decades in Massachusetts, especially within the I-495 beltway, with anemic numbers of new homes and condos built, year after year.

No wonder prices are escalating so rapidly.

That's my take. What's yours?

This blog is not written or edited by or the Boston Globe.
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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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