By Thomas Grillo
Friday, December 10, 2010
Bucking a national trend amid signs of the region’s improving real estate market, home values in Greater Boston increased by nearly $11 billion in 2010, according to Zillow.com.
“There’s no question that Boston is in a better position relative to the rest of the country,” said Nicolas Retsinas, a senior lecturer in real estate at Harvard Business School. “As the housing market stabilizes, it’s clear that Boston will be out ahead of other major cities.”
Zillow.com, the online real estate marketplace, reported yesterday that U.S. homes are expected to lose $1.7 trillion in value this year as the nation’s housing market continues to slide. New York City saw the biggest decline at $103 billion while Chicago trailed with $48 billion in losses.
But the so-called Boston Metropolitan Statistical Area was one of only two bright spots among the country’s largest regions to see home values increase - $10.8 billion in Boston and $10.2 billion in San Diego.
Robert Murphy, an economist at Boston College, said he was surprised at Zillow’s Boston data, noting that the S&P/Case-Shiller Home Price Index, a measure for the U.S. residential housing market, has reported that home values in Greater Boston have not fallen as far as other areas of the country.
But he said Boston has much going for it, including two industries that have had a big impact on stabilizing the region’s housing and employment sectors - health care and education.
“The state’s unemployment rate is 8 percent, vs. 10 percent nationwide, so we’ve done better in that sense too,” he said.
Still, Murphy noted that while home values may be up this year, they still trail the top of the market. Zillow, in its “Real Estate Market Report,” noted that while Boston-area home values swelled in 2010, the region is still $105 billion down from the peak five years ago.
Timothy Warren, CEO of the Warren Group, a Boston real estate tracker, said it’s unclear what, if any, impact foreclosures have had on home values.
From January through October, there have been 11,334 foreclosures in Massachusetts, up from 7,710 in 2009. But he said median prices for single-family homes have increased year-over-year since July.
“Any downward pressure on median home prices from foreclosures has yet to be felt,” he said. “That could take six months or more.”