Stan Humphries of Zillow spoke with the Boston Business Journal about the housing market.
Thomas Grillo
Real Estate Editor- Boston Business Journal
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Stan Humphries, Zillow’s chief economist, is responsible for research and determining the meaning of housing data they collect. He helped create the Zillow Home Value Index. The former Peace Corps volunteer who taught high school in the West African country of Benin, talked with real estate editor Thomas Grillo about where the market is headed, why home sales have fallen and what the lack of inventory means.
BBJ: Where are home values headed over the next year?
SH: Greater Boston values will be flat. Our forecast for the city of Boston is values will rise by 8.5 percent.
BBJ: Why the dramatic difference between the city of Boston and the suburbs?
SH: It’s a pattern that’s been replicated in many other metro areas, where the periphery of the metropolitan region has suffered greater housing declines in home values than the urban core. And now that things have bottomed, there’s a huge reset in home prices. For Greater Boston, home prices are down about 15 percent from the peak in late 2005. People who couldn’t afford to live closer in, can now do so. And you’re seeing demand return much more quickly to the closer in, urban neighborhoods where prices are rising.
BBJ: Isn’t being down from the peak a good thing if you’re looking for a home to buy?
SH: It is interesting philosophically how real estate is written about. It’s usually written that price appreciation is a good thing, which is so odd, because it’s the only consumption good in which we say rising prices are great. If TVs, cars, or gas gets more expensive, you would never write about it that way. I guess since 65 percent of us own a home, we want prices to rise, which is still odd, since if you sell, you probably have to buy another home anyway.
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