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Q1 Real Estate Trends: Boston Slumps, New York Hangs Strong

The first quarter is typically a low-volume period in both the real estate and rentals market, and lower prices are associated with this slow period in the housing cycle. The Boston market, which has seen continued price deflation, is a great example of this dynamic.

In the first quarter of 2007, real estate prices in Boston came down by approximately 10% from where they started. Average rental prices slipped by roughly the same percentage. The price drop in the two-bedroom sector of the Boston housing market (plotted below) was even more pronounced, with average rental prices down to $1,950, from $2,560, and real estate prices falling from $380,000 to $350,000. This softening of the housing market is visible around the country in other top markets, including Chicago, Philadelphia, Seattle, and Phoenix.

New York, Los Angeles and San Francisco represent the few strong markets that have managed to buck this trend and show surprising strength in Real Estate pricing. Overall real estate prices in New York City were up around 7%. Prices in the two-bedroom real estate sector in NYC (shown below) climbed from $570,000 to just over $600,000. Overall rental rates did fall, but more moderately than those in Boston (dropping just 4% at the end of the quarter). The two-bedroom rental rates were up slightly $3,220 to $3,420, again contrary to expectations.

Prices for a 2 bedroom apartment and home in Boston v. New York

Q1 Boston Housing Trends
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