Well, the Globe writes that there continues to be a lot of downward pressure on housing prices, although calling it a “buyers market” still seems like a stretch to me.
So, on one hand we’ve got burgeoning housing inventories on the market; on the other, the reports issued on Monday regarding the lack of housing. does that mean we can just let the market’s Invisible Hand take care of things? Just wait it out, and prices will come back to earth?
Well, probably not. According to Profs. Bluestone and Glaeser, the volatility of the Massachusetts market is a result of scarcity. We may be hitting a plateau … or just over the top of a roller-coaster ride. Somewhat counterintuitively, increasing housing supply is one way to stabilize the market, making a crash less likely. Bluestone’s PowerPoint presentation states “an increase in housing supply could ‘inoculate’ Massachusetts homeowners against the possibility of a long-term precipitous decline in housing values.“
That’s a tough one for folks to understand — kind of counterintuitive. But there it is.