It’s not news to this blog’s readers but …

New York/Boston real estate prices have more to drop, according to the WSJ.

But that doesn’t mean these cities are skirting the worst of the housing bust. Rather, markets where price declines have been slightest may be in worse shape, because prices still have further to fall before enough buyers step in to bring housing activity to normal. Meanwhile, heavy foreclosure activity in hard-hit areas like Phoenix, Las Vegas and San Diego are bringing prices into equilibrium. Those cities may be closer to a turnaround.

In October, single-family-home prices in the New York metropolitan area were down 12% from the all-time high they reached in 2006, according to the S&P/Case-Shiller home-price indexes. That is roughly half the decline registered by the 20-city index and well short of Phoenix’s 41% drop. A separate index of New York-area condo prices was down just 4% from its peak.

Part of the reason New York housing prices have held up is that lot of New Yorkers are holding on to their homes rather than selling for less than the Joneses got last year. Esty Lobovits, a 31-year-old lawyer in Manhattan, has been looking to buy an apartment since the summer but says she isn’t willing to pay what she considers to be inflated prices. Many apartments she has viewed are empty or filled only with staged furniture, and brokers are more aggressive, sometimes following up with her broker even if Ms. Lobovits hasn’t placed a bid.

Although sellers have been open to negotiation, Ms. Lobovits says prices haven’t budged as much as she would expect. About two months ago she looked at a one-bedroom, first-floor apartment for about $700,000, roughly $100,000 more than comparable apartments. “I haven’t seen any steep lowering of prices,” she says. “It’s a little surprising to me that [sellers] wouldn’t want to be more aggressive.”

In the language of Wall Street, with asking prices not dropping to levels where bidders like Ms. Lobovits will pick them, the market isn’t “clearing.” The Federal Reserve Bank of New York noted in its “beige book” survey of regional conditions this month that many would-be buyers have opted to rent out their apartments rather than sell, driving rental prices lower — particularly in higher-end buildings.

While New York is probably an extreme example, its inertia is being repeated in many of the other housing markets that have yet to see sharp declines. Some owners with hefty mortgages can’t face selling their house for less than they owe, but also, many don’t want to sell at a steep discount to what a house down the street might have fetched two years ago.

But in California, housing sales have picked up considerably, as buyers take advantage of foreclosed homes. In October, sales of existing, detached homes was more than double the year-earlier level, according to the California Association of Realtors. In the Los Angeles area, single-family-home prices are 34% below their peak, according to S&P/Case-Shiller, while prices in San Francisco and San Diego are down 36%.

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