bostonbubble.com

[Bluefin38!]

Im not sure about policies that make people poor. The poor will always be poor, and you cant feel bad for them( I am related to some). You should feel for the people made poor. If sales slow and constuction then slowsmany jobs will be in jepordy. We all have neighbors who are electicians, plumbers, mortgage reps, realtors, appraisers, etc.... In many ways we are all in it together, their will be very few winners in this game. The psychological effects could be widespread and severe. It may be possible for the whole country to be made poor together over several years. I beleive that Greenspan knows this, and has been given the green light to through massive amounts of liquidity into the financial markets to prevent a fall. This has been happening since 9/11and the business recession and has contributed to a distorted market. They may be praying for wage inflation to bail out the system, however it does not seem to be happening. Many peole cant understand why the tide has not turned on prices. Is it the liquidity? Only time will tell.

[Guest]

That, "we're all in this together" sh*t is laughable, and yet sadly true at the same time. It should piss you off what these people have done. Yeah, my neighbors are real estate agents, mortgage brokers, plumbers, electricians, appraisers, etc. These are exactly the people that have fanned the flames of the market to drive prices up to the unsustainable levels they've been at for several years now! Have they been in it for me as they've priced me out of the housing market so I'm stuck renting a sub-standard place? NO. Have they (here I'm speaking about the RE agents, brokers, appraisers) been in it for home buyers, who they've been bilking out of money with suspect advice? Again, NO. They have been in it for themselves, trying to squeak out ever larger profits. They, along with the suckers that believe/trust these con artists, have made me "poor" by making my moderate income too little to buy property by long standing economic standards.

Who wants to live in all these crappy, overpriced condo conversions of three-family units that have been destroying the rental stock and driving the price of multi-family properties into the stratosphere? Very few actually want to live in these places, especially once they start having problems with the other two members of the condo association and end up on the wrong end of the stick. Those that do buy these places mostly do it because it's all they can afford now or just plain don't know what kind of mess they're getting into. Who's responsible for these crappy conversions? Why, it's the people you mentioned, that's who. So forgive me if I don't get all teary-eyed if the whole lot of them lose their shirts, but they have it coming in spades. If they haven't taken the money they've squeezed out of the lower and middle classes through this shell game, then they are stupid in addition to being immoral.

And before you say it, I have a decent education and a decent job, so that is not what is holding me back from buying a piece of property. I'm just reticent to overpay for property in this market when the economics do not make sense. Long standing economic rules will continue to apply to the housing market, don't let anyone tell you otherwise. Those that don't learn from history are doomed to repeat it! It's funny how people are only now starting to realize that rates won't stay low forever, realize that ability to "afford" a piece of property is based on monthly payment, and what that means to the market when rates go up. I guess this is how car salesmen exploit suckers too... Bet they wish they'd thought through that whole ARM thing now.

[patb]

Brookline and Back Bay have been communities accessible to rich professionals only for many years. However neighborhoods like Chelsea, Dorchester, Everett and Revere used to be places where ordinary people might be able to afford a home.
It is unnatural and unhealthy for every neighborhood in a city to be affordable only to those who are well to do. Who would work the service jobs, retail, daycare or human services jobs etc?

Many service workers work two or three jobs to feed their families and deserve to have a comfortable home to return to at the end of a long day.

I have been reading that young professionals are leaving Boston in droves, unable to afford homes on their 70K salary. How about the working class who have been priced out of their own neighborhoods? These folks are the heart, soul and backbone of this city and Boston would pretty much shut down without them.

[PAPOS]

Dont worry if housing prices do not collapse soon even the well to do will find themseves in Dorchester. The Price of housing must be affordable by definition. The price of something is based on afforability, if it is not affordable the price is wrong. If the price of the car you drive rose to a level where no one could afford to buy it, the price would have to fall. What is scarry is we have an economy based on lending money to people who think thier car is worth a million dollars and will soon find out it is worth 50 cents on the dollar. That is when Dorchester housing will begin to be in demand.

[AgentGrn]

The price of housing will revert to the trend line one of these days.

For me, it's frustrating since I would like to move into a larger place than the 2br apartment that I share with my wife and newborn son. The rent is good, but mostly due to my commute from Worcester to Woburn on a daily basis. I'd much rather buy a larger place than rent one since my next move will hopefully be a long-term bet.

When I think about how much I can responsibly afford, there is virtually nowhere to buy outside of Worcester. I define "responsibly afford" as something that I don't have to worry about being foreclosed upon if either my wife or I were to lose one of our jobs. (Though she is staying home with my son, currently) We're not even looking for that big of a place either.

I don't mind my drive, but would like to cut my commute by at least 10-20 miles without giving up every cent I make in order to do so.

In the meantime, I'll be one of those buyers on the sidelines, probably for the next couple of years, shuffling money away for a good downpayment.

[leaving boston]

poor man?
rich man?

Whenever I read that the average credit card debt is some crazy number like $6,500, I wonder who would want to keep a $6,500 balance on their credit card. Does that also mean that for every person like me, who keeps a zero balance, there's some other miserable fellow who is drowning in $13,000 worth of debt - yikes!

Does a person like that stand out in the crowd? Do they look poor or do they look rich?

Here's an interesting story. I was working on a condo project, and I was talking to one of the carpenters. He told me that he lived in Bedford, and built his house on a piece of land (which didn't cost much back then). They added some rooms as his family grew. He had a couple boys and a couple girls. As he described his house I started to do the math, 6, 7, 8, ...1M, 1.2M.... I asked him what he was hanging around for and he said, "retirement."

This man will get his union retirement next year, and hopefully he'll pack things up and get out of town.
_________________
every day there's a bubble waiting to pop
every day there's a bubble waiting to form
all you have to do is find where it is

[JCK]

[leaving boston]

JCK, thanks for the link - what an eye opener.

The article gives an interesting statistic that basically says that the bulk of credit card debt is carried by an unfortunate, 10%. Even if that's the case does it take a wreckless few to spoil the economy as a whole?

It seemed like the whole sub-prime statistic are similar. Only a small segment of loans, was sub-prime. But it doesn't take much to swing the economy into a nose dive. Imagine the 500 point drop in the stock market a month ago. That managed to be somewhere about three percent loss. I remember at the peak of the 87-91 recession, the unemployment rate was 8%. None of these seem like big numbers, but I heard how some areas in Boston, the property values dropped 40%.

Anyone remember what happened? Did it drop suddenly? Did it bounce around?