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CJ
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 Posted: Fri Aug 08, 2008 7:45 am GMT Post subject: What happened exactly? The MA housing price and rate.... |
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Although MA housing price has been down since 2006, (probably about 20%?), I found it is still about 110% higher than 10 years ago, according to Zillow's Historical Value Trends.
I checked the mortgage rate trends:
http://mortgage-x.com/trends.htm
It was about 7% in 1998; now it's about 6.5%. The rate is pretty close. If the rates are pretty the same, how could the price is 110% higher than 10 years ago?
Of course, I don't expect housing price will go down 50% or more, but even considering the inflation, the 20% lost in recent 2-3 years is nothing.
Any idea? |
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admin
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Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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samz
Joined: 19 Feb 2008
Posts: 102
Location: Medford, MA
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| Posted: Fri Aug 08, 2008 2:40 pm GMT Post subject: Re: What happened exactly? The MA housing price and rate.... |
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| CJ wrote: |
It was about 7% in 1998; now it's about 6.5%. The rate is pretty close. If the rates are pretty the same, how could the price is 110% higher than 10 years ago?
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I've been wondered the same thing.
Here's my question: why should the value of a house go up at all?
Granted, the supply is limited, particularly in older areas like Boston, so you could argue that demand increased while supply stayed the same. But that's dodging the question: why did demand increase? why were people suddenly willing to pay so much more?
House location is clearly a factor, but the location of any specific house doesn't change. And most houses in Boston are pretty old and getting older, and frankly, many are pretty crappy considering the price. As much as I love Boston, it simply doesn't have the climate and natural habitat appeal of, say, California.
I just don't get it -- was the whole thing created by the mere perception that a house is a high-yield, short-term investment? Was the housing bubble nothing more than a giant, economy-killing analogue to the Beanie Babies phenomenon? |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Fri Aug 08, 2008 2:50 pm GMT Post subject: Re: What happened exactly? The MA housing price and rate.... |
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| samz wrote: |
Here's my question: why should the value of a house go up at all?
Granted, the supply is limited, particularly in older areas like Boston, so you could argue that demand increased while supply stayed the same. But that's dodging the question: why did demand increase? why were people suddenly willing to pay so much more?
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Here is the follow-up question to ask when somebody provides an answer tied to demand that sounds plausible: why didn't the increase in demand also drive up rents by the same amount?
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