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How will Newton prices change in 2009?
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How will the nominal median single family home price change in 2009 for Newton, Massachusetts?
Down more than 15%
9%
 9%  [ 1 ]
Down 10 - 15%
18%
 18%  [ 2 ]
Down 5 - 10%
45%
 45%  [ 5 ]
Down 0 - 5%
18%
 18%  [ 2 ]
Up 0 - 5%
9%
 9%  [ 1 ]
Up 5 - 10%
0%
 0%  [ 0 ]
Up 10 - 15%
0%
 0%  [ 0 ]
Up more than 15%
0%
 0%  [ 0 ]
Total Votes : 11

Author Message
admin
Site Admin


Joined: 14 Jul 2005
Posts: 1824
Location: Greater Boston

PostPosted: Fri Feb 13, 2009 5:01 am GMT    Post subject: How will Newton prices change in 2009? Reply with quote

In the discussion of towns which some perceive as immune to housing price corrections, one Boston area town of frequent interest is Newton. Please cast your vote in the poll on this page as to how you think prices in Newton will change in 2009. For the sake of having a consistent benchmark, predictions will be judged against the nominal change in the yearly median published by The Warren Group. Do bear in mind that the median is an imperfect measure of value.

Note that you must be logged in to vote in the poll. However, you are welcome to discuss Newton real estate in this thread regardless of whether or not you have signed up for an account.

To aid the discussion and your poll sections, a wealth of information about Newton, including household income distribution, can be found at: http://www.city-data.com/city/Newton-Massachusetts.html

I have also produced two charts which provide historical context for housing prices in Newton. The first chart shows the nominal median price for single family homes in Newton for each year from 1988 - 2008 inclusive:



The second chart adjusts the median price for inflation. It also adds the S&P/Case-Shiller Index for Boston (BOXR) as well as the High Tier Case-Shiller Boston Index, both adjusted for inflation. All points are presented as a percentage of the average for their series. The label for each year is centered on the middle of that year:



Please cross-check for yourself any data that you find useful. The references used in the construction of the charts are:



- admin
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Brian C



Joined: 13 Feb 2009
Posts: 98

PostPosted: Fri Feb 13, 2009 3:13 pm GMT    Post subject: Reply with quote

Median household income in 2007: $110,885
Median house or condo value in 2007: $696,400
Ratio = 6.2x

Median household income in 2000: $86,052
Median house or condo value in 2000: $416,600
Ratio = 4.8x

Lets say the people of Newton get realistic and spend 5.5x their income on housing next year, then the median would be $609,867 or a 12% drop.

With Jumbo-loan availability low and rates high, I think this is the year for correction.
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BelmontRenter



Joined: 29 Dec 2008
Posts: 52

PostPosted: Fri Feb 13, 2009 3:55 pm GMT    Post subject: So here's a new listing in Newton Reply with quote

MLS # 70867421

Certainly one of the "less nice" areas of Newton (we took a few looks at a home in that neighborhood last year, that ultimately was pulled from the market).

Listed at $839,000. Easily $100K overpriced??
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jad
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PostPosted: Fri Feb 13, 2009 4:37 pm GMT    Post subject: Reply with quote

Yeah, I don't know why you pay $839K for that home when you could pay $829k for MLS 70868662 or $899k for MLS 70868941. That home should sit on the market forever at $839k.
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samz



Joined: 19 Feb 2008
Posts: 102
Location: Medford, MA

PostPosted: Sat Feb 14, 2009 3:22 am GMT    Post subject: Reply with quote

I looked over the history of MLS#70867421 -- the current owners have been there a long time, but it looks like they've pulled a heck-of-a-lot of cash out of that place. I think they are screwed.

On a side note: I wouldn't mind seeing versions of those graphs with the Y axis starting at zero -- I find it a lot easier to gauge the magnitude of the changes.
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1824
Location: Greater Boston

PostPosted: Sat Feb 14, 2009 4:35 pm GMT    Post subject: Reply with quote

samz wrote:

On a side note: I wouldn't mind seeing versions of those graphs with the Y axis starting at zero -- I find it a lot easier to gauge the magnitude of the changes.


Here you go.

- admin



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BelmontRenter



Joined: 29 Dec 2008
Posts: 52

PostPosted: Sat Feb 14, 2009 9:23 pm GMT    Post subject: Reply with quote

samz wrote:
I looked over the history of MLS#70867421 -- the current owners have been there a long time, but it looks like they've pulled a heck-of-a-lot of cash out of that place. I think they are screwed.

On a side note: I wouldn't mind seeing versions of those graphs with the Y axis starting at zero -- I find it a lot easier to gauge the magnitude of the changes.


Samz which site(s) did you use to get that info? Thanks!
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Sun Feb 15, 2009 6:23 am GMT    Post subject: Reply with quote

I don't know if you guys noticed, but Newton is starting to show some improvement. It was looking hopeless in 2007 and 2008. Now you can find newish houses (<25 years) with 2000+ sq ft and 3-4 bedrooms selling for $550k - $650k. Its still overpriced but at least there's light at the end of this tunnel. Maybe in a year it will be more like $450k - $550k, which would be consistent with just Boston's historical high cost of living (~5x income), though by no means value Razz
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samz



Joined: 19 Feb 2008
Posts: 102
Location: Medford, MA

PostPosted: Sun Feb 15, 2009 9:59 pm GMT    Post subject: Reply with quote

admin wrote:
samz wrote:

On a side note: I wouldn't mind seeing versions of those graphs with the Y axis starting at zero -- I find it a lot easier to gauge the magnitude of the changes.


Here you go.

- admin



Thanks -- it's still a pretty steep curve!
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samz



Joined: 19 Feb 2008
Posts: 102
Location: Medford, MA

PostPosted: Sun Feb 15, 2009 10:13 pm GMT    Post subject: Reply with quote

BelmontRenter wrote:
samz wrote:
I looked over the history of MLS#70867421 -- the current owners have been there a long time, but it looks like they've pulled a heck-of-a-lot of cash out of that place. I think they are screwed.

On a side note: I wouldn't mind seeing versions of those graphs with the Y axis starting at zero -- I find it a lot easier to gauge the magnitude of the changes.


Samz which site(s) did you use to get that info? Thanks!


If you haven't seen it yet, you must check out this site:

www.masslandrecords.com

All land-related transactions are a matter of public record, and you can use this site to search the database in lots of different ways.

It's actually a little scary, from a privacy standpoint -- the database includes scanned images of the actual mortgage (or lien or whatever) documents.

Also, I gotta say I love the picture of the Secretary of the Commonwealth -- he's got a creepy smirk on his face that says "I know *everything* about you!"
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Phil O. Math
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PostPosted: Mon Feb 16, 2009 3:25 pm GMT    Post subject: poll Reply with quote

My vote is for down 10%+.
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Tue Feb 17, 2009 2:20 pm GMT    Post subject: Reply with quote

Voted for 5-10% down. Even if the analysis is correct that Newton is "in need of" a 10%+ drop to bring prices back into historical equilibrium, I don't think it's necessarily all going to happen in a single year. (It took more than one year for things to get out of whack in the first place...)
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Hard Rain
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PostPosted: Wed Feb 18, 2009 10:35 pm GMT    Post subject: Reply with quote

5%? 10%? ...folks what part of depression do you not understand. 1990's prices are a given, prices have risen 70% in Newton in just ten years, what makes you believe prices won't revert to norm and then some....
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Wed Feb 18, 2009 10:47 pm GMT    Post subject: Reply with quote

You're right, but when you talk about reverting back to the norm, you're talking about elastic properties.

When you look at the stretching of the M3 money supply since 1990, you can say that lots of that liquidity will bubble away, but that's double the money supply in ten years, don't you think that we're talking some sort of deformation of the norms and fundamentals?

http://en.wikipedia.org/wiki/File:Components_of_the_United_States_money_supply2.svg


I think we past the ultimate strength and we've fractured fundamentals:

http://en.wikipedia.org/wiki/File:Stress_Strain_Ductile_Material.png

In place of Depression, we've recast the money supply and redistributed some wealth and changed the properties of the market so much that we'll see a significant reevaluation of currencies. You can make changes to get to equilibrium by adding elements to balance the equation. This will be like a drug, and when people get off the drug they'll get the stress of the addiction again and we'll be right back at it. Hopefully, when Obama means "Age of Responsibility" he means that we need to go cold turkey and getting back to the industrious values and get off of this materialistic borrowing delusion.

I think the natural course of events align with what you described, but we're talking massive government intervention...
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Hard Rain
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PostPosted: Thu Feb 19, 2009 12:53 am GMT    Post subject: Reply with quote

John,

"I think the natural course of events align with what you described, but we're talking massive government intervention..."


“U.S. homeowners lost an estimated $3.3 trillion in house value last year, real estate valuation service Zillow said.”


From the HBB :

"Does Obama really think that somehow $75 billion is going to register even a blip on the radar? Or is he intentionally wasting $75 billion knowing that it won’t make a damned bit of difference?

I think he’s too smart to believe the former, so the latter means that he is merely corrupt, not stupid."[/quote]
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