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Boston Bubble Brief: The Real Story for MA - Mar 2009

 
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admin
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PostPosted: Fri May 01, 2009 2:09 am GMT    Post subject: Boston Bubble Brief: The Real Story for MA - Mar 2009 Reply with quote

This is a brief report on what the data for the housing market in Massachusetts looks like in real terms. Market data is typically reported in nominal terms which can be misleading because it combines changes in housing values with changes in the value of the dollar. Correcting for inflation removes changes in the dollar as a factor and gives a more accurate picture of how housing values have changed. This report is based on the published data of the Massachusetts Association of Realtors, though it should be noted that the S&P/Case-Shiller Index is a superior data source.

The Massachusetts Association of Realtors released their data for March 2009 on Tuesday, April 29th. While the raw prices were provided in nominal terms, for this report they have been adjusted for inflation using the CPI Northeast Urban numbers available at http://www.bls.gov/cpi/ Adjusting for inflation produced the data represented by the graphs below. Prices for January 2003 and earlier have been estimated by applying the earliest reported median from The MAR, February 2003, against the S&P/Case-Shiller Index for the Boston area. Suggestions for improving this estimate are welcome.

Full Price History



Change in Median Price From One Year Earlier, February 2004 - March 2009

Seasonal variations are removed by comparing prices from the same month in the prior year.



Some observations:

  • The real decline from March 2008 to March 2009 was 19.18%. This was yet another all time record for the period covered.
  • The year over year decline in March was once again to below the normal range. The rate of decline continues to deepen.
  • Real prices are once again lower than the same month in any other year in the time period covered by The MAR.
  • Prices are now 38.11% below the peak set in June 2005. This is the result of a 31.77% decline in nominal housing prices and a 9.29% decline in the purchasing power of the dollar.
  • The cumulative price decline from the beginning (Feb 2003) is 23.20%, which is an annualized decline of 4.25%.


The S&P/Case-Shiller Index for Boston is likely superior to the data above as it corrects for many flaws that are inherent when using only the median price. The S&P/Case-Shiller Index also has the advantage that futures contracts can be traded against it, thereby offering an unbiased insight into where housing prices are expected to be in the future. It also has more extensive historical data available. The MAR data was used for this report mainly out of inertia and might be replaced with the S&P/Case-Shiller Index in future reports.

As usual, please do try this at home. Double checking of the math used to construct the above graphs and analysis is strongly encouraged in order to help ferret out any errors. The data was derived from the following sources:

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The latest version of this report can be found at http://www.bostonbubble.com/latest.php?id=ma_inflation

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nickbp



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PostPosted: Fri May 01, 2009 4:10 pm GMT    Post subject: Reply with quote

Do you have a spreadsheet containing the sales/pricing numbers published by the MAR? Their current method of "lets throw out an unparsable PDF every month" isn't conducive to easy charting.
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PostPosted: Fri May 01, 2009 5:43 pm GMT    Post subject: Reply with quote

nickbp wrote:
Do you have a spreadsheet containing the sales/pricing numbers published by the MAR? Their current method of "lets throw out an unparsable PDF every month" isn't conducive to easy charting.


I do have a spreadsheet for SFH pricing (not sales), and I would like to post it, but I don't want to run afoul of their copyright by republishing their data without explicit permission. I'm probably just being paranoid, but I'd rather play it safe. It's not as bad as it seems to just enter it all by hand into a spreadsheet - I just put on a good CD and had a glass of wine one night when I did it originally.

Fortunately, the S&P/Case-Shiller data is directly available in spreadsheet form. The S&P/Case-Shiller Index is preferable to the MAR numbers for many reasons, so you may want to just use that. The only disadvantage, assuming you are interested in Greater Boston and not all of Massachusetts, is the extra one month lag.

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nickbp



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PostPosted: Fri May 01, 2009 9:04 pm GMT    Post subject: Reply with quote

admin wrote:
I do have a spreadsheet for SFH pricing (not sales), and I would like to post it, but I don't want to run afoul of their copyright by republishing their data without explicit permission.


You might have something to worry about if you were just redistributing their PDFs, but you can't copyright a fact.
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JCK



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PostPosted: Fri May 01, 2009 9:06 pm GMT    Post subject: Reply with quote

Yeah, the numbers themselves are subject to copyright.
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JCK



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PostPosted: Fri May 01, 2009 9:06 pm GMT    Post subject: Reply with quote

JCK wrote:
Yeah, the numbers themselves are subject to copyright.


Ummm, I mean are NOT subject to copyright.
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admin
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PostPosted: Fri May 01, 2009 11:05 pm GMT    Post subject: Reply with quote

nickbp wrote:
admin wrote:
I do have a spreadsheet for SFH pricing (not sales), and I would like to post it, but I don't want to run afoul of their copyright by republishing their data without explicit permission.


You might have something to worry about if you were just redistributing their PDFs, but you can't copyright a fact.


That hasn't stopped people from trying and suing in the process. I believe Major League Baseball has done this, though I don't have time to dig up a reference. Facts within MLS could be analogous to baseball stats since it is a proprietary, closed system. I'm just trying to be cautious since I'm not a lawyer.

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PostPosted: Sat May 02, 2009 9:01 pm GMT    Post subject: Reply with quote

What's the difference in publishing the numbers in graph form and publishing the numbers in table form?
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JCK



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PostPosted: Sun May 03, 2009 3:09 pm GMT    Post subject: Reply with quote

admin wrote:
nickbp wrote:
admin wrote:
I do have a spreadsheet for SFH pricing (not sales), and I would like to post it, but I don't want to run afoul of their copyright by republishing their data without explicit permission.


You might have something to worry about if you were just redistributing their PDFs, but you can't copyright a fact.


That hasn't stopped people from trying and suing in the process. I believe Major League Baseball has done this, though I don't have time to dig up a reference. Facts within MLS could be analogous to baseball stats since it is a proprietary, closed system. I'm just trying to be cautious since I'm not a lawyer.

- admin


You can get copyrights on data that's arranged in a particular manner, but not the actual data.

The can sue or threaten to sue, even if their case has no merits (although it is unethical for a lawyer to do so). So I understand your caution.
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PostPosted: Sun May 03, 2009 4:50 pm GMT    Post subject: Reply with quote

nickbp wrote:
What's the difference in publishing the numbers in graph form and publishing the numbers in table form?


The numbers in the graphs are not The MAR's original numbers since they have been adjusted for inflation. Also, raw data isn't as easily derived from graphs in general and consequently probably wouldn't be as great of an agitation to those who might be tempted resort to frivolous lawsuits, if their goal was control of the data.

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PostPosted: Sun May 03, 2009 8:54 pm GMT    Post subject: Reply with quote

A possible alternative could be a screenshot of the table. It shows the data, but still gives some hoops to extracting raw numbers.
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