bostonbubble.com

[jfunk138]

http://www.cato.org/pub_display.php?pub_id=10570

[secretlyironic]

Sorry if this posts twice -- but the Cato link is pretty obviously false. Texas and Georgia have indeed suffered from a bubble. Cato seems to have begun with "I hate liberal do-gooders" and then moved on from there.

[balor123]

How do you figure? Certainly prices weren't immune there but have fallen roughly as expected due to a recession. I think Texas largely skirted the bubble, primarily because of growth friendly policies. It simply doesn't make sense to pay much more for existing houses when you can get a much nicer new one 5min down the road.

I suppose Texas could have gone the way of Arizona but it has an economy outside of real estate so the inventory isn't as big of a problem.

Another factor preventing bubble not mentioned is that Texas lacks a bubble culture - appreciating home prices are shunned by most due to the effect on real estate taxes (ironic for a Republican state). I can't cite any particular evidence for this case here except from my observations as a native Texan.

[Guest]

[Renting in Mass]

I'd take this article more as a "I hate realtors..."

I'm not a fan of much that comes out of the Cato Institute, but I can get behind that

[john p]

I think a lot of it is that land is plentiful in areas like Texas and even their cities are more spread out and were planned when we had an automobiles.

Think about how much land costs here versus there.

Then think about how cheap labor is there. We have unions here and they have illegals down there.

Next, having to build a full basement to get under the frost line adds a lot to the house price.

Also, when you have an older city, you have more wealth accumulating. How many homes do you think are passed on from generation to generation? I'd say one out of every 4 homes is passed down to the next generation. Sometimes a house is sold and the money is split among the kids, so they can have a chunk of money for a down payment or to invest. Younger families that have to fend for themselves often just move to lower cost of living areas where the barriers to entry are lower and they can get more bang for their buck.

So let's do the math.

In Massachusetts:

A lot of land within the 128 belt is say $350,000, then say you build 2,500 s.f. at $140 per square foot that is another $350,000 and now you've got $700k for a new 2,500 s.f. house.


In Texas:

A lot of land is $60k and it costs about $90 per square foot to build so that 2,500 s.f. house is $285k.

[balor123]

[john p]

I think that Unions protect those that corporations can divide and conquer, but you have to admit they actually drive up the cost of living with their prevailing wages. Look at how Newton High School skyrocketted out of control because of the cost overruns, the taxpayers in Newton will have to absorb that while the Union contractors stuffed their pockets; same as the Big Dig. A healthy balance of Unions is healthy for a society, but Unions that are too strong can bury a society; take New Jersey. I don't care if a Union protects a brick layers back and sets the number of bricks they can lay in a day, but I think it is absurd that you can't have a non-Union guy pump your gas in New Jersey; that goes too far in my mind. At that point, the Unions drive business away. When the Unions push for casinos and don't care that thousands of families will be destroyed due to financial losses, they want their job no matter how much pain it causes for others, that's when they go too far. Why should I look out for them, when they don't look out for anyone but themselves either; they've become that which they protest, predators.

As far as illegals go, they are embedded here in Massachusetts for sure, I'd just assume that because Texas is closer to the Mexican Border that they'd have more of them there?

The point regarding the basement relates not so much to the cost of materials, but that it takes more material to build a foundation in Massachusetts than in Texas.

The point regarding the old money in Massachusetts does reduce supply like you mention and therefore increases demand, which puts upward pressure on prices in my view.

I'm not sure about the exact dollar per square foot in Massachusetts versus Texas, but I know it's a pretty sizeable spread. I"m not sure if urban planners are responsible for this.

My big question to you has to do with the economic fundamentals of Texas. I have debates with family members who argue that Texas has a lot of money because of oil and that Bush sent a lot of money back to his home state. I contend that because Texas is business friendly, it is a sanctuary state for capitalism. Unfortunately, I also see it as polluter friendly so it may attract some bad business.

As far as planning is concerned, I think you need to start to have a crisis before people wake up. Boston had their harbor polluted and had gridlock traffic for a long time becore they listened to planners. We laid out our whole highway system based on the assumption of one car per household (the wife stayed at home). Planners in Massachusetts allowed single families to be converted to two, three families and in areas like some neighborhoods in Waltham, the streets are now choked with parked cars on both sides, side yards and back yards are now parking lots. All the towns that fought this growth are now the elite towns. We have allowed snob zoning in Massachusetts. It is an infringement on freedom when someone is kept from putting up a tacky illuminated sign in a working class town, but you may as well have clubbed a baby seal in Weston if you propose to build anything other than a shingle-style home. It is really hypocritical when you see all these left-wingers who make fun of the right wingers when in reality, the elite left wing live in the most racially segregated towns i.e. Wellesley, Weston, Dover, etc.

[Guest]

[john p]

Yeah, but at a certain point it starts to get crowded. If you want to attract high level people you need certain towns near the city to be quiet and peaceful and exclusive. Some people wouldn't consider relocating to certain cities because they don't have any nice quiet towns to live in near their work.

I think they should focus on revitalizing cities like Lynn, which is on the ocean and train lines and take some old Building 19 1/2 and used car lots and turn them into nice parks and housing developments.

[balor123]