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Boston home market sinks to (nominal) '02 levels as losses m

 
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news



Joined: 14 Jul 2007
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Location: Greater Boston

PostPosted: Tue Aug 09, 2011 2:25 pm GMT    Post subject: Boston home market sinks to (nominal) '02 levels as losses m Reply with quote

Use this forum thread to discuss the following link.

Description: Boston home market sinks to (nominal) '02 levels as losses mount
URL: http://www.bizjournals.com/boston/real_estate/2011/08/boston-home-market-sags-bu ...truncated...
Info/Broken?: http://www.bostonbubble.com/link_info.php?id=3634

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PostPosted: Tue Aug 09, 2011 4:44 pm GMT    Post subject: Reply with quote

I know the CSI data says the high tier has more than corrected but I just don't see it, even remotely, in the asking prices. Take these listings for example:

298 Langley Rd Newton, MA 02459

391 Worcester St Wellesley, MA 02481

51 Harding Rd Lexington, MA 02420

97 Woodside Ln Arlington, MA 02474

These are not representative necessarily but I didn't cherry pick. I just picked several random listings in towns which cover ~25% of the area in 128. I don't think the CSI index includes most of Greater Boston.

I realize these are selling values but they are typically selling within 5-10% of asking prices and the disconnect can be much larger in many of these towns.

Editor's note: fixed broken link.
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balor123



Joined: 08 Mar 2008
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PostPosted: Tue Aug 09, 2011 4:45 pm GMT    Post subject: Reply with quote

That was from me btw. Please fix last link if possible. Note that I pointed these out because the article cited nominal values.
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PostPosted: Tue Aug 09, 2011 5:04 pm GMT    Post subject: Reply with quote

Could your impression be due to survivorship bias? That is, those houses which are offered at prices that have corrected in line with the CSI are the ones which are getting sold. You are only observing the unsold homes, the ones where the prices haven't been reduced in line with the market.

If I remember correctly, the CSI does cover all of Greater Boston and then some. It even extends slightly into New Hampshire, I think. Although, the high tier is probably concentrated much closer to Boston in practice.

Also, the high tier is actually still above its inflation adjusted historical average, even with the very narrow historical window offered by the CSI, which only goes back to 1987. The low and mid tiers are below their averages for the same period, but even those aren't dramatically below.

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balor123



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PostPosted: Wed Aug 10, 2011 3:07 am GMT    Post subject: Reply with quote

It could be but it seems like a stretch. I should be seeing homes that are on the market for a few days that are more reasonable at least, no? I thought the CSI only covered Boston-Quincy-Cambridge?
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balor123



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PostPosted: Wed Aug 10, 2011 3:08 am GMT    Post subject: Reply with quote

Those 90s look pretty good. Can we get back there? The economy was in much better shape then.
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PostPosted: Wed Aug 10, 2011 10:32 am GMT    Post subject: Reply with quote

balor123 wrote:
It could be but it seems like a stretch. I should be seeing homes that are on the market for a few days that are more reasonable at least, no? I thought the CSI only covered Boston-Quincy-Cambridge?


How often are you sampling the prices?

They use Boston-Quincy-Cambridge as the name to identify the MSA, but it definitely includes towns beyond that: http://www2.standardandpoors.com/spf/pdf/index/SPCS_MetroArea_HomePrices_Methodology.pdf

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balor123



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PostPosted: Wed Aug 10, 2011 4:23 pm GMT    Post subject: Reply with quote

Every month or two so not a lot.

That link doesn't clearly state that other areas are covered. It could just be saying the names of the counties that those cities fall in, though I haven't checked if that is the case. Do you know if that's the case?
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balor123



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PostPosted: Wed Aug 10, 2011 4:25 pm GMT    Post subject: Reply with quote

What also might be useful is if they published the underlying data used in constructing the index. Do you know if they do that? We might understand better what's going on if we had that data.
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PostPosted: Wed Aug 10, 2011 4:50 pm GMT    Post subject: Reply with quote

There are 5 MA counties and 2 NH counties on the list. The MSA can't just be Boston Proper, Cambridge, and Quincy, since there are NH counties on the list. I also don't think any of those cities are in Essex or Plymouth counties in MA (plus it seems unlikely that 3 cities would span 5 counties).

I don't think that they publish the underlying data. I think they buy it from The Warren Group, though. If you're motivated, it might be practical to do the same (I think the Warren Group's pricing was fairly cheap last I checked) and build your own index for your towns of interest. The Registry of Deeds could work too - I started on a program to do just this awhile back, but it's not nearly ready for prime time at this point, and I will probably need to leave it tabled for the foreseeable future due to other time commitments.

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