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Low inventory for 2017
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PostPosted: Wed Jul 26, 2017 12:22 pm GMT    Post subject: Reply with quote

[quote="Anonymous"]
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:

Similar 2BD/1BA apts in JP rent for around 2300/month. Hi rents are the main reason why home prices are so high in Boston.

Rents were also $2000/mo when condo prices were $300k (I know because I lived in JP). Rents have not doubled, but condo prices have.

Boston area obviously has a lot of rich people. But when a JP condo is now worth as much as my parent's colonial with two-car garage in a nice school district within 128, it's time to rethink value. Schools in JP suck balls too. Where are all the yuppies sending their kids to?


Please show me a colonial with two-car garage in a nice school district within 128 for sale for under 500k.

LOLz, Glad I bought my 2500 SF house with skyline views of Boston for $800K last year. Good schools for my two boys, too. Shit's expensive around here, and it'll remain expensive because of our local economy. This whole "bubble" shit is completely stupid. It just comes down to the fact that any open house inside of 128 with good schools is PACKED. Even shitty tear downs get snapped up.
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PostPosted: Wed Jul 26, 2017 12:25 pm GMT    Post subject: Reply with quote

https://www.housingwire.com/articles/40772-case-shiller-housing-is-not-repeating-the-bubble-period

http://www.cnbc.com/2017/07/26/jpmorgan-points-to-low-risk-of-a-us-housing-correction.html
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PostPosted: Wed Jul 26, 2017 4:15 pm GMT    Post subject: Reply with quote

Quote:
My experience is the floor of the market is very high and there's not a huge price difference between really nice and marginally nice. It's almost like everyone is trying to squeeze every last bit of disposable income in buying a place, any place, they could still afford. People with some real disposable income can still afford to be a little pickier. There just aren't that many people who can afford a million dollar place no matter how low interest rates go.


You touch on the MOST important reflection of current housing market condition, which will dictate what the housing market will go in the next couple of year.

What you pointed out is, everyone wants to buy a piece of property, as worry about price will keep going up, while money is de-valuating on buying power, with close to nothing in interest rate return. Yet the real income of general public is not growing the same rate as housing price increase rate, therefore the affordability of average purchaser stagnate around somewhere between 400k to 500k. Therefore the entry level price floor elevated to around there. You also bring up a good point about less of price difference between good and bad area. That means most people still can not afford a million dollar house. So you actually getting a much bigger bang of your buck by shopping high end market today, with price tag above 850K.
This summer I spot A LOT MORE inventories of for sale homes on the market compare to last year, and start to see more 500k priced properties. It could be temporary profit taking from investor/home owner, who expect no higher price they will get for the property in near future.

What will happening in the next couple of years depends on interest rate, human emotion based on interest rate trend; as well as any black swan that will push up or press down the current economy. A bubble is inflated to a bursting stage, we are just waiting for the puncher point. When is still a bit early to predict.
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PostPosted: Wed Jul 26, 2017 5:39 pm GMT    Post subject: Reply with quote

Quote:
I just don't understand the appeal of JP once prices are over half a million. Prices like that make me want to leave the whole area and look into places like Pittsburgh, where half a million still gets you a nice big house in a tree-lined neighborhood with walkable areas to nearby restaurants.


This is another very important fact of current housing market. It is not just happening in JP, it is happening in a lot of areas with high rent and high property price. un-affordability start to drive people out of high priced regions, and force them to move to second tier cites. Technology is able to increase work-from-home workforce, which can benefit largely on the price difference between different regions. This trend could be a stealth needle that puncher the housing bubble in coastal regions.

During the meantime, will there be enough constant demand to absorb all the extra housing supplies, while more new developments are still on its way to the market? If yes, how long will this last?

If the summer of 2017 is the beginning of the end on 'low inventory', then how big the possibility will it turn into the beginning of the end of current housing bubble? The answer should come from interest rate trend in the near future, and how much it affects the human emotion. Obviously we won't be able to confirm the low inventory is truly gone until next year. So keep the thought in mind for now.
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PostPosted: Wed Jul 26, 2017 9:45 pm GMT    Post subject: Reply with quote

To echo other posters, I'm also really puzzled at what schools the JP parents who buy the $500k condo send their kids to? BPS? private schools? home schooled? Or do most parents in JP have only infants and toddlers? I do see a lot of strollers and little kids in JP. The local schools like Curry Elementary are pretty shitty to put it mildly and very under-resourced. I just don't see how the typical JP baby-wearing parent would send their own kids to BPS elementary and middle schools, and also deal with the lotteries etc.

JP public schools are like 15% white, yet all the people I see roaming around Centre St are white. It's all very puzzling. Busing has its limits too since everyone wants to win the lottery and get in to a few decent schools.
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PostPosted: Wed Jul 26, 2017 9:47 pm GMT    Post subject: Reply with quote

Sorry I meant Curley.
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PostPosted: Wed Jul 26, 2017 10:13 pm GMT    Post subject: Reply with quote

There's also Ellis Mendell elementary school in JP area that got a lot of press for "white people staying in BPS." But a closer look shows a total enrollment of 40 kids per grade with about 15 white kids per grade. This isn't exactly "the yuppies are storming in!" numbers given that the population of JP is close to 40k. All in all I'm still at a loss of where do the white JP yuppies send their kids to school?
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PostPosted: Thu Jul 27, 2017 1:17 am GMT    Post subject: Reply with quote

Quote:
All in all I'm still at a loss of where do the white JP yuppies send their kids to school?


JP has been the ground zero of gentrification for a few years now. what I can see is rapidly the low income residents will get push out of it, and the yuppies new comers will actually feels better with the public school system, with higher income population moving in.

The only section can not be root out is the huge housing project right behind the T station. But when gentrification makes the low income residents there become the minority of JP, then the 500k entry level home price will be justified.
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PostPosted: Thu Jul 27, 2017 1:22 am GMT    Post subject: Reply with quote

Anonymous wrote:

LOLz, Glad I bought my 2500 SF house with skyline views of Boston for $800K last year. Good schools for my two boys, too. Shit's expensive around here, and it'll remain expensive because of our local economy. This whole "bubble" shit is completely stupid. It just comes down to the fact that any open house inside of 128 with good schools is PACKED. Even shitty tear downs get snapped up.


Imagine if you had listened to the people on this board and didn't buy. You'd be kicking yourself right now. I know someone who has been waiting since 2003 to buy, convinced that prices will plummet when interest rates will go back up so he can get a bargain. The good news was that he didn't buy in 2006. The bad news is that he is still waiting.
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PostPosted: Thu Jul 27, 2017 2:17 am GMT    Post subject: Reply with quote

A bubble would be identified by what the market looks like over the future, not by what it looks like now. So, packed open houses and the thriving local economy that exist now don't really negate the possibility of a bubble. This isn't to say that there is a bubble, just that this isn't evidence against it. The local economy is not infallible. It has hit downturns in the past and that is to be expected.
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PostPosted: Thu Jul 27, 2017 11:50 am GMT    Post subject: Reply with quote

The local economy is highly dependent on federal government largess such as Medicare (which also pays for medical residency training and we have a lot of training hospitals here) and federal education loans for the numerous colleges and grad schools here. The latter is a huge pot of money considering anyone with a pulse can get a federal loan to go to school, and this money is immediately injected into the local economy here. There's also significant military contractor money in the area via Raytheon.

This makes Boston largely immune to economic cycles as it has its mouth right at the federal govt's teat.
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PostPosted: Thu Jul 27, 2017 1:11 pm GMT    Post subject: Reply with quote

Anonymous wrote:


JP has been the ground zero of gentrification for a few years now. what I can see is rapidly the low income residents will get push out of it, and the yuppies new comers will actually feels better with the public school system, with higher income population moving in
.


It doesn't work that way in Boston. BPS assigns students largely by a lottery system. You are not guaranteed your neighborhood school. The good schools in BPS tend to have tiny enrollments and thus long waiting lists and lottery numbers. Even if you luck out you have to do the process again for middle school. The other problem with BPS is that it's resource strapped. You have big student to teacher ratios for elementary and middle schools.

Schools is a big headache for Boston families. It's a common topic of conversation.
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PostPosted: Thu Jul 27, 2017 1:54 pm GMT    Post subject: Reply with quote

Anonymous wrote:
The local economy is highly dependent on federal government largess such as Medicare (which also pays for medical residency training and we have a lot of training hospitals here) and federal education loans for the numerous colleges and grad schools here. The latter is a huge pot of money considering anyone with a pulse can get a federal loan to go to school, and this money is immediately injected into the local economy here. There's also significant military contractor money in the area via Raytheon.

This makes Boston largely immune to economic cycles as it has its mouth right at the federal govt's teat.


Comparing the last two recessions, Boston actually fared a little worse than the US both times. Here's a chart of the change in GDP per year for Boston Metro - look for the "Change in GDP" section. It doesn't go back very far, but you can see the last two recessions:

https://www.opendatanetwork.com/entity/310M200US14460/Boston_Metro_Area_MA_NH/economy.gdp.per_capita_gdp#economy-gdp-per-capita-gdp-percent-change-chart

Compare that to the US GDP and note that the troughs are lower for Boston:

http://www.multpl.com/us-real-gdp-growth-rate/table/by-year

- admin
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PostPosted: Thu Jul 27, 2017 4:53 pm GMT    Post subject: Reply with quote

Very good information Admin. People choosing to buy houses these days seem to feel the need to justify that we're not in a bubble, or that somehow Boston is exempt. That is rubbish. Due to the very same facts that Boston has diversification in its economy via biomedical, tech, colleges, etc, also are cause for Boston to become more inflated during times of easy money and accomodative Fed policy. When it corrects, sure the Boston values should remain higher than say Kentucky, but a 20% correction is still a 20% correction. I have lived through two in Boston. I haven't been impressed in its resiliency. When it turns, it turns. Period.
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PostPosted: Thu Jul 27, 2017 8:06 pm GMT    Post subject: Reply with quote

admin wrote:
Anonymous wrote:
The local economy is highly dependent on federal government largess such as Medicare (which also pays for medical residency training and we have a lot of training hospitals here) and federal education loans for the numerous colleges and grad schools here. The latter is a huge pot of money considering anyone with a pulse can get a federal loan to go to school, and this money is immediately injected into the local economy here. There's also significant military contractor money in the area via Raytheon.

This makes Boston largely immune to economic cycles as it has its mouth right at the federal govt's teat.


Comparing the last two recessions, Boston actually fared a little worse than the US both times. Here's a chart of the change in GDP per year for Boston Metro - look for the "Change in GDP" section. It doesn't go back very far, but you can see the last two recessions:

https://www.opendatanetwork.com/entity/310M200US14460/Boston_Metro_Area_MA_NH/economy.gdp.per_capita_gdp#economy-gdp-per-capita-gdp-percent-change-chart

Compare that to the US GDP and note that the troughs are lower for Boston:

http://www.multpl.com/us-real-gdp-growth-rate/table/by-year

- admin


I think that you are comparing per capita GDP to total. The metro area total GDP can be found at FRED. It doesn't decrease as much.
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