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Justify housing prices in Davis Square
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Thu Oct 11, 2007 5:39 pm GMT    Post subject: Reply with quote

I see your point, those bolded words are completely overstate the case. I do think it completely crossed the line in to the Puff piece category, I was just saying that it wasn't a complete fabrication so I'm saying less time in the penalty box than that blogger who seems to want to tar and feather and then light on fire the writer. I'm just saying tar, feather, and throw rotten tomatoes at the writer, that's all I'm saying. Also, the true news is alway diverse, not every place will feel the same exact impact of the decline; the ones that stand out are newsworthy and it begs the researcher to question why. I think that will come in due time.

The way I see it is this: some folks have to sell and some folks have to buy, and some folks really want to buy and really want to sell. Having to buy.... maybe some bridezilla is just chewing up some guy to buy... There needs to be a place for these people to do business.

I think my lack of sensitivity comes from knowing the realtor's m.o. I mean they were spinning one month's decline as a positive because it declined less than prior months.

Keep in mind as this whole market backslides increased demand might come to some areas due to the demand transferring from a more expensive area to less expensive area. Also, because the rich are getting richer, some of the more affluent neighborhoods are going up in price. I see this as hard to cover from a reporter's perspective. Despite this, I do think that those bolded words are misleading. When that stuff happens it does deserve some pressure to keep that crap from getting out of line. I mean who hires an environmental engineer other than someone that wants to break/bend the environmental laws? I mean first time buyers aren't paying the writers salaries as much as the advertisers.

This whole Arlington thing, I see as temporary. Buyer's focus migrates to the best available affordable areas. What's interesting is that the girl in the picture almost fits the decor of that kitchen; I mean she's wearing an off-purple, orange and brown (that's kind of a retro 70's thing). My wife's wearing the same kind of get-ups... She might like one of those Atomic Ranches

http://www.atomic-ranch.com/

This is sort of the reason why fashion is cyclical. If you ever watched the show Friend's you'd see odd blends of clothing and artwork. Some of the affordable areas to live in Manhattan were near Chinatown, so you'd see some of that influence; http://www.ladylicorice.com/graphics/stylepicks/china_girl_shirt.jpg you'd see the old posters that one might rummage out of a second hand store...

I guess to me for Arlington to be ok makes sense. Of course the realtors are going to trumpet anything that is positive in this market. The key is to be conscious of how they frame their words.

Also, with regards to the whole "Best of Boston" stuff, it seems that whomever writes this stuff hits the obvious areas but lives and frequents the yuppie neighborhoods. The problem yuppies have is that they are conformists by nature so they tend to herd, follow the same trends etc. Hell, I could send ten of my boys out to stand at some of the trendy bars and talk anything up and make just about anything appear. For example from:

http://www.ireland-fun-facts.com/ireland-facts.html

The word quiz was allegedly invented in the 1830’s by a Dublin theater owner named Richard Daly, who made a bet that he could make a nonsense word known throughout the city in just 48 hours. Legend says that Daly gave his employees cards with the word “quiz” written on them, and told them to write it on walls all over the city. Some historians argue that the word was already in use at this time, but most agree that it did not acquire it’s current definition – "to question or interrogate" – until sometime in the 19th century.

Realtors and yuppies are predictable, so I guess I wasn't shocked to see this reaction...
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john p



Joined: 10 Mar 2006
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PostPosted: Fri Oct 12, 2007 7:04 pm GMT    Post subject: Reply with quote

I'm having trouble logging in/ posting on the whole Arlington/ Boston Globe article site...

I think the blogger has many good points.

Some things he didn't point out were: it seems that the editor framed it in a way where he was putting it into context with some other stories which were negative reports of the market. This does two things:

First, it makes you think that they were predisposed to do a make-up call. This is the sort of stuff I'd expect from Fox News with the whole "fair and balanced" stuff. It is like they think that every issue has two sides and two viewpoints that always break Republican and Democrat. The truth is that news is what it is and you don't have to shape it or sculpt it to balance. If you're reporting about a rapist, you don't need to hear the side of other rapists to get the fair perspective of rapists. A good story should be able to stand alone and not be averaged in with other stories that might have leaned in one direction in one's mind.

Second, this gets to competence. To get a job at the Globe you need to be a great writer. Your competence is in writing not so much the subject matter you're covering. The demand for subject matter experts is growing in the news market and the generalist writers who need to put out work product daily have a difficult time. I think that the Globe does a very good job considering it is a daily publication, but I think that they need to be a little more disciplined about the words they choose (the specific degree a word may have in common understanding).

The news isn't perfect; most do their best. If you waited for perfection you'd be like the Harvard folks that are always the Monday morning quarterbacks, a day late and a dollar short.

My question to the blogger is that when you look at the growing separation between Arlington and Bedford versus the other mix, don't you see the potential for a localized area correction? Maybe there is a buzz out there identifying this? When something is "hot" it is in the buzz. A "buzz" is newsworthy if it is for real. The danger with identifying a buzz is that one questions who is putting the spin out there (who generated the buzz). In fact, a strength and asset for a company is its ability to sway opinion and generate buzz.

If we beat up our press too much they may be less inclined to be as sensitive to the buzz reporting and we want them as our eyes and ears. Maybe they just deserve to be reminded that the gravity of their words matter more than the average bear.
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admin
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Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston

PostPosted: Fri Oct 12, 2007 7:44 pm GMT    Post subject: Reply with quote

john p wrote:
I'm having trouble logging in/ posting on the whole Arlington/ Boston Globe article site...


Do you mean the Paper Economy blog or the Globe's blog? The Paper Economy author might (?) have closed comments on the first post since he came out with a follow up today:

http://paper-money.blogspot.com/2007/10/gloves-come-off.html

You make a lot of good points. People can be open minded to a fault. If you give equal weight to every idea under the guise of being "fair and balanced," you end up with Pastafarians.

Maybe the expectations are a little higher than they should be for The Globe. You are right that it is tough to be perfect with the throughput of stories they produce. On the other hand, that's one of the reasons why the Paper Economy (and maybe Squaring The Boston Globe, which I recently discovered) posts are a good thing. Blogs have the potential to be supplements which improve the accuracy of the papers when taken together.

- admin
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Fri Oct 12, 2007 8:37 pm GMT    Post subject: Reply with quote

I can understand some people being more frustrating. I mean to some, their time is now. They are pissed because they are in the chapter of their life where they want to settle down and buy and due to nonsense they have to sit in a holding pattern and deal with a bad hand. Nobody else seems to care because they have their homes etc. For new buyers it just sucks. Even now, when the day of reckoning is due, the Fed bails out the financial industry as well as those that overextended. The P/E ratio of housing for new buyers is totally not fair. A generation is being screwed. I am really mad to see others turn their backs on them. I keep bringing up casinos because I see that in a similar light (it targets a small group and everyone turns their backs on them). Knowing that the masses behave without this loyalty or kinship towards eachother, it just encourages more predators and bad behavior.

I think the lack of sensitivity with regard to the wording has to do with the fact that they forget that some are out there in the cold and waiting for this asset class to come down to earth. If you're feeling frustrated, remind yourself that it is not a reflection on you. Even if this market can stabilize during a period where it has every reason to collapse, there isn't much right now to have it go up. With a very large amount of babyboomers beginning to retire in 2012, I just don't see prices skyrocketting again. There are cheaper towns to live in for a few years if you can't make it that long, but I think the younger generation will eventually have their time in the sun. Lastly, the cool places aren't where the cool places are, they are where the cool people go.
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john p



Joined: 10 Mar 2006
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PostPosted: Fri Oct 12, 2007 9:26 pm GMT    Post subject: Reply with quote

Here's a place to hide out until Davis Square comes down to reality. You can jump on the commuter rail right down the street....

http://homes.realtor.com/ ...truncated...

Editor's Note: This post was edited to abbreviate a URL which was widening the page due to the way that the forum software lays out posts. No other changes have been made, and the URL still points to the original destination - only its display has been shortened.
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steverino
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PostPosted: Mon Nov 05, 2007 10:46 pm GMT    Post subject: Gee Reply with quote

I go away for a year, and look what happens to my nice thread.

Now, let's see this article about Davis Square.
Quote:
“(Davis Square) has a fantastic balance of practicality and fun,” said Robyn Sinder, who went in with her boyfriend on a $665,000 loft-style two-bedroom condo. “You have all the basic things you need right here, but there are (also) restaurants, bars (and) great places to hear music.”


Yes, Robin, you also have a still empty unit (http://tinyurl.com/23op5e)
in your "hot" 3-unit building (http://tinyurl.com/2fbnvn) whose asking price is the same as the price you actually paid--except it never sold.

So, it's not like you have anything to gain from pimping high real estate prices, right, RobYn?

Quote:
“It’s young, it’s vibrant - and it’s on the Red Line,” said Kathy Martin, 54, who recently teamed up with her 62-year-old husband to buy a $960,000 three-bedroom condo after his job moved to Cambridge.


Et tu, Kathy--whose name appears on no Somerville deed, and who bought her condo at a specific price that no property in Somerville sold for in the last year, hmmm?

Why, the newspaper couldn't be telling us anything but the truth, could it?
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Tue Nov 06, 2007 3:38 pm GMT    Post subject: Reply with quote

stevorino,

Nice work.

I never knew that a triple-decker could be considered "loft-style." Guess you learn something every day. Wink


It is possible that (a) $960,000 was an approximation or (b) the condo was bought through a trust or other vehicle that doesn't result in the owner's name appearing at the registry of deeds. But it does make me skeptical that such a transaction ever took place.

Back Bay or South End, I have no problem seeing a $1m 3BR condo. Davis I'm having a tough time with.
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PostPosted: Mon Nov 12, 2007 7:43 pm GMT    Post subject: Reply with quote

Quote:
I think the lack of sensitivity with regard to the wording has to do with the fact that they forget that some are out there in the cold and waiting for this asset class to come down to earth


John, rental rates in Arlington are still 40-50% of the cost of ownership. So really, there's no incentive to buy when a rental suffices. There are apartment units all over Arlington, with kids running around alongside their young, 30(+)something parents. And I suspect those parents will eventually buy in Natick or somewhere else out near the 495 perimeter if the P/Es don't come down to a 1.2-1.5 ratio instead of 2.1 to 3 as their kids enter the teenage years.

The mentality towards RE is shifting as people realize that it's more an albatross than an asset class. The reason why this new crop of parents want to buy is because their older brothers/sisters and parents did so before them but it isn't a necessity for them to live.
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Mon Nov 12, 2007 8:07 pm GMT    Post subject: Reply with quote

Anonymous wrote:
Quote:
I think the lack of sensitivity with regard to the wording has to do with the fact that they forget that some are out there in the cold and waiting for this asset class to come down to earth


John, rental rates in Arlington are still 40-50% of the cost of ownership. So really, there's no incentive to buy when a rental suffices. There are apartment units all over Arlington, with kids running around alongside their young, 30(+)something parents. And I suspect those parents will eventually buy in Natick or somewhere else out near the 495 perimeter if the P/Es don't come down to a 1.2-1.5 ratio instead of 2.1 to 3 as their kids enter the teenage years.

The mentality towards RE is shifting as people realize that it's more an albatross than an asset class. The reason why this new crop of parents want to buy is because their older brothers/sisters and parents did so before them but it isn't a necessity for them to live.


I'd be curious to see the age distribution/demographics of homeowners in Arlington. A colleague of mine, who used to live in Arlington, referred to the town as home to the "newly wed and nearly dead." It makes me wonder if there are a significant number of home occupied by people whose kids have left, but are still occupying family-sized homes.

This would constrict the market of available single families, and drive up their price disproportionately relative to rental equivalents.
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john p



Joined: 10 Mar 2006
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PostPosted: Mon Nov 12, 2007 8:19 pm GMT    Post subject: Reply with quote

Best line of the day, "newly wed, nearly dead"...

I'm hearing a handful of stories about empty nesters trading their single families to their kids who live in condos....
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admin
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Location: Greater Boston

PostPosted: Sun Jan 20, 2008 7:53 pm GMT    Post subject: Sold Reply with quote

steverino,

It looks like your "Edith Bunker" house may have finally been sold.

Asking price circa spring 2006: $975K
Asking price on Oct 5, 2007: $749K
Sale price on Dec 17, 2007: $665K

This is according to Trulia:

http://www.trulia.com/homes/Massachusetts/Somerville/sold/991513-16-CHESTER-PL-SOMERVILLE-MA-02144

Zillow doesn't list the sale yet. However, Zillow was updated to include the previous sale, which was $20K on Jan 19, 1972. That's $108K in today's dollars, using the CPI for Boston. That's quite the increase. No doubt, part of the increase was justified by the extension of the Red Line to Davis. I think part of it was bubble related too. At least the buyer got in below the "Zestimate" ($721K) and well below the original, lofty asking price.

- admin
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Mon Jan 21, 2008 10:26 pm GMT    Post subject: Reply with quote

You can see the sale at the registry of deeds.

Go the cambridgedeeds.com, and search the address in Somerville.

The deed is listed at $665,000 as indicated by the above website.

Admin,

I'm a little skeptical that inflation adjustment here is useful. Many properties in Cambridge and Somerville are way, way above their inflation adjusted prices. I think there's been a shift here that simply isn't accounted for by inflation, the bubble, or the Red Line extension for that matter.

My neighborhood, Cambridgeport, shows places that sold for $30k that today are worth more than 20 times that today.

See for example, this dump.

http://www.cambridgema.gov/fiscalaffairs/PropertyDetail.cfm?PropertyId=6194

This place was literally falling apart. As you can see, it sold for $37k in 1971. Going to the registry of deeds today, you will see it sold for almost $1.1m dollars last August. It's now being gut-rehabbed into three "luxury" condos.

I guess they're expecting at least $700k per unit. The place is pretty big, but $1.1m for this blows my mind.
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admin
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PostPosted: Mon Jan 21, 2008 10:50 pm GMT    Post subject: Reply with quote

JCK wrote:

Admin,

I'm a little skeptical that inflation adjustment here is useful. Many properties in Cambridge and Somerville are way, way above their inflation adjusted prices. I think there's been a shift here that simply isn't accounted for by inflation, the bubble, or the Red Line extension for that matter.

My neighborhood, Cambridgeport, shows places that sold for $30k that today are worth more than 20 times that today.

Adjusting for inflation is useful in that it puts the original purchase price in perspective. Saying that the house was purchased for $20K is an unnecessarily poor representation. Saying that it was purchased for $108K in today's dollars allows for an apples to apples comparison. That reduces the most recent sales price from a factor of 33 over the previous price to the much lower factor of 6. Inflation was clearly a major player.

I am not saying that there isn't some other factor at play too. Hypothetically speaking, maybe it is the gentrification which starts within a city and spreads outward to the suburbs over time. Just on the back of the envelope, giving a factor of 1.8 to each of the bubble, Red Line, and gentrification would account for the full remainder of the increase.

- admin
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Mon Jan 21, 2008 11:08 pm GMT    Post subject: Reply with quote

On that level, I agree. I just wouldn't say inflation, by itself, is useful as a guide for today's prices. Even the bubbliest of bubble-heads aren't saying prices should decline 83%!
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admin
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PostPosted: Mon Jan 21, 2008 11:16 pm GMT    Post subject: Reply with quote

JCK wrote:
On that level, I agree. I just wouldn't say inflation, by itself, is useful as a guide for today's prices. Even the bubbliest of bubble-heads aren't saying prices should decline 83%!


It depends on the area. That's why I added the bit about the Red Line extension originally - that would justify some sort of real price increase.

I do think that inflation by itself could be used as a guide to today's prices in places that haven't experienced significant evolution over the time period in question. I doubt that you will find 83% differentials in those places, though.

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