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For the last several years, real estate has been in a pricing bubble. Prices have been substantially higher than historical relationships to incomes and rents would justify. While prices have started to decline, they are still abnormally high compared to these core fundamentals. This website is focused on analyzing the housing bubble, its aftermath, and real estate in general as it pertains to the Greater Boston Area.
 
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Boston-Specific Info

  • Boston Futures: For Greater Boston real estate prices from 1987 through the present and looking several years into the future, see the latest S&P/Case-Shiller Boston snapshot with futures (both before and after inflation). The futures markets are probably the most unbiased predictor of where housing prices are headed.
  • Price/Income: For a gauge of how overpriced the market is, see the latest report on the Greater Boston price to income ratio.
  • Inflation Adjusted: See the latest report on Massachusetts single family home prices for prices as typically reported by the local media but adjusted for inflation.
  • Price/Rent: Comparing prices to rents can help illuminate an overpriced market since many hypothetical justifications for higher home prices should raise rents as well. See the latest report on the Boston MSA price to rent ratio.
  • The population of the Greater Boston Area was declining as the housing market posted its most exceptional gains during the bubble. One of the fallacious arguments which was used to contest the existence of a housing bubble was that a growing population was pushing up the natural price of property. While that argument is flawed in general, it is especially wrong when the population is declining. [Boston Globe] [Boston Bubble]
  • The Wall Street Journal has identified Boston as one of the metropolitan areas in the US where it is cheaper to rent than to buy. Their data goes from 2001, when it was already cheaper to rent, to 2004 when the difference was even more pronounced. The Economist also published an article showing that renting is cheaper, and although it does not focus on Boston, it is very thorough about including various expenses and tax benefits that the Wall Street Journal left out. [Wall Street Journal] [The Economist]
  • Consumer Reports has rated real estate in the Boston market as "Overpriced" and pegged it at 24% over the affordable price as of Q4 2004. [Consumer Reports]
  • The number of homes sold in Massachusetts has been plummeting. For the third quarter of 2006 (the most recently reported quarter as of this writing), home sales have fallen 23% compared with the same quarter one year earlier. This despite the fact that home sales were already on the decline in 2005. [Worcester Telegram] [WCVB] [Milford Daily News]
  • Foreclosures are rising sharply in Greater Boston and Massachusetts. There were more foreclosures in the first nine months of 2006 than in all of 2005, and as of this writing (in November 2006), Massachusetts is on track to break the all time record in 2006. [Boston Globe] [Lowell Sun]
  • Boston and Massachusetts are the typical exceptions that people use to qualify their statements when they say that real estate prices don't fall. Boston and Massachusetts prices have fallen in the past, even in nominal terms (when adjusted for inflation, the fall is even more pronounced). Bear in mind that even if prices decline merely by the same percent that they have in the past, the leverage (a.k.a., margin or mortgage) used to purchase the homes must be taken into consideration - the substantially higher number of zero down and negative amortization loans will leave a lot of people with heavy losses and negative equity. [BusinessWeek] [Wall Street Journal (sub)]
  • To compensate for property that fails to sell, real estate agents in Boston are falling back on the deceptive practice of canceling the listing in MLS and then creating a new listing so that the property appears as new to the market. There were 10,606 MLS cancellations in the first six months of 2005, up from 9,722 cancellations in the first six months of 2004 and 3,736 in 2001. "The number of canceled listings in Massachusetts has nearly tripled since 2001... In a recent spot check of houses for sale on MLS in Middlesex County, Barry Nystedt, president of the Massachusetts Association of Buyer Agents, said one in four listings canceled between May 25 and June 25 was recreated by the same firm with a new MLS number." [Boston Globe]
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National (US) Info

  • Visit Patrick Killelea's housing crash blog. It is a fantastic resource providing ample quantitative background into the housing bubble.
  • Visit the Wikipedia article on the United States housing bubble for another excellent overview of the bubble on a national scale.
  • It is actually now cheaper to rent than to buy in many areas even after you factor in accumulated equity and tax savings. [The Economist]
  • Yale professor Robert J. Shiller released the first edition of his prophetic book warning of a stock market bubble weeks before the stock market began its epic crash in 2000. He recently released an updated second edition in late February, 2005 with similar warnings of froth in the real estate market. This book is very highly recommended and is quite readable despite the complexity of the subject. [Irrational Exuberance] [Amazon.com]
  • The current nationwide housing boom has been fueled in large part by historically low interest rates and an increase in the use of risky mortgages. Buyers may find that their monthly payments will skyrocket once the introductory period of their mortgage ends and the adjustable rate kicks in. In 2005, only $83 billion, or 1 percent, of mortgage debt will switch to an adjustable rate. In 2007, this number will leap to $1 trillion, or about 12 percent. [Herald Tribune]
>>> Discuss the national and worldwide housing bubbles now!
 

Boston Bubble News & Interesting Links

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2007-03-31
Info/Broken? - MA takes 5 of top 10 spots for increase in subprime delinquencies
MA takes 5 of top 10 spots for increase in subprime delinquencies
2007-03-31
Info/Broken? - Maps of Where Subprime Delinquencies Are Getting Worse in the US
Maps of Where Subprime Delinquencies Are Getting Worse in the US
2007-03-31
Info/Broken? - Gates Foundation investment not so bullish for real estate after all
Gates Foundation investment not so bullish for real estate after all
2007-03-30
Info/Broken? - Clinton condos up for auction - Money needed to finish controversial 493-unit project
Clinton condos up for auction - Money needed to finish controversial 493-unit project
2007-03-30
Info/Broken? - Massachusetts Mortgage Bankers Association ejects 3 subprime lenders
Massachusetts Mortgage Bankers Association ejects 3 subprime lenders
2007-03-30
Info/Broken? - Excerpt from Lennar Corporation conference call on earnings
Excerpt from Lennar Corporation conference call on earnings
2007-03-29
Info/Broken? - Foreclosure maps for Billerica, Chelmsford, Dracut, Tewksbury, Tyngsborough, Westford, and Wilmington
Foreclosure maps for Billerica, Chelmsford, Dracut, Tewksbury, Tyngsborough, Westford, and Wilmington
2007-03-29
Info/Broken? - Mortgage crisis hits million-dollar homes
Mortgage crisis hits million-dollar homes
2007-03-29
Info/Broken? - Comparison of duration of current Boston declines to declines from late 80's / early 90's
Comparison of duration of current Boston declines to declines from late 80's / early 90's
2007-03-29
Info/Broken? - Mass. foreclosures set record high again
Mass. foreclosures set record high again
2007-03-29
Info/Broken? - Maps of foreclosures from the Middlesex North Registry of Deeds in Lowell
Maps of foreclosures from the Middlesex North Registry of Deeds in Lowell
2007-03-29
Info/Broken? - Boston's financial services sector at risk, report says
Boston's financial services sector at risk, report says
2007-03-28
Info/Broken? - Stop the Subprime Bailout - Can you spare a few thousand dollars to pay somebody else's mortgage?
Stop the Subprime Bailout - Can you spare a few thousand dollars to pay somebody else's mortgage?
2007-03-28
Info/Broken? - Boston Globe profiles 5 affordable (relatively speaking) communities around Boston
Boston Globe profiles 5 affordable (relatively speaking) communities around Boston
2007-03-28
Info/Broken? - States, including MA, consider issuing bonds to aid subprime mortgage holders
States, including MA, consider issuing bonds to aid subprime mortgage holders
2007-03-28
Info/Broken? - Mortgage ignorance rampant - 34% of homeowners have no idea what type of mortgage they have
Mortgage ignorance rampant - 34% of homeowners have no idea what type of mortgage they have
2007-03-27
Info/Broken? - S&P/Case-Shiller Index down 5.6% YOY in Boston
S&P/Case-Shiller Index down 5.6% YOY in Boston
2007-03-27
Info/Broken? - Galvin urges foreclosure reforms
Galvin urges foreclosure reforms
2007-03-26
Info/Broken? - The Economist: Cracks in the facade - America's riskiest mortgages are crumbling. How far will the damage spread?
The Economist: Cracks in the facade - America's riskiest mortgages are crumbling. How far will the damage spread?
2007-03-26
Info/Broken? - Experts predict dangerous glut in real estate inventory with baby boomers retiring and MA's population growth stagnating
Experts predict dangerous glut in real estate inventory with baby boomers retiring and MA's population growth stagnating
2007-03-26
Info/Broken? - Footloose and Mortgage-Free - Why single men overwhelmingly prefer renting to buying
Footloose and Mortgage-Free - Why single men overwhelmingly prefer renting to buying
2007-03-23
Info/Broken? - Boston Bubble Brief, Feb 2007: Real prices down 6.36% YOY, 17.24% below peak.  Average decline now 3 standard deviations below 0.
Discuss - Boston Bubble Brief, Feb 2007: Real prices down 6.36% YOY, 17.24% below peak.  Average decline now 3 standard deviations below 0.
Boston Bubble Brief, Feb 2007: Real prices down 6.36% YOY, 17.24% below peak. Average decline now 3 standard deviations below 0.
2007-03-22
Info/Broken? - US housing, mortgage woes contagion feared
US housing, mortgage woes contagion feared
2007-03-22
Info/Broken? - Condo project faces auction: Broadluxe complex hits skids
Condo project faces auction: Broadluxe complex hits skids
2007-03-22
Info/Broken? - NY Times: More stories from Boston area of buyers who knowingly overextended and are now facing the consequences
NY Times: More stories from Boston area of buyers who knowingly overextended and are now facing the consequences
2007-03-22
Info/Broken? - Suffolk's plan to convert planned Downtown Crossing condos into dorm faces opposition
Suffolk's plan to convert planned Downtown Crossing condos into dorm faces opposition
2007-03-22
Info/Broken? - The Massachusetts Housing Market: February Market Wrap
The Massachusetts Housing Market: February Market Wrap
2007-03-22
Info/Broken? - Crashachusetts Existing Home Sales: February 2007 - last month's optimistic market "rebound" sentiment was short lived
Crashachusetts Existing Home Sales: February 2007 - last month's optimistic market "rebound" sentiment was short lived
2007-03-21
Info/Broken? - St. Joe 2.0: Local agent creates map of real estate consumers who are praying to St. Joseph
St. Joe 2.0: Local agent creates map of real estate consumers who are praying to St. Joseph
2007-03-21
Info/Broken? - Home-sales decline slows down: But bottom may not be in sight
Home-sales decline slows down: But bottom may not be in sight
2007-03-21
Info/Broken? - Housing market limps toward vital spring season - Prices drop 4% to 5% in February, but sales show very little change
Housing market limps toward vital spring season - Prices drop 4% to 5% in February, but sales show very little change
2007-03-20
Info/Broken? - Bristol County fared less well in February's drop
Bristol County fared less well in February's drop
2007-03-20
Info/Broken? - Mass. home prices still falling
Mass. home prices still falling
2007-03-20
Info/Broken? - Adjustable Rate Mortgage Reset Schedule (nice graph)
Adjustable Rate Mortgage Reset Schedule (nice graph)
2007-03-20
Info/Broken? - Warren Group: Feb 2007 MA SFH nominal prices down 4.6% from Feb 2006, sales down 1.4%
Warren Group: Feb 2007 MA SFH nominal prices down 4.6% from Feb 2006, sales down 1.4%
2007-03-20
Info/Broken? - New tool for charting S&P/Case-Shiller Index for Boston, et al
New tool for charting S&P/Case-Shiller Index for Boston, et al
2007-03-20
Info/Broken? - Boston Globe starts blog focused on local property taxes and community issues
Boston Globe starts blog focused on local property taxes and community issues
2007-03-19
Info/Broken? - 'Liar loans': Mortgage woes beyond subprime
'Liar loans': Mortgage woes beyond subprime
2007-03-19
Info/Broken? - A subprime sales season: Home loan woes could yield price cuts in Bay State
A subprime sales season: Home loan woes could yield price cuts in Bay State
2007-03-19
Info/Broken? - Barney Frank plans bill to rein in subprime loans
Barney Frank plans bill to rein in subprime loans
2007-03-19
Info/Broken? - Worcester flipper Harold Avery shifting strategies due to softening market
Worcester flipper Harold Avery shifting strategies due to softening market
2007-03-19
Info/Broken? - N.H. foreclosures increasing due to subprime loans
N.H. foreclosures increasing due to subprime loans
2007-03-18
Info/Broken? - Subprime market's decline puts thousands of Mass. homes at risk
Subprime market's decline puts thousands of Mass. homes at risk
2007-03-18
Info/Broken? - Boston-based Payton Construction files for chapter 11 bankruptcy
Boston-based Payton Construction files for chapter 11 bankruptcy
2007-03-18
Info/Broken? - A list of highest foreclosing lenders at The Middlesex North Registry of Deeds in Lowell
A list of highest foreclosing lenders at The Middlesex North Registry of Deeds in Lowell
2007-03-18
Info/Broken? - Boston Globe: Will I get crushed by the Subprime fallout?
Boston Globe: Will I get crushed by the Subprime fallout?
2007-03-18
Info/Broken? - Housing angst and Fed on stocks' agenda (Dedham used as illustration)
Housing angst and Fed on stocks' agenda (Dedham used as illustration)
2007-03-17
Info/Broken? - MIT economist Bill Wheaton: No recession but mortgage defaults will drag housing prices down
MIT economist Bill Wheaton: No recession but mortgage defaults will drag housing prices down
2007-03-16
Info/Broken? - A 'smoking gun' on race, subprime loans: Fresh evidence shows minorities in Boston more likely than whites to get them when buying home
A 'smoking gun' on race, subprime loans: Fresh evidence shows minorities in Boston more likely than whites to get them when buying home
2007-03-16
Info/Broken? - CNN/Money/Fortune profile Waltham couple who got in over their heads by buying in 2004
CNN/Money/Fortune profile Waltham couple who got in over their heads by buying in 2004
2007-03-16
Info/Broken? - MA Commissioner Steven Antonakes: "I'm determining what can we do to help folks that are facing the foreclosure process"
MA Commissioner Steven Antonakes: "I'm determining what can we do to help folks that are facing the foreclosure process"
2007-03-15
Info/Broken? - Hindrance to MA 40B projects removed, possibly leading to more affordable housing
Hindrance to MA 40B projects removed, possibly leading to more affordable housing
2007-03-15
Info/Broken? - Mass. foreclosure filings soar: Home sales see uptick in January, but prices falling
Mass. foreclosure filings soar: Home sales see uptick in January, but prices falling
2007-03-15
Info/Broken? - Merrill Lynch note: Mortgage problems could slap down housing prices sharply
Merrill Lynch note: Mortgage problems could slap down housing prices sharply
2007-03-15
Info/Broken? - Greenspan: Subprime risk may spread - But ex-Fed chair also says high housing prices more of a problem than mortgage quality
Greenspan: Subprime risk may spread - But ex-Fed chair also says high housing prices more of a problem than mortgage quality
2007-03-15
Info/Broken? - MA foreclosure data rise dramatically in February
MA foreclosure data rise dramatically in February
2007-03-15
Info/Broken? - Comparing the previous and current real estate cycles using S&P/Case-Shiller HPI Boston MSA
Comparing the previous and current real estate cycles using S&P/Case-Shiller HPI Boston MSA
2007-03-15
Info/Broken? - NPR Talk Show Alert: Subprime Panic today on WBUR or online via podcast
NPR Talk Show Alert: Subprime Panic today on WBUR or online via podcast
2007-03-15
Info/Broken? - Massachusetts and California have most metro areas (5 each) in list of top areas with delinquent subprime loans
Massachusetts and California have most metro areas (5 each) in list of top areas with delinquent subprime loans
2007-03-14
Info/Broken? - Galvin wants data on subprime lenders: State to look at ratings by 2 Wall Street firms
Galvin wants data on subprime lenders: State to look at ratings by 2 Wall Street firms
2007-03-14
Info/Broken? - Middlesex North Registry of Deeds: "Since 2004 we've been writing about the threat posed by the runaway mortgage industry. Unfortunately, our dire predictions seem to be upon us now."
Middlesex North Registry of Deeds: "Since 2004 we've been writing about the threat posed by the runaway mortgage industry. Unfortunately, our dire predictions seem to be upon us now."
2007-03-13
Info/Broken? - Massachusetts orders New Century to fulfill promises on loans in progress and stop taking new loan applications
Massachusetts orders New Century to fulfill promises on loans in progress and stop taking new loan applications
2007-03-13
Info/Broken? - National Crisis Looms in Market for Mortgages
National Crisis Looms in Market for Mortgages
2007-03-13
Info/Broken? - Staples jobs go south: Mass. to lose 175
Staples jobs go south: Mass. to lose 175
2007-03-12
Info/Broken? - Subprime mortgage woes may be spreading - Losses are creeping up on so-called Alt-A home loans
Subprime mortgage woes may be spreading - Losses are creeping up on so-called Alt-A home loans
2007-03-12
Info/Broken? - Globe Editorial: Homeowners on borrowed time
Globe Editorial: Homeowners on borrowed time
2007-03-12
Info/Broken? - US home prices may stay weak for years
US home prices may stay weak for years
2007-03-09
Info/Broken? - Middlesex North Registry of Deeds: RE Plunge Continues with "no indication that the slide in real estate prices and activity has finished. Quite the opposite is true."
Middlesex North Registry of Deeds: RE Plunge Continues with "no indication that the slide in real estate prices and activity has finished. Quite the opposite is true."
2007-03-09
Info/Broken? - Sean Colclough on future foreclosures: "Massachusetts [is] going to get hit extremely hard"
Sean Colclough on future foreclosures: "Massachusetts [is] going to get hit extremely hard"
2007-03-08
Info/Broken? - Massachusetts led US in layoff increases, while layoffs decreased in most states
Massachusetts led US in layoff increases, while layoffs decreased in most states
2007-03-08
Info/Broken? - Feds say business softening in Mass.
Feds say business softening in Mass.
2007-03-08
Info/Broken? - Median prices and volumes both falling in Lowell
Median prices and volumes both falling in Lowell
2007-03-07
Info/Broken? - Cape couple sues and wins injunction over rate increase on their adjustable rate mortgage
Cape couple sues and wins injunction over rate increase on their adjustable rate mortgage
2007-03-07
Info/Broken? - 2007 may turn into banner year for foreclosing - current pace could triple 2006's numbers
2007 may turn into banner year for foreclosing - current pace could triple 2006's numbers
2007-03-06
Info/Broken? - State urges curbs on subprime lenders - Housing chief would add broker licenses, fund to aid borrowers
State urges curbs on subprime lenders - Housing chief would add broker licenses, fund to aid borrowers
2007-03-05
Info/Broken? - Homeowners stuck as lenders cinch standards - Barnstable/Yarmouth and Worcester on top list of price declines, have high reset risk
Homeowners stuck as lenders cinch standards - Barnstable/Yarmouth and Worcester on top list of price declines, have high reset risk
2007-03-05
Info/Broken? - Increasing inventory in MA spun as "seller optimism"
Increasing inventory in MA spun as "seller optimism"
2007-03-05
Info/Broken? - Overdue mortgages linked to risky loans - MA foreclosure filings soar from subprime lending
Overdue mortgages linked to risky loans - MA foreclosure filings soar from subprime lending
2007-03-05
Info/Broken? - Condo overload in Worcester
Condo overload in Worcester
2007-03-02
Info/Broken? - Boston Bubble Brief, Jan 2007: Real prices down 4.61% YOY, 13.08% below peak. Lowest January on record.
Discuss - Boston Bubble Brief, Jan 2007: Real prices down 4.61% YOY, 13.08% below peak. Lowest January on record.
Boston Bubble Brief, Jan 2007: Real prices down 4.61% YOY, 13.08% below peak. Lowest January on record.
2007-03-02
Info/Broken? - State unemployment rises to 5.3%, despite jobs gain - US unemployment at 4.6%
State unemployment rises to 5.3%, despite jobs gain - US unemployment at 4.6%
2007-03-02
Info/Broken? - The Massachusetts Housing Market: January Market Wrap
The Massachusetts Housing Market: January Market Wrap
2007-03-01
Info/Broken? - (PDF) 2006: The Year in Numbers - The Warren Group's Report on Trends in Real Estate, Mortgage Lending and Foreclosures in Massachusetts
(PDF) 2006: The Year in Numbers - The Warren Group's Report on Trends in Real Estate, Mortgage Lending and Foreclosures in Massachusetts
2007-03-01
Info/Broken? - The Housing Bubble Blog on MA's increase in sales in Jan and continuing slide in prices
The Housing Bubble Blog on MA's increase in sales in Jan and continuing slide in prices
2007-03-01
Info/Broken? - Map of new condo developments in Boston
Map of new condo developments in Boston

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