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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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<< << << Show Recent Links
2007-04-30
Info/Broken? - Massachusetts to seek delays on foreclosures
Massachusetts to seek delays on foreclosures
2007-04-30
Info/Broken? - Blueprint for new housing in Greater Boston: Plan calls for more townhouses, multifamily homes; focuses on building in town centers
Blueprint for new housing in Greater Boston: Plan calls for more townhouses, multifamily homes; focuses on building in town centers
2007-04-30
Info/Broken? - Mass. economic growth outpaces nation, but housing a trouble spot
Mass. economic growth outpaces nation, but housing a trouble spot
2007-04-30
Info/Broken? - State's foreclosure rate deemed a crisis by governor
State's foreclosure rate deemed a crisis by governor
2007-04-30
Info/Broken? - Brokers in Blogsville - front page article in Globe's Sunday Real Estate section mentions bostonbubble.com, features logo
Brokers in Blogsville - front page article in Globe's Sunday Real Estate section mentions bostonbubble.com, features logo
2007-04-27
Info/Broken? - Boston Bubble Brief, Mar 2007: Real YOY decline of 2.39% less severe than normal
Discuss - Boston Bubble Brief, Mar 2007: Real YOY decline of 2.39% less severe than normal
Boston Bubble Brief, Mar 2007: Real YOY decline of 2.39% less severe than normal
2007-04-27
Info/Broken? - Lower Boston condo sales may be residual effect from timing of projects
Lower Boston condo sales may be residual effect from timing of projects
2007-04-27
Info/Broken? - Boston's condominium market posted a surprisingly weak start of the year
Boston's condominium market posted a surprisingly weak start of the year
2007-04-26
Info/Broken? - Middlesex North Registry of Deeds: correction continues in April - deeds down 11%, foreclosures up 243%, compared to last year
Middlesex North Registry of Deeds: correction continues in April - deeds down 11%, foreclosures up 243%, compared to last year
2007-04-26
Info/Broken? - Patrick proposes mortgage fraud law
Patrick proposes mortgage fraud law
2007-04-25
Info/Broken? - The Housing Bubble Blog: "The Escape Hatch Is Closing" In Massachusetts
The Housing Bubble Blog: "The Escape Hatch Is Closing" In Massachusetts
2007-04-24
Info/Broken? - Massachusetts foreclosure filings spiked by 47 percent in March
Massachusetts foreclosure filings spiked by 47 percent in March
2007-04-24
Info/Broken? - S&P housing index shows steepest decline in U.S. home prices in nearly 15 years
S&P housing index shows steepest decline in U.S. home prices in nearly 15 years
2007-04-24
Info/Broken? - MA home sales drop again: Market may not be at bottom yet
MA home sales drop again: Market may not be at bottom yet
2007-04-23
Info/Broken? - Massachusetts Petitions to Foreclose Rise 80 Percent in First Quarter of 2007; Auction Announcements up Almost 200 Percent, According to The Warren Group
Massachusetts Petitions to Foreclose Rise 80 Percent in First Quarter of 2007; Auction Announcements up Almost 200 Percent, According to The Warren Group
2007-04-23
Info/Broken? - Massachusetts Association of Realtors' data inexplicably inconsistent
Massachusetts Association of Realtors' data inexplicably inconsistent
2007-04-23
Info/Broken? - Massachusetts home prices stabilize in March-report
Massachusetts home prices stabilize in March-report
2007-04-23
Info/Broken? - Massachusetts Home Sales and Prices Continue to Inch Downward During First Quarter; According to The Warren Group
Massachusetts Home Sales and Prices Continue to Inch Downward During First Quarter; According to The Warren Group
2007-04-22
Info/Broken? - Worried homeowners share their high-interest stories - National effort to battle lenders hits Jamaica Plain
Worried homeowners share their high-interest stories - National effort to battle lenders hits Jamaica Plain
2007-04-22
Info/Broken? - Caught in a mortgage trap in Maine
Caught in a mortgage trap in Maine
2007-04-21
Info/Broken? - Subprime mess hits homeowners in R.I.
Subprime mess hits homeowners in R.I.
2007-04-20
Info/Broken? - Doug Azarian, MAR President: "the market is stabilizing..." "it is a great time to buy"
Doug Azarian, MAR President: "the market is stabilizing..." "it is a great time to buy"
2007-04-20
Info/Broken? - Home foreclosures rose fourfold in Hub in 2006
Home foreclosures rose fourfold in Hub in 2006
2007-04-20
Info/Broken? - Slowing real estate market hurting advertising revenue for newspapers, including Globe's owner
Slowing real estate market hurting advertising revenue for newspapers, including Globe's owner
2007-04-19
Info/Broken? - More details from Herald - Home scheme halted: AG slams Mass. firms' foreclosure 'rescue'
More details from Herald - Home scheme halted: AG slams Mass. firms' foreclosure 'rescue'
2007-04-18
Info/Broken? - Injunction issued in state case vs. mortgage brokers
Injunction issued in state case vs. mortgage brokers
2007-04-17
Info/Broken? - Subprime loans can't be easily rewritten: FDIC
Subprime loans can't be easily rewritten: FDIC
2007-04-16
Info/Broken? - 15 month graph of Boston condo inventory and sales
15 month graph of Boston condo inventory and sales
2007-04-13
Info/Broken? - Upcoming seminar on preventing foreclosure, April 19th in Lowell
Upcoming seminar on preventing foreclosure, April 19th in Lowell
2007-04-13
Info/Broken? - More details on mortgage fraud: AG sues 19, alleges foreclosure scams
More details on mortgage fraud: AG sues 19, alleges foreclosure scams
2007-04-12
Info/Broken? - Mass. AG sues 19 for mortgage fraud
Mass. AG sues 19 for mortgage fraud
2007-04-12
Info/Broken? - The Boston Indicators Project - Measuring and analyzing local housing, the local economy, etc.
The Boston Indicators Project - Measuring and analyzing local housing, the local economy, etc.
2007-04-12
Info/Broken? - David Lereah (video clip): Boston and nearby areas "beginning to recover" and "becoming pretty good buys"
David Lereah (video clip): Boston and nearby areas "beginning to recover" and "becoming pretty good buys"
2007-04-12
Info/Broken? - Groups recommend guidelines to reduce MA foreclosures
Groups recommend guidelines to reduce MA foreclosures
2007-04-12
Info/Broken? - Altered photos: Removing the real from real estate
Altered photos: Removing the real from real estate
2007-04-12
Info/Broken? - Mortgage woes could be 'tip of the iceberg' - Fraud, abusive lending crushes dreams for millions of home owners
Mortgage woes could be 'tip of the iceberg' - Fraud, abusive lending crushes dreams for millions of home owners
2007-04-11
Info/Broken? - Discuss: Should Massachusetts bail out borrowers?
Discuss - Discuss: Should Massachusetts bail out borrowers?
Discuss: Should Massachusetts bail out borrowers?
2007-04-11
Info/Broken? - Plan will aid those facing loss of homes - Panel urges state to offer financing help as foreclosures grow
Plan will aid those facing loss of homes - Panel urges state to offer financing help as foreclosures grow
2007-04-11
Info/Broken? - Middlesex North Registry of Deeds: "Nothing that's happened at this registry during the first ten days of April suggests that the real estate market is starting to rebound."
Middlesex North Registry of Deeds: "Nothing that's happened at this registry during the first ten days of April suggests that the real estate market is starting to rebound."
2007-04-09
Info/Broken? - Lowell Sun running 3 part series on local foreclosures
Lowell Sun running 3 part series on local foreclosures
2007-04-08
Info/Broken? - Foreclosure's shadow falls across diverse set of US homeowners - Lawrence, MA couple profiled
Foreclosure's shadow falls across diverse set of US homeowners - Lawrence, MA couple profiled
2007-04-07
Info/Broken? - Globe Op-Ed Piece by Robert Kuttner: The housing squeeze
Globe Op-Ed Piece by Robert Kuttner: The housing squeeze
2007-04-06
Info/Broken? - In Central MA, homeowners bear brunt of tax increases
In Central MA, homeowners bear brunt of tax increases
2007-04-06
Info/Broken? - Governor Patrick previously oversaw subprime lenders now responsible for many MA foreclosures
Governor Patrick previously oversaw subprime lenders now responsible for many MA foreclosures
2007-04-05
Info/Broken? - High overlap between New Century creditors and Senator Dodd's top contributors
High overlap between New Century creditors and Senator Dodd's top contributors
2007-04-05
Info/Broken? - H&R Block Mortgage closes Burlington office
H&R Block Mortgage closes Burlington office
2007-04-05
Info/Broken? - 100+ years of US Home prices adjusted for inflation plotted as a roller coaster
100+ years of US Home prices adjusted for inflation plotted as a roller coaster
2007-04-05
Info/Broken? - Report: Boston will shrink without immigrants
Report: Boston will shrink without immigrants
2007-04-04
Info/Broken? - Massachusetts orders Vertical Lend Inc. to halt mortgages, citing forged signatures, faked files
Massachusetts orders Vertical Lend Inc. to halt mortgages, citing forged signatures, faked files
2007-04-04
Info/Broken? - Barry Bluestone at Northeastern testifies on negative impact of housing bubble in Boston
Barry Bluestone at Northeastern testifies on negative impact of housing bubble in Boston
2007-04-04
Info/Broken? - Middlesex North Registry of Deeds on Feb & Q1 2007 vs. Feb & Q1 2006: sales down, foreclosures up by triple digit percentages
Middlesex North Registry of Deeds on Feb & Q1 2007 vs. Feb & Q1 2006: sales down, foreclosures up by triple digit percentages
2007-04-04
Info/Broken? - Plights of three Boston area subprime borrowers reflect shifting terrain for home ownership
Plights of three Boston area subprime borrowers reflect shifting terrain for home ownership
2007-04-03
Info/Broken? - North Shore foreclosure filings skyrocket
North Shore foreclosure filings skyrocket
2007-04-03
Info/Broken? - Low ground-water levels are causing some Boston structures to rot under the surface
Low ground-water levels are causing some Boston structures to rot under the surface
2007-04-03
Info/Broken? - Housing's fear factor: Crime may lower prices in some Hub areas
Housing's fear factor: Crime may lower prices in some Hub areas
2007-04-03
Info/Broken? - 2nd largest subprime lender (New Century) files for bankruptcy
2nd largest subprime lender (New Century) files for bankruptcy
2007-04-02
Info/Broken? - S&P/Case-Shiller (CSI) Index Tool updated to graph futures and YOY changes for Boston, etc.
S&P/Case-Shiller (CSI) Index Tool updated to graph futures and YOY changes for Boston, etc.
2007-04-02
Info/Broken? - New housing permits in Central Mass. drop 50% YOY in January
New housing permits in Central Mass. drop 50% YOY in January
2007-04-01
Info/Broken? - Fifty Massachusetts towns considering property tax hikes
Fifty Massachusetts towns considering property tax hikes
2007-04-01
Info/Broken? - Owner asking more for 3 floors of retail than it paid for all of 360 Newbury in '04
Owner asking more for 3 floors of retail than it paid for all of 360 Newbury in '04

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