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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
2007-05-31
Info/Broken? - Pre-foreclosure market in Boston - Wolves in Sheep's Clothing? (video report available)
Pre-foreclosure market in Boston - Wolves in Sheep's Clothing? (video report available)
2007-05-31
Info/Broken? - Foreclosures nearly quadruple in Lawrence
Foreclosures nearly quadruple in Lawrence
2007-05-31
Info/Broken? - Lawyer eyes Ameriquest: Clients: Home loan paperwork faulty
Lawyer eyes Ameriquest: Clients: Home loan paperwork faulty
2007-05-31
Info/Broken? - Massachusetts leads the nation in home price declines
Massachusetts leads the nation in home price declines
2007-05-31
Info/Broken? - More town and school employees feel housing market squeeze
More town and school employees feel housing market squeeze
2007-05-30
Info/Broken? - Complaints prompt hard look at mortgage telemarketing
Complaints prompt hard look at mortgage telemarketing
2007-05-30
Info/Broken? - R.I. housing slump continues in April
R.I. housing slump continues in April
2007-05-29
Info/Broken? - Greater Boston Real Estate Board CEO Gregory Vasil on buyers: "This is the low point, and if they miss it, they may not have another opportunity like this for years to come"
Greater Boston Real Estate Board CEO Gregory Vasil on buyers: "This is the low point, and if they miss it, they may not have another opportunity like this for years to come"
2007-05-29
Info/Broken? - Boston home prices fell 4.9% nominally from Mar 2006 - Mar 2007, based on S&P/Case-Shiller Index
Boston home prices fell 4.9% nominally from Mar 2006 - Mar 2007, based on S&P/Case-Shiller Index
2007-05-29
Info/Broken? - Another article on why median prices may be understating declines
Another article on why median prices may be understating declines
2007-05-29
Info/Broken? - Property tax systems leave homeowners angry, confused
Property tax systems leave homeowners angry, confused
2007-05-28
Info/Broken? - Neighborhood swayed by "liar's loans"
Neighborhood swayed by "liar's loans"
2007-05-28
Info/Broken? - '80's Flashback: Housing economists catch-up with bubble bloggers
'80's Flashback: Housing economists catch-up with bubble bloggers
2007-05-28
Info/Broken? - Crashachusetts Existing Home Sales: April 2007
Crashachusetts Existing Home Sales: April 2007
2007-05-25
Info/Broken? - Boston Bubble Brief, Apri 2007: Real YOY decline 4.40%, prices 13.29% below peak - no "positive trend"
Discuss - Boston Bubble Brief, Apri 2007: Real YOY decline 4.40%, prices 13.29% below peak - no "positive trend"
Boston Bubble Brief, Apri 2007: Real YOY decline 4.40%, prices 13.29% below peak - no "positive trend"
2007-05-25
Info/Broken? - Housing slump may rival late '80s - Study's author says state could gain by being less expensive
Housing slump may rival late '80s - Study's author says state could gain by being less expensive
2007-05-25
Info/Broken? - Experts: Cape Ann Housing Opportunity lost race to sell condos before market cooled
Experts: Cape Ann Housing Opportunity lost race to sell condos before market cooled
2007-05-24
Info/Broken? - Report: NE economy to lag through 2011, housing declines to continue
Report: NE economy to lag through 2011, housing declines to continue
2007-05-23
Info/Broken? - Record Foreclosure Filings Hit Communities Across Massachusetts Regardless of Size and Location
Record Foreclosure Filings Hit Communities Across Massachusetts Regardless of Size and Location
2007-05-23
Info/Broken? - Massachusetts foreclosure filings up 63% from April 2006 to April 2007
Massachusetts foreclosure filings up 63% from April 2006 to April 2007
2007-05-23
Info/Broken? - The Housing Bubble Blog: Prices Declining Steadily In Massachusetts
The Housing Bubble Blog: Prices Declining Steadily In Massachusetts
2007-05-23
Info/Broken? - MA housing market suffers downturn
MA housing market suffers downturn
2007-05-23
Info/Broken? - Slump in condo sales puts heralded Stoughton project in default with main lender
Slump in condo sales puts heralded Stoughton project in default with main lender
2007-05-22
Info/Broken? - Warren Group reports greater declines than MAR once again - nominal prices fell 4.7% from April 2006 - 2007, sales down 1.9%
Warren Group reports greater declines than MAR once again - nominal prices fell 4.7% from April 2006 - 2007, sales down 1.9%
2007-05-22
Info/Broken? - MAR: April sales fall 1.7% from 2006, nominal prices down 2.3% - MAR's take: "The housing market continued to trend in a positive direction for the month of April"
MAR: April sales fall 1.7% from 2006, nominal prices down 2.3% - MAR's take: "The housing market continued to trend in a positive direction for the month of April"
2007-05-20
Info/Broken? - Home auctions quadruple: Bay State has 1,712 ads in April
Home auctions quadruple: Bay State has 1,712 ads in April
2007-05-18
Info/Broken? - Neighbors fear Union Square zoning changes put homes out of reach
Neighbors fear Union Square zoning changes put homes out of reach
2007-05-16
Info/Broken? - Middlesex North Registry of Deeds confirms surge of foreclosures, continuing weakness in May
Middlesex North Registry of Deeds confirms surge of foreclosures, continuing weakness in May
2007-05-16
Info/Broken? - More face auction of homes
More face auction of homes
2007-05-15
Info/Broken? - Why rent? To get richer
Why rent? To get richer
2007-05-15
Info/Broken? - Mass. foreclosure activity shoots up 355% in April
Mass. foreclosure activity shoots up 355% in April
2007-05-15
Info/Broken? - Boston makes Forbes list of top 10 most overpriced real estate markets in the US
Boston makes Forbes list of top 10 most overpriced real estate markets in the US
2007-05-14
Info/Broken? - Weak spring may drive home prices lower
Weak spring may drive home prices lower
2007-05-14
Info/Broken? - Pols plan as foreclosures loom: Thousands in state are close to losing homes
Pols plan as foreclosures loom: Thousands in state are close to losing homes
2007-05-13
Info/Broken? - Lereah's recent bearish statements still dishonest
Lereah's recent bearish statements still dishonest
2007-05-11
Info/Broken? - Age limits rescinded on Holden condo complex - Empty nesters not buying homes
Age limits rescinded on Holden condo complex - Empty nesters not buying homes
2007-05-11
Info/Broken? - The ugly face of foreclosure (national)
The ugly face of foreclosure (national)
2007-05-10
Info/Broken? - Toll Brothers CEO grades Massachusetts housing market an "F"
Toll Brothers CEO grades Massachusetts housing market an "F"
2007-05-10
Info/Broken? - Subprime woes hit Boston area buyers - Those with limited resources finding it harder to get loans
Subprime woes hit Boston area buyers - Those with limited resources finding it harder to get loans
2007-05-10
Info/Broken? - Maine Housing Bubble Blog
Maine Housing Bubble Blog
2007-05-10
Info/Broken? - Connecticut Can't Shake Housing Slump - New-Home Sales, Resales Fall 8.6% In March; Economists Don't Expect Rapid Recovery
Connecticut Can't Shake Housing Slump - New-Home Sales, Resales Fall 8.6% In March; Economists Don't Expect Rapid Recovery
2007-05-09
Info/Broken? - Anyone want a house? Has the state got a real estate deal for you
Anyone want a house? Has the state got a real estate deal for you
2007-05-09
Info/Broken? - NH foreclosures jump as "exotic" loans' rates adjust
NH foreclosures jump as "exotic" loans' rates adjust
2007-05-08
Info/Broken? - Shiller: Mr. Worst-case scenario
Shiller: Mr. Worst-case scenario
2007-05-08
Info/Broken? - Another bailout proposal for overextended Boston borrowers: City Hall would buy foreclosures and rent/sell them back to the owners
Another bailout proposal for overextended Boston borrowers: City Hall would buy foreclosures and rent/sell them back to the owners
2007-05-07
Info/Broken? - Attention Millionaires: Manny Ramirez and Pedro Martinez Want to Sell You Their Homes
Attention Millionaires: Manny Ramirez and Pedro Martinez Want to Sell You Their Homes
2007-05-07
Info/Broken? - Leff: Housing regulations are strangling state's economy
Leff: Housing regulations are strangling state's economy
2007-05-06
Info/Broken? - Housing cheers turn gloomy - Long criticized as too upbeat, Realtors' departing economist now sees recession
Housing cheers turn gloomy - Long criticized as too upbeat, Realtors' departing economist now sees recession
2007-05-05
Info/Broken? - Home sale prices on Cape dip
Home sale prices on Cape dip
2007-05-04
Info/Broken? - Developers' squabble could spell trouble for NorthPoint
Developers' squabble could spell trouble for NorthPoint
2007-05-04
Info/Broken? - House panel chaired by MA Rep Frank votes to expand FHA role in subprime lending
House panel chaired by MA Rep Frank votes to expand FHA role in subprime lending
2007-05-03
Info/Broken? - Middlesex North Registry of Deeds: April stats - "While the plunge seems to have eased, we still haven't turned the corner"
Middlesex North Registry of Deeds: April stats - "While the plunge seems to have eased, we still haven't turned the corner"
2007-05-01
Info/Broken? - Lenders say many won't be helped by MA foreclosure delay
Lenders say many won't be helped by MA foreclosure delay
2007-05-01
Info/Broken? - R.I. home sales fall 3% in 1Q, 17.7% in March
R.I. home sales fall 3% in 1Q, 17.7% in March
2007-05-01
Info/Broken? - MA Declares Moratorium On Foreclosures - Move Against "Predatory Lenders" Is Unprecedented
MA Declares Moratorium On Foreclosures - Move Against "Predatory Lenders" Is Unprecedented

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