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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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2007-09-28
Info/Broken? - Boston Bubble Brief Aug 2007: MAR YOY increase still a decline in real terms.  Discrepancy between MAR and Warren Group at 13.69%.
Discuss - Boston Bubble Brief Aug 2007: MAR YOY increase still a decline in real terms.  Discrepancy between MAR and Warren Group at 13.69%.
Boston Bubble Brief Aug 2007: MAR YOY increase still a decline in real terms. Discrepancy between MAR and Warren Group at 13.69%.
2007-09-28
Info/Broken? - August national YOY housing price decline biggest in 37 years
Discuss - August national YOY housing price decline biggest in 37 years
August national YOY housing price decline biggest in 37 years
2007-09-27
Info/Broken? - Patrick administration prediction: Mortgage foreclosures will get worse
Discuss - Patrick administration prediction: Mortgage foreclosures will get worse
Patrick administration prediction: Mortgage foreclosures will get worse
2007-09-27
Info/Broken? - Crashachusetts Existing Home Sales: August 2007
Discuss - Crashachusetts Existing Home Sales: August 2007
Crashachusetts Existing Home Sales: August 2007
2007-09-27
Info/Broken? - Fan Pier finally rises
Discuss - Fan Pier finally rises
Fan Pier finally rises
2007-09-26
Info/Broken? - Condo glut clouds 2009 fiscal forecasting in Salisbury
Discuss - Condo glut clouds 2009 fiscal forecasting in Salisbury
Condo glut clouds 2009 fiscal forecasting in Salisbury
2007-09-26
Info/Broken? - Foreclosures drag down home sales
Discuss - Foreclosures drag down home sales
Foreclosures drag down home sales
2007-09-25
Info/Broken? - S&P/Case-Shiller July 2007 Released, Boston down 3.4% nominally from July 2006
Discuss - S&P/Case-Shiller July 2007 Released, Boston down 3.4% nominally from July 2006
S&P/Case-Shiller July 2007 Released, Boston down 3.4% nominally from July 2006
2007-09-25
Info/Broken? - Warren Group data conflicts with MAR yet again with price decline of nearly 5% in August
Discuss - Warren Group data conflicts with MAR yet again with price decline of nearly 5% in August
Warren Group data conflicts with MAR yet again with price decline of nearly 5% in August
2007-09-25
Info/Broken? - Pond View Village units back on the market with price drops as much as $100,000
Discuss - Pond View Village units back on the market with price drops as much as $100,000
Pond View Village units back on the market with price drops as much as $100,000
2007-09-25
Info/Broken? - MAR August 2007 vs 2006 (PDF): nominal, median, SFH price up 1.4%
Discuss - MAR August 2007 vs 2006 (PDF): nominal, median, SFH price up 1.4%
MAR August 2007 vs 2006 (PDF): nominal, median, SFH price up 1.4%
2007-09-24
Info/Broken? - Eastie's sizzle fizzles - The next 'hot' housing market has cooled, and, for some, that's OK
Discuss - Eastie's sizzle fizzles - The next 'hot' housing market has cooled, and, for some, that's OK
Eastie's sizzle fizzles - The next 'hot' housing market has cooled, and, for some, that's OK
2007-09-24
Info/Broken? - Lessons from Boston's last downturn - why the market deadlocks
Discuss - Lessons from Boston's last downturn - why the market deadlocks
Lessons from Boston's last downturn - why the market deadlocks
2007-09-23
Info/Broken? - Boston foreclosure report, week ending September 21, 2007
Discuss - Boston foreclosure report, week ending September 21, 2007
Boston foreclosure report, week ending September 21, 2007
2007-09-22
Info/Broken? - Preliminary September stats from Middlesex North Registry of Deeds: 19% decrease in documents, foreclosure deeds up 92%
Discuss - Preliminary September stats from Middlesex North Registry of Deeds: 19% decrease in documents, foreclosure deeds up 92%
Preliminary September stats from Middlesex North Registry of Deeds: 19% decrease in documents, foreclosure deeds up 92%
2007-09-22
Info/Broken? - Massachusetts saw 4,527 foreclosures in August, or 1 in 594 households
Discuss - Massachusetts saw 4,527 foreclosures in August, or 1 in 594 households
Massachusetts saw 4,527 foreclosures in August, or 1 in 594 households
2007-09-21
Info/Broken? - 2006 surprises for MA: nominal average prices declined 15.56% (not as bad as it sounds), nominal median income declined 1.23%
Discuss - 2006 surprises for MA: nominal average prices declined 15.56% (not as bad as it sounds), nominal median income declined 1.23%
2006 surprises for MA: nominal average prices declined 15.56% (not as bad as it sounds), nominal median income declined 1.23%
2007-09-20
Info/Broken? - Moody's Economy.com predicts Boston prices to decline 9.4% from peak with bottom in Q4 2008
Discuss - Moody's Economy.com predicts Boston prices to decline 9.4% from peak with bottom in Q4 2008
Moody's Economy.com predicts Boston prices to decline 9.4% from peak with bottom in Q4 2008
2007-09-20
Info/Broken? - Correction: S&P/Case-Shiller Boston futures predict 22.72% nominal drop by Q3 2011
Discuss - Correction: S&P/Case-Shiller Boston futures predict 22.72% nominal drop by Q3 2011
Correction: S&P/Case-Shiller Boston futures predict 22.72% nominal drop by Q3 2011
2007-09-19
Info/Broken? - Real Estate Derivatives Seminar on Oct 10th 4PM - 6PM at The Downtown Harvard Club of Boston
Discuss - Real Estate Derivatives Seminar on Oct 10th 4PM - 6PM at The Downtown Harvard Club of Boston
Real Estate Derivatives Seminar on Oct 10th 4PM - 6PM at The Downtown Harvard Club of Boston
2007-09-19
Info/Broken? - State of the Nation's Housing 2007 - Harvard Release, tomorrow at noon, open to public
Discuss - State of the Nation's Housing 2007 - Harvard Release, tomorrow at noon, open to public
State of the Nation's Housing 2007 - Harvard Release, tomorrow at noon, open to public
2007-09-19
Info/Broken? - Foreclosure threats high in Worcester
Discuss - Foreclosure threats high in Worcester
Foreclosure threats high in Worcester
2007-09-19
Info/Broken? - N.E. may stay afloat in stormy economy - Businesses brace as outlook turns murky
Discuss - N.E. may stay afloat in stormy economy - Businesses brace as outlook turns murky
N.E. may stay afloat in stormy economy - Businesses brace as outlook turns murky
2007-09-18
Info/Broken? - Federal Reserve cuts benchmark interest rate 0.5%
Discuss - Federal Reserve cuts benchmark interest rate 0.5%
Federal Reserve cuts benchmark interest rate 0.5%
2007-09-17
Info/Broken? - Boston Bubble Special Report: Extended S&P/Case-Shiller futures debut. Market predicts 29.40% nominal drop by Q3 2011, no bottom in sight.
Discuss - Boston Bubble Special Report: Extended S&P/Case-Shiller futures debut. Market predicts 29.40% nominal drop by Q3 2011, no bottom in sight.
Boston Bubble Special Report: Extended S&P/Case-Shiller futures debut. Market predicts 29.40% nominal drop by Q3 2011, no bottom in sight.
2007-09-17
Info/Broken? - Work at Monarch on the Merrimack condos in Lawrence all but stops
Discuss - Work at Monarch on the Merrimack condos in Lawrence all but stops
Work at Monarch on the Merrimack condos in Lawrence all but stops
2007-09-17
Info/Broken? - Boston law firms get ready for uptick in subprime business
Discuss - Boston law firms get ready for uptick in subprime business
Boston law firms get ready for uptick in subprime business
2007-09-16
Info/Broken? - Price it right; Ask too much in a down market and you may lose
Discuss - Price it right; Ask too much in a down market and you may lose
Price it right; Ask too much in a down market and you may lose
2007-09-16
Info/Broken? - Boston foreclosure report, week ending September 14, 2007
Discuss - Boston foreclosure report, week ending September 14, 2007
Boston foreclosure report, week ending September 14, 2007
2007-09-15
Info/Broken? - Permit numbers plunge - Building slowdown stresses Mass. economy
Discuss - Permit numbers plunge - Building slowdown stresses Mass. economy
Permit numbers plunge - Building slowdown stresses Mass. economy
2007-09-13
Info/Broken? - More minorities denied mortgages - Boston rejection rates highest since early '90s
Discuss - More minorities denied mortgages - Boston rejection rates highest since early '90s
More minorities denied mortgages - Boston rejection rates highest since early '90s
2007-09-12
Info/Broken? - Housing Bust Hits Enclave of Super-Rich (Nantucket)
Discuss - Housing Bust Hits Enclave of Super-Rich (Nantucket)
Housing Bust Hits Enclave of Super-Rich (Nantucket)
2007-09-12
Info/Broken? - NARcasting The Future: September 2007 - Updated "forecast" graph and history of quotes
Discuss - NARcasting The Future: September 2007 - Updated "forecast" graph and history of quotes
NARcasting The Future: September 2007 - Updated "forecast" graph and history of quotes
2007-09-11
Info/Broken? - NAR reduces forecast for 9th time this year, now says Q1 2008 will be bottom
Discuss - NAR reduces forecast for 9th time this year, now says Q1 2008 will be bottom
NAR reduces forecast for 9th time this year, now says Q1 2008 will be bottom
2007-09-11
Info/Broken? - Government steps up to help borrowers, but not without controversy
Discuss - Government steps up to help borrowers, but not without controversy
Government steps up to help borrowers, but not without controversy
2007-09-10
Info/Broken? - Rhode Island Home Sales and Prices Drop Again in July; Sales Drop for Fifth Straight Month, According to The Warren Group
Discuss - Rhode Island Home Sales and Prices Drop Again in July; Sales Drop for Fifth Straight Month, According to The Warren Group
Rhode Island Home Sales and Prices Drop Again in July; Sales Drop for Fifth Straight Month, According to The Warren Group
2007-09-09
Info/Broken? - Free how-to seminar on selling your own home, Sep 18th in Sudbury
Discuss - Free how-to seminar on selling your own home, Sep 18th in Sudbury
Free how-to seminar on selling your own home, Sep 18th in Sudbury
2007-09-09
Info/Broken? - Boston foreclosure report, week ending September 7, 2007
Discuss - Boston foreclosure report, week ending September 7, 2007
Boston foreclosure report, week ending September 7, 2007
2007-09-09
Info/Broken? - The Blame Game - brought to you by CNN
Discuss - The Blame Game - brought to you by CNN
The Blame Game - brought to you by CNN
2007-09-07
Info/Broken? - Is living in The Natick Mall luxurious?
Discuss - Is living in The Natick Mall luxurious?
Is living in The Natick Mall luxurious?
2007-09-07
Info/Broken? - Jumbo loan woes hitting brokers - MA mortgage brokerage firms closing at torrid pace
Discuss - Jumbo loan woes hitting brokers - MA mortgage brokerage firms closing at torrid pace
Jumbo loan woes hitting brokers - MA mortgage brokerage firms closing at torrid pace
2007-09-07
Info/Broken? - Massachusetts delinquencies up sharply
Discuss - Massachusetts delinquencies up sharply
Massachusetts delinquencies up sharply
2007-09-06
Info/Broken? - NPR lead story: New Foreclosure Rate Surges to Record
Discuss - NPR lead story: New Foreclosure Rate Surges to Record
NPR lead story: New Foreclosure Rate Surges to Record
2007-09-06
Info/Broken? - Baby Boomers Eye Part-Time Jobs Out Of State - Some Say State Not Livable When Working Hours Decrease
Discuss - Baby Boomers Eye Part-Time Jobs Out Of State - Some Say State Not Livable When Working Hours Decrease
Baby Boomers Eye Part-Time Jobs Out Of State - Some Say State Not Livable When Working Hours Decrease
2007-09-06
Info/Broken? - NPR Talkshow Alert: The Subprime Mop-up
Discuss - NPR Talkshow Alert: The Subprime Mop-up
NPR Talkshow Alert: The Subprime Mop-up
2007-09-06
Info/Broken? - Tight credit hurts housing, little else; Beige book report makes chances for rate cut less likely
Discuss - Tight credit hurts housing, little else; Beige book report makes chances for rate cut less likely
Tight credit hurts housing, little else; Beige book report makes chances for rate cut less likely
2007-09-05
Info/Broken? - Plymouth County foreclosures explode
Discuss - Plymouth County foreclosures explode
Plymouth County foreclosures explode
2007-09-04
Info/Broken? - MA attorney general bars for-profit foreclosure rescues
Discuss - MA attorney general bars for-profit foreclosure rescues
MA attorney general bars for-profit foreclosure rescues
2007-09-04
Info/Broken? - The Onion's satirical take on recent housing price declines
Discuss - The Onion's satirical take on recent housing price declines
The Onion's satirical take on recent housing price declines
2007-09-02
Info/Broken? - Boston foreclosure report, week ending August 31, 2007
Discuss - Boston foreclosure report, week ending August 31, 2007
Boston foreclosure report, week ending August 31, 2007
2007-09-01
Info/Broken? - The Housing Bubble Blog on many Massachusetts real estate news articles
Discuss - The Housing Bubble Blog on many Massachusetts real estate news articles
The Housing Bubble Blog on many Massachusetts real estate news articles
2007-09-01
Info/Broken? - Economist eyes home value dive: Others skeptical of 50% decline
Discuss - Economist eyes home value dive: Others skeptical of 50% decline
Economist eyes home value dive: Others skeptical of 50% decline

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