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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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2008-04-30
Info/Broken? - State far outpacing US economy, report says
Discuss - State far outpacing US economy, report says
State far outpacing US economy, report says
2008-04-30
Info/Broken? - Increased Foreclosures Spark Arson Concerns
Discuss - Increased Foreclosures Spark Arson Concerns
Increased Foreclosures Spark Arson Concerns
2008-04-30
Info/Broken? - REX Agreement claims to allow Massachusetts homeowners to convert home equity into cash now without debt, interest or monthly payments
Discuss - REX Agreement claims to allow Massachusetts homeowners to convert home equity into cash now without debt, interest or monthly payments
REX Agreement claims to allow Massachusetts homeowners to convert home equity into cash now without debt, interest or monthly payments
2008-04-29
Info/Broken? - Case-Shiller: Boston down 4.6% in Feb 2008 from Feb 2007
Discuss - Case-Shiller: Boston down 4.6% in Feb 2008 from Feb 2007
Case-Shiller: Boston down 4.6% in Feb 2008 from Feb 2007
2008-04-29
Info/Broken? - Housing prices keep falling as slump enters its third year - Sellers lowering expectations to close deals
Discuss - Housing prices keep falling as slump enters its third year - Sellers lowering expectations to close deals
Housing prices keep falling as slump enters its third year - Sellers lowering expectations to close deals
2008-04-29
Info/Broken? - Foreclosures help spark worst drop in state since 1990
Discuss - Foreclosures help spark worst drop in state since 1990
Foreclosures help spark worst drop in state since 1990
2008-04-29
Info/Broken? - Q1 foreclosures spike 260% in Massachusetts, 112% nationally
Discuss - Q1 foreclosures spike 260% in Massachusetts, 112% nationally
Q1 foreclosures spike 260% in Massachusetts, 112% nationally
2008-04-28
Info/Broken? - Crashachusetts Existing Home Sales and Prices: March 2008
Discuss - Crashachusetts Existing Home Sales and Prices: March 2008
Crashachusetts Existing Home Sales and Prices: March 2008
2008-04-28
Info/Broken? - Mortgage crisis hits prime borrowers in NH
Discuss - Mortgage crisis hits prime borrowers in NH
Mortgage crisis hits prime borrowers in NH
2008-04-28
Info/Broken? - MA home prices slide in March, sales plunge - Warren Group: nominal SFH prices down 10.6% YOY, sales down 32% - MAR: nominal SFH prices down 8.4% YOY, sales down 32.3%
Discuss - MA home prices slide in March, sales plunge - Warren Group: nominal SFH prices down 10.6% YOY, sales down 32% - MAR: nominal SFH prices down 8.4% YOY, sales down 32.3%
MA home prices slide in March, sales plunge - Warren Group: nominal SFH prices down 10.6% YOY, sales down 32% - MAR: nominal SFH prices down 8.4% YOY, sales down 32.3%
2008-04-28
Info/Broken? - Owners trash, strip their foreclosed homes
Discuss - Owners trash, strip their foreclosed homes
Owners trash, strip their foreclosed homes
2008-04-27
Info/Broken? - U.S. middle class taps nest eggs to keep homes
Discuss - U.S. middle class taps nest eggs to keep homes
U.S. middle class taps nest eggs to keep homes
2008-04-25
Info/Broken? - MA March preview: SFH nominal median down 8.4% YOY, sales down 32.3% YOY, multi-family nominal median down 28.4% YOY
Discuss - MA March preview: SFH nominal median down 8.4% YOY, sales down 32.3% YOY, multi-family nominal median down 28.4% YOY
MA March preview: SFH nominal median down 8.4% YOY, sales down 32.3% YOY, multi-family nominal median down 28.4% YOY
2008-04-25
Info/Broken? - Pain of Foreclosures Spreads to the Affluent
Discuss - Pain of Foreclosures Spreads to the Affluent
Pain of Foreclosures Spreads to the Affluent
2008-04-25
Info/Broken? - Dorchester builder Trinity Financial cuts condo prices at Carruth
Discuss - Dorchester builder Trinity Financial cuts condo prices at Carruth
Dorchester builder Trinity Financial cuts condo prices at Carruth
2008-04-25
Info/Broken? - Government Got What It Asked for in Housing Bust - Policies favoring ownership distort market
Discuss - Government Got What It Asked for in Housing Bust - Policies favoring ownership distort market
Government Got What It Asked for in Housing Bust - Policies favoring ownership distort market
2008-04-24
Info/Broken? - Mass. home foreclosures jump 140% YOY in March
Discuss - Mass. home foreclosures jump 140% YOY in March
Mass. home foreclosures jump 140% YOY in March
2008-04-24
Info/Broken? - New-Home Sales Fall to Low Last Seen in 1990s
Discuss - New-Home Sales Fall to Low Last Seen in 1990s
New-Home Sales Fall to Low Last Seen in 1990s
2008-04-24
Info/Broken? - Brockton Pushes 100% Financing For Bank-Owned Properties
Discuss - Brockton Pushes 100% Financing For Bank-Owned Properties
Brockton Pushes 100% Financing For Bank-Owned Properties
2008-04-23
Info/Broken? - Downtown condos to be auctioned - Broadluxe, Modern fall victim to housing slump
Discuss - Downtown condos to be auctioned - Broadluxe, Modern fall victim to housing slump
Downtown condos to be auctioned - Broadluxe, Modern fall victim to housing slump
2008-04-23
Info/Broken? - Redfin report that old, expensive homes sell faster ignores knockdowns
Discuss - Redfin report that old, expensive homes sell faster ignores knockdowns
Redfin report that old, expensive homes sell faster ignores knockdowns
2008-04-23
Info/Broken? - Study: Subprime mortgage modification efforts underwhelming
Discuss - Study: Subprime mortgage modification efforts underwhelming
Study: Subprime mortgage modification efforts underwhelming
2008-04-22
Info/Broken? - Prof. Shiller: house prices may fall more than after Great Depression - Timothy Warren, Warren Group: "I don't think we're in for something quite like that" - Mel Martocchia, Waltham Realtor: 15% additional drop in prices "doesn't make any sense to me"
Discuss - Prof. Shiller: house prices may fall more than after Great Depression - Timothy Warren, Warren Group: "I don't think we're in for something quite like that" - Mel Martocchia, Waltham Realtor: 15% additional drop in prices "doesn't make any sense to me"
Prof. Shiller: house prices may fall more than after Great Depression - Timothy Warren, Warren Group: "I don't think we're in for something quite like that" - Mel Martocchia, Waltham Realtor: 15% additional drop in prices "doesn't make any sense to me"
2008-04-22
Info/Broken? - New construction up for auction - The Village at Bedford Woods and Concord Commons
Discuss - New construction up for auction - The Village at Bedford Woods and Concord Commons
New construction up for auction - The Village at Bedford Woods and Concord Commons
2008-04-21
Info/Broken? - Lender to auction Brookline project - Longwood Towers hit by housing fall
Discuss - Lender to auction Brookline project - Longwood Towers hit by housing fall
Lender to auction Brookline project - Longwood Towers hit by housing fall
2008-04-18
Info/Broken? - Homes still too high for 'average' family
Discuss - Homes still too high for 'average' family
Homes still too high for 'average' family
2008-04-17
Info/Broken? - City Life/Vida Urbana blocks Boston area foreclosure evictions with protests
Discuss - City Life/Vida Urbana blocks Boston area foreclosure evictions with protests
City Life/Vida Urbana blocks Boston area foreclosure evictions with protests
2008-04-17
Info/Broken? - Study: Foreclosures in Mass. will soar
Discuss - Study: Foreclosures in Mass. will soar
Study: Foreclosures in Mass. will soar
2008-04-17
Info/Broken? - Housing: Time to Halt Taxpayer Subsidies
Discuss - Housing: Time to Halt Taxpayer Subsidies
Housing: Time to Halt Taxpayer Subsidies
2008-04-16
Info/Broken? - Frank warns mortgage industry - Lenders to take losses if FHA refinances loans
Discuss - Frank warns mortgage industry - Lenders to take losses if FHA refinances loans
Frank warns mortgage industry - Lenders to take losses if FHA refinances loans
2008-04-16
Info/Broken? - Boston Fed exec eyes upturn - Rosengren: Fall may be the time
Discuss - Boston Fed exec eyes upturn - Rosengren: Fall may be the time
Boston Fed exec eyes upturn - Rosengren: Fall may be the time
2008-04-15
Info/Broken? - Heritage Foundation calls Barney Frank's bailout program "risky as hell"
Discuss - Heritage Foundation calls Barney Frank's bailout program "risky as hell"
Heritage Foundation calls Barney Frank's bailout program "risky as hell"
2008-04-15
Info/Broken? - Massachusetts among states with highest foreclosure rate in March
Discuss - Massachusetts among states with highest foreclosure rate in March
Massachusetts among states with highest foreclosure rate in March
2008-04-14
Info/Broken? - UCLA prof proposes $25K tax rebate for first time home buyers
Discuss - UCLA prof proposes $25K tax rebate for first time home buyers
UCLA prof proposes $25K tax rebate for first time home buyers
2008-04-14
Info/Broken? - Insurers put Mass. real estate markets on watch lists
Discuss - Insurers put Mass. real estate markets on watch lists
Insurers put Mass. real estate markets on watch lists
2008-04-14
Info/Broken? - Houses of cards - School loans, tax rates on shaky ground
Discuss - Houses of cards - School loans, tax rates on shaky ground
Houses of cards - School loans, tax rates on shaky ground
2008-04-13
Info/Broken? - Massachusetts nominal income growth by ZIP code from 2001-2005
Discuss - Massachusetts nominal income growth by ZIP code from 2001-2005
Massachusetts nominal income growth by ZIP code from 2001-2005
2008-04-13
Info/Broken? - Nonprofits to buy up foreclosed houses in Brockton
Discuss - Nonprofits to buy up foreclosed houses in Brockton
Nonprofits to buy up foreclosed houses in Brockton
2008-04-13
Info/Broken? - Falling house prices in the Boston area
Discuss - Falling house prices in the Boston area
Falling house prices in the Boston area
2008-04-13
Info/Broken? - Inside the housing scandal - Dorchester man's shady dealings leave buyers, homes ruined
Discuss - Inside the housing scandal - Dorchester man's shady dealings leave buyers, homes ruined
Inside the housing scandal - Dorchester man's shady dealings leave buyers, homes ruined
2008-04-12
Info/Broken? - Suffolk County foreclosures, March 2008
Discuss - Suffolk County foreclosures, March 2008
Suffolk County foreclosures, March 2008
2008-04-11
Info/Broken? - PMI Group lowers risk of further price declines in Boston to 20%
Discuss - PMI Group lowers risk of further price declines in Boston to 20%
PMI Group lowers risk of further price declines in Boston to 20%
2008-04-11
Info/Broken? - Commercial RE sales grind to halt - Downtown Boston sales drop 98.7% YOY
Discuss - Commercial RE sales grind to halt - Downtown Boston sales drop 98.7% YOY
Commercial RE sales grind to halt - Downtown Boston sales drop 98.7% YOY
2008-04-11
Info/Broken? - Mortgage rescue plans seen as too little, too late
Discuss - Mortgage rescue plans seen as too little, too late
Mortgage rescue plans seen as too little, too late
2008-04-11
Info/Broken? - The spin doesn't resonate this time
Discuss - The spin doesn't resonate this time
The spin doesn't resonate this time
2008-04-10
Info/Broken? - Menino testifies before Congressional committee on foreclosure
Discuss - Menino testifies before Congressional committee on foreclosure
Menino testifies before Congressional committee on foreclosure
2008-04-10
Info/Broken? - Foreclosure Crisis Sparks Arson Worries - Brockton Officials Search For Solutions
Discuss - Foreclosure Crisis Sparks Arson Worries - Brockton Officials Search For Solutions
Foreclosure Crisis Sparks Arson Worries - Brockton Officials Search For Solutions
2008-04-09
Info/Broken? - Massachusetts to create $20M fund to acquire vacant foreclosed properties
Discuss - Massachusetts to create $20M fund to acquire vacant foreclosed properties
Massachusetts to create $20M fund to acquire vacant foreclosed properties
2008-04-09
Info/Broken? - Photo gallery from foreclosure bus tour of Northborough, Shrewsbury, and Westborough
Discuss - Photo gallery from foreclosure bus tour of Northborough, Shrewsbury, and Westborough
Photo gallery from foreclosure bus tour of Northborough, Shrewsbury, and Westborough
2008-04-09
Info/Broken? - NARcasting The Future: April 2008 - Yun: "steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year"
Discuss - NARcasting The Future: April 2008 - Yun: "steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year"
NARcasting The Future: April 2008 - Yun: "steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year"
2008-04-08
Info/Broken? - US pending home sales at all-time low
Discuss - US pending home sales at all-time low
US pending home sales at all-time low
2008-04-08
Info/Broken? - State pulls $10m slated for Columbus Center - May be death knell for project
Discuss - State pulls $10m slated for Columbus Center - May be death knell for project
State pulls $10m slated for Columbus Center - May be death knell for project
2008-04-07
Info/Broken? - Boston Fed's Rosengren Surprised Housing Market Hasn't Bounced
Discuss - Boston Fed's Rosengren Surprised Housing Market Hasn't Bounced
Boston Fed's Rosengren Surprised Housing Market Hasn't Bounced
2008-04-07
Info/Broken? - Rep. Frank on On Point (WBUR) today at 10 to talk about his bailout
Discuss - Rep. Frank on On Point (WBUR) today at 10 to talk about his bailout
Rep. Frank on On Point (WBUR) today at 10 to talk about his bailout
2008-04-06
Info/Broken? - Home foreclosure figures remain grim
Discuss - Home foreclosure figures remain grim
Home foreclosure figures remain grim
2008-04-06
Info/Broken? - Bracing for tough times - Network of industries linked to home construction and repair affected by recessionary climate
Discuss - Bracing for tough times - Network of industries linked to home construction and repair affected by recessionary climate
Bracing for tough times - Network of industries linked to home construction and repair affected by recessionary climate
2008-04-06
Info/Broken? - Bayview Financial mortgage lender cuts Hub offices
Discuss - Bayview Financial mortgage lender cuts Hub offices
Bayview Financial mortgage lender cuts Hub offices
2008-04-04
Info/Broken? - Globe compilation of haikus about mortgages
Discuss - Globe compilation of haikus about mortgages
Globe compilation of haikus about mortgages
2008-04-04
Info/Broken? - Kerry seeks $10B to bail banks and lenders out of low quality loans, ostensibly to help homeowners
Discuss - Kerry seeks $10B to bail banks and lenders out of low quality loans, ostensibly to help homeowners
Kerry seeks $10B to bail banks and lenders out of low quality loans, ostensibly to help homeowners
2008-04-03
Info/Broken? - Massachusetts could get $211 million in mortgage help
Discuss - Massachusetts could get $211 million in mortgage help
Massachusetts could get $211 million in mortgage help
2008-04-03
Info/Broken? - Trolling for treasures in foreclosure wreckage - Bus tours tap into area's growing market of bank-seized homes
Discuss - Trolling for treasures in foreclosure wreckage - Bus tours tap into area's growing market of bank-seized homes
Trolling for treasures in foreclosure wreckage - Bus tours tap into area's growing market of bank-seized homes
2008-04-03
Info/Broken? - Boston mortgage broker charged with using false documents - Woman jailed after being found in Norwood hotel
Discuss - Boston mortgage broker charged with using false documents - Woman jailed after being found in Norwood hotel
Boston mortgage broker charged with using false documents - Woman jailed after being found in Norwood hotel
2008-04-02
Info/Broken? - 7% of MA SFH sales in Jan & Feb were foreclosure resales, up from 2% last year
Discuss - 7% of MA SFH sales in Jan & Feb were foreclosure resales, up from 2% last year
7% of MA SFH sales in Jan & Feb were foreclosure resales, up from 2% last year
2008-04-02
Info/Broken? - Self proclaimed "bank terrorist" named 2007 "Bostonian of the Year" by Globe
Discuss - Self proclaimed "bank terrorist" named 2007 "Bostonian of the Year" by Globe
Self proclaimed "bank terrorist" named 2007 "Bostonian of the Year" by Globe
2008-04-02
Info/Broken? - Report from Warren Group's "Foreclosure Aftershock" seminar
Discuss - Report from Warren Group's "Foreclosure Aftershock" seminar
Report from Warren Group's "Foreclosure Aftershock" seminar
2008-04-02
Info/Broken? - Editorial: Proposed legislative 'fixes' are no answers to mortgage crisis
Discuss - Editorial: Proposed legislative 'fixes' are no answers to mortgage crisis
Editorial: Proposed legislative 'fixes' are no answers to mortgage crisis
2008-04-02
Info/Broken? - The tax code as one cause of the housing bubble - Expensive Boston area homes sold more frequently after 1997 changes
Discuss - The tax code as one cause of the housing bubble - Expensive Boston area homes sold more frequently after 1997 changes
The tax code as one cause of the housing bubble - Expensive Boston area homes sold more frequently after 1997 changes
2008-04-01
Info/Broken? - Flippers still at it in Waltham
Discuss - Flippers still at it in Waltham
Flippers still at it in Waltham
2008-04-01
Info/Broken? - 2008: Most Mass. foreclosures ever?
Discuss - 2008: Most Mass. foreclosures ever?
2008: Most Mass. foreclosures ever?
2008-04-01
Info/Broken? - Foreclosure rate triples on the Cape
Discuss - Foreclosure rate triples on the Cape
Foreclosure rate triples on the Cape
2008-04-01
Info/Broken? - Multi-family homes hit hard by foreclosures
Discuss - Multi-family homes hit hard by foreclosures
Multi-family homes hit hard by foreclosures

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