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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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2008-05-30
Info/Broken? - Boston Bubble Brief, Apr 2007: MA SFH real median falls 12.18% YOY, largest YOY fall on record, lowest April on record
Discuss - Boston Bubble Brief, Apr 2007: MA SFH real median falls 12.18% YOY, largest YOY fall on record, lowest April on record
Boston Bubble Brief, Apr 2007: MA SFH real median falls 12.18% YOY, largest YOY fall on record, lowest April on record
2008-05-30
Info/Broken? - The Arlington Artifice: April 2008 - still unexceptional
Discuss - The Arlington Artifice: April 2008 - still unexceptional
The Arlington Artifice: April 2008 - still unexceptional
2008-05-30
Info/Broken? - At current pace, 7 in 1000 residential properties in MA will be foreclosed this year
Discuss - At current pace, 7 in 1000 residential properties in MA will be foreclosed this year
At current pace, 7 in 1000 residential properties in MA will be foreclosed this year
2008-05-30
Info/Broken? - America's house prices are falling even faster than during the Great Depression
Discuss - America's house prices are falling even faster than during the Great Depression
America's house prices are falling even faster than during the Great Depression
2008-05-30
Info/Broken? - Massachusetts foreclosure deeds soar in April, up 187.5% YOY
Discuss - Massachusetts foreclosure deeds soar in April, up 187.5% YOY
Massachusetts foreclosure deeds soar in April, up 187.5% YOY
2008-05-29
Info/Broken? - S&P/Case-Shiller Boston Snapshot - May 27, 2008: 2012 Q3 futures price in further decline in Boston housing prices of 7.28% nominal, 20.44% real
Discuss - S&P/Case-Shiller Boston Snapshot - May 27, 2008: 2012 Q3 futures price in further decline in Boston housing prices of 7.28% nominal, 20.44% real
S&P/Case-Shiller Boston Snapshot - May 27, 2008: 2012 Q3 futures price in further decline in Boston housing prices of 7.28% nominal, 20.44% real
2008-05-28
Info/Broken? - Foreclosure court pitched for state
Discuss - Foreclosure court pitched for state
Foreclosure court pitched for state
2008-05-28
Info/Broken? - Foreclosures rival sales - In urban hot spots, numbers nearly equal
Discuss - Foreclosures rival sales - In urban hot spots, numbers nearly equal
Foreclosures rival sales - In urban hot spots, numbers nearly equal
2008-05-28
Info/Broken? - Market speaks: Mass. home values in record slide
Discuss - Market speaks: Mass. home values in record slide
Market speaks: Mass. home values in record slide
2008-05-28
Info/Broken? - Crashachusetts Existing Home Sales and Prices: April 2008
Discuss - Crashachusetts Existing Home Sales and Prices: April 2008
Crashachusetts Existing Home Sales and Prices: April 2008
2008-05-27
Info/Broken? - Time to Buy? The Conversion of a Renter
Discuss - Time to Buy? The Conversion of a Renter
Time to Buy? The Conversion of a Renter
2008-05-27
Info/Broken? - In Housing Market, Even the Strong Are Weakening
Discuss - In Housing Market, Even the Strong Are Weakening
In Housing Market, Even the Strong Are Weakening
2008-05-27
Info/Broken? - March S&P/Case-Shiller Index for Boston posts 5.92% nominal YOY decline
Discuss - March S&P/Case-Shiller Index for Boston posts 5.92% nominal YOY decline
March S&P/Case-Shiller Index for Boston posts 5.92% nominal YOY decline
2008-05-27
Info/Broken? - April MA SFH nominal median YOY changes - Warren Group: -12%, MAR: -8.7%
Discuss - April MA SFH nominal median YOY changes - Warren Group: -12%, MAR: -8.7%
April MA SFH nominal median YOY changes - Warren Group: -12%, MAR: -8.7%
2008-05-27
Info/Broken? - NPR - Trio of stories on US housing
Discuss - NPR - Trio of stories on US housing
NPR - Trio of stories on US housing
2008-05-26
Info/Broken? - Delinquent Loans Deepen For Central Mass. Banks
Discuss - Delinquent Loans Deepen For Central Mass. Banks
Delinquent Loans Deepen For Central Mass. Banks
2008-05-23
Info/Broken? - MA Apr Preview: SFH sales down 15.8% YOY, nominal prices down 8.7%
Discuss - MA Apr Preview: SFH sales down 15.8% YOY, nominal prices down 8.7%
MA Apr Preview: SFH sales down 15.8% YOY, nominal prices down 8.7%
2008-05-23
Info/Broken? - Home fairs target working-class buyers
Discuss - Home fairs target working-class buyers
Home fairs target working-class buyers
2008-05-22
Info/Broken? - OFHEO home price index posts largest-ever decline
Discuss - OFHEO home price index posts largest-ever decline
OFHEO home price index posts largest-ever decline
2008-05-22
Info/Broken? - Preliminary May foreclosure stats from Middlesex North Registry of Deeds - "turnaround for real estate is nowhere in sight"
Discuss - Preliminary May foreclosure stats from Middlesex North Registry of Deeds - "turnaround for real estate is nowhere in sight"
Preliminary May foreclosure stats from Middlesex North Registry of Deeds - "turnaround for real estate is nowhere in sight"
2008-05-21
Info/Broken? - Massachusetts regulator charges man ran fake real estate fund
Discuss - Massachusetts regulator charges man ran fake real estate fund
Massachusetts regulator charges man ran fake real estate fund
2008-05-21
Info/Broken? - Developers nix condos, build rentals in Southie
Discuss - Developers nix condos, build rentals in Southie
Developers nix condos, build rentals in Southie
2008-05-20
Info/Broken? - Litany of woes driving many residents out of Massachusetts
Discuss - Litany of woes driving many residents out of Massachusetts
Litany of woes driving many residents out of Massachusetts
2008-05-20
Info/Broken? - Surf's up, prices down - Nantucket's luxury home owners offer deals
Discuss - Surf's up, prices down - Nantucket's luxury home owners offer deals
Surf's up, prices down - Nantucket's luxury home owners offer deals
2008-05-20
Info/Broken? - Low-Income Renters to Pay for Housing Bailout
Discuss - Low-Income Renters to Pay for Housing Bailout
Low-Income Renters to Pay for Housing Bailout
2008-05-20
Info/Broken? - Frank blames Fed, Greenspan for subprime woes
Discuss - Frank blames Fed, Greenspan for subprime woes
Frank blames Fed, Greenspan for subprime woes
2008-05-19
Info/Broken? - As homes foreclose in U.S., squatters move in (Brockton used as example)
Discuss - As homes foreclose in U.S., squatters move in (Brockton used as example)
As homes foreclose in U.S., squatters move in (Brockton used as example)
2008-05-18
Info/Broken? - Report: Mass. consumer confidence at lowest point since 1991
Discuss - Report: Mass. consumer confidence at lowest point since 1991
Report: Mass. consumer confidence at lowest point since 1991
2008-05-18
Info/Broken? - $1M mortgage mess: No English? No income? No problem! How a single Dorchester mother in public housing got a million in mortgages
Discuss - $1M mortgage mess: No English? No income? No problem! How a single Dorchester mother in public housing got a million in mortgages
$1M mortgage mess: No English? No income? No problem! How a single Dorchester mother in public housing got a million in mortgages
2008-05-18
Info/Broken? - Nouvelle sales slowed by market, lending problems
Discuss - Nouvelle sales slowed by market, lending problems
Nouvelle sales slowed by market, lending problems
2008-05-17
Info/Broken? - 11-member ring of Boston lawyers, mortgage brokers and others arrested in mortgage fraud scam
Discuss - 11-member ring of Boston lawyers, mortgage brokers and others arrested in mortgage fraud scam
11-member ring of Boston lawyers, mortgage brokers and others arrested in mortgage fraud scam
2008-05-16
Info/Broken? - In Lowell, overall foreclosure rate has doubled in 2008 but condo foreclosure rate has tripled
Discuss - In Lowell, overall foreclosure rate has doubled in 2008 but condo foreclosure rate has tripled
In Lowell, overall foreclosure rate has doubled in 2008 but condo foreclosure rate has tripled
2008-05-16
Info/Broken? - Mass. unemployment rate falls, despite job losses
Discuss - Mass. unemployment rate falls, despite job losses
Mass. unemployment rate falls, despite job losses
2008-05-15
Info/Broken? - More square footage false advertising in Boston area
Discuss - More square footage false advertising in Boston area
More square footage false advertising in Boston area
2008-05-15
Info/Broken? - Boston Still Busting After All These Years - A graphical comparison to previous bust
Discuss - Boston Still Busting After All These Years - A graphical comparison to previous bust
Boston Still Busting After All These Years - A graphical comparison to previous bust
2008-05-14
Info/Broken? - Boston Fed chief: Wall Street underestimated subprime risks
Discuss - Boston Fed chief: Wall Street underestimated subprime risks
Boston Fed chief: Wall Street underestimated subprime risks
2008-05-14
Info/Broken? - Boston area auction by Calif. firm (REDC) hits snag again - Bidder says foreclosure was incomplete for home on the block
Discuss - Boston area auction by Calif. firm (REDC) hits snag again - Bidder says foreclosure was incomplete for home on the block
Boston area auction by Calif. firm (REDC) hits snag again - Bidder says foreclosure was incomplete for home on the block
2008-05-14
Info/Broken? - Feds laud Hub efforts - Menino's foreclosure crisis efforts called "very effective"
Discuss - Feds laud Hub efforts - Menino's foreclosure crisis efforts called "very effective"
Feds laud Hub efforts - Menino's foreclosure crisis efforts called "very effective"
2008-05-13
Info/Broken? - Toney town's mansion sales tank - With 30 percent drop, sellers bargain to make deals
Discuss - Toney town's mansion sales tank - With 30 percent drop, sellers bargain to make deals
Toney town's mansion sales tank - With 30 percent drop, sellers bargain to make deals
2008-05-13
Info/Broken? - Trying to Avoid Foreclosure
Discuss - Trying to Avoid Foreclosure
Trying to Avoid Foreclosure
2008-05-12
Info/Broken? - Lenders offer little help in foreclosures - Companies ill-equipped to handle surge of distressed homeowners
Discuss - Lenders offer little help in foreclosures - Companies ill-equipped to handle surge of distressed homeowners
Lenders offer little help in foreclosures - Companies ill-equipped to handle surge of distressed homeowners
2008-05-12
Info/Broken? - The furry faces of foreclosure
Discuss - The furry faces of foreclosure
The furry faces of foreclosure
2008-05-10
Info/Broken? - In mortgage market, "walkaway" homeowners may be urban myth
Discuss - In mortgage market, "walkaway" homeowners may be urban myth
In mortgage market, "walkaway" homeowners may be urban myth
2008-05-09
Info/Broken? - NorthPoint buyer quits deal - Other bidders eye 40-acre project site
Discuss - NorthPoint buyer quits deal - Other bidders eye 40-acre project site
NorthPoint buyer quits deal - Other bidders eye 40-acre project site
2008-05-09
Info/Broken? - Professor Case: Real estate market ready for rebound
Discuss - Professor Case: Real estate market ready for rebound
Professor Case: Real estate market ready for rebound
2008-05-08
Info/Broken? - The Back Bay Bubble - List Price vs. Past Sales
Discuss - The Back Bay Bubble - List Price vs. Past Sales
The Back Bay Bubble - List Price vs. Past Sales
2008-05-08
Info/Broken? - The Economist: American housing - Map of misery
Discuss - The Economist: American housing - Map of misery
The Economist: American housing - Map of misery
2008-05-08
Info/Broken? - Foreclosures soaring in some of Massachusetts' wealthiest towns
Discuss - Foreclosures soaring in some of Massachusetts' wealthiest towns
Foreclosures soaring in some of Massachusetts' wealthiest towns
2008-05-08
Info/Broken? - Foreclosures hurt many renters, study says
Discuss - Foreclosures hurt many renters, study says
Foreclosures hurt many renters, study says
2008-05-08
Info/Broken? - Bush threatens to veto Barney Frank's housing bailout bill
Discuss - Bush threatens to veto Barney Frank's housing bailout bill
Bush threatens to veto Barney Frank's housing bailout bill
2008-05-08
Info/Broken? - NARcasting The Future: May 2008 - Yun predicts US prices to fall 2.4% in 2008
Discuss - NARcasting The Future: May 2008 - Yun predicts US prices to fall 2.4% in 2008
NARcasting The Future: May 2008 - Yun predicts US prices to fall 2.4% in 2008
2008-05-07
Info/Broken? - Mass. foreclosure activity continues to surge - Up 38% YOY in 2008 Q1
Discuss - Mass. foreclosure activity continues to surge - Up 38% YOY in 2008 Q1
Mass. foreclosure activity continues to surge - Up 38% YOY in 2008 Q1
2008-05-07
Info/Broken? - Map of recent Boston area buyers underwater by town
Discuss - Map of recent Boston area buyers underwater by town
Map of recent Boston area buyers underwater by town
2008-05-07
Info/Broken? - David Lereah does an about face: "We're not at the bottom... This thing is going to get worse before it gets better."  However, also repeats incorrect claims that nobody saw it coming.
Discuss - David Lereah does an about face: "We're not at the bottom... This thing is going to get worse before it gets better."  However, also repeats incorrect claims that nobody saw it coming.
David Lereah does an about face: "We're not at the bottom... This thing is going to get worse before it gets better." However, also repeats incorrect claims that nobody saw it coming.
2008-05-06
Info/Broken? - Zillow: Boston nominal housing prices down 16% from peak, at 2003 levels
Discuss - Zillow: Boston nominal housing prices down 16% from peak, at 2003 levels
Zillow: Boston nominal housing prices down 16% from peak, at 2003 levels
2008-05-06
Info/Broken? - Doubts Raised on Big Backers of Mortgages, Fannie Mae and Freddie Mac
Discuss - Doubts Raised on Big Backers of Mortgages, Fannie Mae and Freddie Mac
Doubts Raised on Big Backers of Mortgages, Fannie Mae and Freddie Mac
2008-05-06
Info/Broken? - Mass. upholds ruling to halt Fremont foreclosures
Discuss - Mass. upholds ruling to halt Fremont foreclosures
Mass. upholds ruling to halt Fremont foreclosures
2008-05-06
Info/Broken? - Frank to lenders: Take losses or face stiffer regulation
Discuss - Frank to lenders: Take losses or face stiffer regulation
Frank to lenders: Take losses or face stiffer regulation
2008-05-05
Info/Broken? - Gas prices up, housing prices down
Discuss - Gas prices up, housing prices down
Gas prices up, housing prices down
2008-05-05
Info/Broken? - Nouvelle at Natick update: both sides suffering in symbiotic relationship between mall and condos
Discuss - Nouvelle at Natick update: both sides suffering in symbiotic relationship between mall and condos
Nouvelle at Natick update: both sides suffering in symbiotic relationship between mall and condos
2008-05-02
Info/Broken? - Boston Bubble Brief, Mar 2008: Record YOY decline of 11.90% in MA SFH real median, lowest March on record
Discuss - Boston Bubble Brief, Mar 2008: Record YOY decline of 11.90% in MA SFH real median, lowest March on record
Boston Bubble Brief, Mar 2008: Record YOY decline of 11.90% in MA SFH real median, lowest March on record
2008-05-02
Info/Broken? - The Arlington Artifice: March 2008 - Sales down dramatically
Discuss - The Arlington Artifice: March 2008 - Sales down dramatically
The Arlington Artifice: March 2008 - Sales down dramatically
2008-05-02
Info/Broken? - Condo sales in Boston drop off - Prices are also down in a market formerly seen as bulletproof
Discuss - Condo sales in Boston drop off - Prices are also down in a market formerly seen as bulletproof
Condo sales in Boston drop off - Prices are also down in a market formerly seen as bulletproof
2008-05-02
Info/Broken? - Middlesex North Registry of Deeds Recording Statistics April 2008 vs April 2007: deeds and mortgages both down 17%, foreclosures up 130%, orders of notice down 11%
Discuss - Middlesex North Registry of Deeds Recording Statistics April 2008 vs April 2007: deeds and mortgages both down 17%, foreclosures up 130%, orders of notice down 11%
Middlesex North Registry of Deeds Recording Statistics April 2008 vs April 2007: deeds and mortgages both down 17%, foreclosures up 130%, orders of notice down 11%
2008-05-01
Info/Broken? - Post-bubble planning: suggestions for future direction of bostonbubble.com?
Discuss - Post-bubble planning: suggestions for future direction of bostonbubble.com?
Post-bubble planning: suggestions for future direction of bostonbubble.com?
2008-05-01
Info/Broken? - Construction Slump Hits Home
Discuss - Construction Slump Hits Home
Construction Slump Hits Home
2008-05-01
Info/Broken? - New MA law extends foreclosure notification period
Discuss - New MA law extends foreclosure notification period
New MA law extends foreclosure notification period
2008-05-01
Info/Broken? - Trend of reporting that bad state-wide numbers don't apply locally runs contrary to actual data
Discuss - Trend of reporting that bad state-wide numbers don't apply locally runs contrary to actual data
Trend of reporting that bad state-wide numbers don't apply locally runs contrary to actual data
2008-05-01
Info/Broken? - President-Elect of Worcester Regional Association of Realtors: "(Veteran investors) believe we are at the bottom and are investing"
Discuss - President-Elect of Worcester Regional Association of Realtors: "(Veteran investors) believe we are at the bottom and are investing"
President-Elect of Worcester Regional Association of Realtors: "(Veteran investors) believe we are at the bottom and are investing"

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