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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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2008-06-30
Info/Broken? - Mass. foreclosure deeds set another record in May
Discuss - Mass. foreclosure deeds set another record in May
Mass. foreclosure deeds set another record in May
2008-06-30
Info/Broken? - Middlesex North Registry of Deeds (Almost) End of Month Stats
Discuss - Middlesex North Registry of Deeds (Almost) End of Month Stats
Middlesex North Registry of Deeds (Almost) End of Month Stats
2008-06-30
Info/Broken? - Worcester seeks home-rule foreclosure law
Discuss - Worcester seeks home-rule foreclosure law
Worcester seeks home-rule foreclosure law
2008-06-27
Info/Broken? - Boston Bubble Brief, May 2008: SFH real median down 12.90% YOY, lowest May on record, largest decline on record
Discuss - Boston Bubble Brief, May 2008: SFH real median down 12.90% YOY, lowest May on record, largest decline on record
Boston Bubble Brief, May 2008: SFH real median down 12.90% YOY, lowest May on record, largest decline on record
2008-06-26
Info/Broken? - Commonly offered reasons for Mass. exodus questioned - housing more of a problem than taxes and politics
Discuss - Commonly offered reasons for Mass. exodus questioned - housing more of a problem than taxes and politics
Commonly offered reasons for Mass. exodus questioned - housing more of a problem than taxes and politics
2008-06-25
Info/Broken? - Worcester council wants 6-month freeze on foreclosures
Discuss - Worcester council wants 6-month freeze on foreclosures
Worcester council wants 6-month freeze on foreclosures
2008-06-24
Info/Broken? - S&P/Case-Shiller Boston Index down nominal 6.44% YOY in April
Discuss - S&P/Case-Shiller Boston Index down nominal 6.44% YOY in April
S&P/Case-Shiller Boston Index down nominal 6.44% YOY in April
2008-06-24
Info/Broken? - Crashachusetts Existing Home Sales and Prices: May 2008
Discuss - Crashachusetts Existing Home Sales and Prices: May 2008
Crashachusetts Existing Home Sales and Prices: May 2008
2008-06-24
Info/Broken? - Foreclosures on Cape reached highest level in at least 14 years in May
Discuss - Foreclosures on Cape reached highest level in at least 14 years in May
Foreclosures on Cape reached highest level in at least 14 years in May
2008-06-24
Info/Broken? - State home sales decline in May - Tally hits 18-year low; prices drop 8.6% so far in '08
Discuss - State home sales decline in May - Tally hits 18-year low; prices drop 8.6% so far in '08
State home sales decline in May - Tally hits 18-year low; prices drop 8.6% so far in '08
2008-06-23
Info/Broken? - Bank of America flipping Countrywide with help of Dodd, after Dodd received preferential treatment on his own mortgage and contributions
Discuss - Bank of America flipping Countrywide with help of Dodd, after Dodd received preferential treatment on his own mortgage and contributions
Bank of America flipping Countrywide with help of Dodd, after Dodd received preferential treatment on his own mortgage and contributions
2008-06-23
Info/Broken? - MAR confirms nominal 9.2% YOY fall of May SFH median, volume down 10.1%
Discuss - MAR confirms nominal 9.2% YOY fall of May SFH median, volume down 10.1%
MAR confirms nominal 9.2% YOY fall of May SFH median, volume down 10.1%
2008-06-23
Info/Broken? - Multi-family, multi-woes - Housing crisis hits hard among owners of three-deckers
Discuss - Multi-family, multi-woes - Housing crisis hits hard among owners of three-deckers
Multi-family, multi-woes - Housing crisis hits hard among owners of three-deckers
2008-06-23
Info/Broken? - Housing slump hits hard - Harvard Report: 'Worst in 50 years'
Discuss - Housing slump hits hard - Harvard Report: 'Worst in 50 years'
Housing slump hits hard - Harvard Report: 'Worst in 50 years'
2008-06-20
Info/Broken? - MA SFH May 2008: nominal median down 9.2% YOY, sales down 10.1%
Discuss - MA SFH May 2008: nominal median down 9.2% YOY, sales down 10.1%
MA SFH May 2008: nominal median down 9.2% YOY, sales down 10.1%
2008-06-20
Info/Broken? - Mortgage bailout bill gets far worse: broad electronic transaction reporting slipped in at last moment
Discuss - Mortgage bailout bill gets far worse: broad electronic transaction reporting slipped in at last moment
Mortgage bailout bill gets far worse: broad electronic transaction reporting slipped in at last moment
2008-06-20
Info/Broken? - Mortgage relief initiative expands and evolves
Discuss - Mortgage relief initiative expands and evolves
Mortgage relief initiative expands and evolves
2008-06-19
Info/Broken? - Middlesex North Registry of Deeds: Executions up 30% for 2008 vs 2007, Jan - May
Discuss - Middlesex North Registry of Deeds: Executions up 30% for 2008 vs 2007, Jan - May
Middlesex North Registry of Deeds: Executions up 30% for 2008 vs 2007, Jan - May
2008-06-18
Info/Broken? - Economists mirror consumer survey: "Housing prices apt to fall much more"
Discuss - Economists mirror consumer survey: "Housing prices apt to fall much more"
Economists mirror consumer survey: "Housing prices apt to fall much more"
2008-06-18
Info/Broken? - Dodd revelations may hamper housing bill - Dodd received favors from Countrywide in 2003
Discuss - Dodd revelations may hamper housing bill - Dodd received favors from Countrywide in 2003
Dodd revelations may hamper housing bill - Dodd received favors from Countrywide in 2003
2008-06-17
Info/Broken? - MA house advances constraints on eminent domain
Discuss - MA house advances constraints on eminent domain
MA house advances constraints on eminent domain
2008-06-16
Info/Broken? - Sudbury man pleads guilty to bilking investors of $1.6M
Discuss - Sudbury man pleads guilty to bilking investors of $1.6M
Sudbury man pleads guilty to bilking investors of $1.6M
2008-06-16
Info/Broken? - New Law Creates Temporary Lull in Massachusetts Foreclosure Filings
Discuss - New Law Creates Temporary Lull in Massachusetts Foreclosure Filings
New Law Creates Temporary Lull in Massachusetts Foreclosure Filings
2008-06-14
Info/Broken? - HotPads.com offers rent vs. buy maps for Boston and beyond
Discuss - HotPads.com offers rent vs. buy maps for Boston and beyond
HotPads.com offers rent vs. buy maps for Boston and beyond
2008-06-13
Info/Broken? - Fed projects Mass. foreclosures - Peak no earlier than Q2 2009
Discuss - Fed projects Mass. foreclosures - Peak no earlier than Q2 2009
Fed projects Mass. foreclosures - Peak no earlier than Q2 2009
2008-06-13
Info/Broken? - Across Merrimack Valley, record number of homes lost to foreclosure
Discuss - Across Merrimack Valley, record number of homes lost to foreclosure
Across Merrimack Valley, record number of homes lost to foreclosure
2008-06-12
Info/Broken? - Boston Fed's outlook on region isn't rosy - Report: Consumers cutting their discretionary spending
Discuss - Boston Fed's outlook on region isn't rosy - Report: Consumers cutting their discretionary spending
Boston Fed's outlook on region isn't rosy - Report: Consumers cutting their discretionary spending
2008-06-11
Info/Broken? - MacroMarkets to launch exchange-traded securities with 2X leverage of housing price increases/decreases (PDF)
Discuss - MacroMarkets to launch exchange-traded securities with 2X leverage of housing price increases/decreases (PDF)
MacroMarkets to launch exchange-traded securities with 2X leverage of housing price increases/decreases (PDF)
2008-06-11
Info/Broken? - State law slashes foreclosure rate, for now
Discuss - State law slashes foreclosure rate, for now
State law slashes foreclosure rate, for now
2008-06-10
Info/Broken? - Map of Foreclosure Rates in Massachusetts Cities and Towns: 1990 - 2007
Discuss - Map of Foreclosure Rates in Massachusetts Cities and Towns: 1990 - 2007
Map of Foreclosure Rates in Massachusetts Cities and Towns: 1990 - 2007
2008-06-10
Info/Broken? - NARcasting The Future: June 2008
Discuss - NARcasting The Future: June 2008
NARcasting The Future: June 2008
2008-06-09
Info/Broken? - Angry Renter: Petition to Oppose the Mortgage Lender Housing Bailout
Discuss - Angry Renter: Petition to Oppose the Mortgage Lender Housing Bailout
Angry Renter: Petition to Oppose the Mortgage Lender Housing Bailout
2008-06-09
Info/Broken? - MA mortgage broker ranks may drop 80% from peak
Discuss - MA mortgage broker ranks may drop 80% from peak
MA mortgage broker ranks may drop 80% from peak
2008-06-09
Info/Broken? - WBUR on Bailout Backlash
Discuss - WBUR on Bailout Backlash
WBUR on Bailout Backlash
2008-06-08
Info/Broken? - Housing downturn is a boon for some renters
Discuss - Housing downturn is a boon for some renters
Housing downturn is a boon for some renters
2008-06-08
Info/Broken? - Columbus builders seek delay
Discuss - Columbus builders seek delay
Columbus builders seek delay
2008-06-06
Info/Broken? - 60,000 Massachusetts borrowers behind on mortgages in March
Discuss - 60,000 Massachusetts borrowers behind on mortgages in March
60,000 Massachusetts borrowers behind on mortgages in March
2008-06-06
Info/Broken? - Realtors' attempts to downplay S&P/Case-Shiller Index disingenuous, ignore strong correlation with other indices
Discuss - Realtors' attempts to downplay S&P/Case-Shiller Index disingenuous, ignore strong correlation with other indices
Realtors' attempts to downplay S&P/Case-Shiller Index disingenuous, ignore strong correlation with other indices
2008-06-06
Info/Broken? - More banks join New England mortgage relief effort
Discuss - More banks join New England mortgage relief effort
More banks join New England mortgage relief effort
2008-06-05
Info/Broken? - Bernanke draws 70s parallels at Harvard
Discuss - Bernanke draws 70s parallels at Harvard
Bernanke draws 70s parallels at Harvard
2008-06-05
Info/Broken? - MA builders decrying new code - Predict higher construction costs
Discuss - MA builders decrying new code - Predict higher construction costs
MA builders decrying new code - Predict higher construction costs
2008-06-05
Info/Broken? - Investor sued by MA AG in fraud case
Discuss - Investor sued by MA AG in fraud case
Investor sued by MA AG in fraud case
2008-06-04
Info/Broken? - Massachusetts AG sues Option One, H&R Block over alleged deceptive and discriminatory lending practices
Discuss - Massachusetts AG sues Option One, H&R Block over alleged deceptive and discriminatory lending practices
Massachusetts AG sues Option One, H&R Block over alleged deceptive and discriminatory lending practices
2008-06-03
Info/Broken? - Massachusetts Looks to Evaluate Lenders on Loan Modifications
Discuss - Massachusetts Looks to Evaluate Lenders on Loan Modifications
Massachusetts Looks to Evaluate Lenders on Loan Modifications
2008-06-03
Info/Broken? - Radar Logic reports 11.1% of Boston sales in March were "motivated" (resales of foreclosed properties)
Discuss - Radar Logic reports 11.1% of Boston sales in March were "motivated" (resales of foreclosed properties)
Radar Logic reports 11.1% of Boston sales in March were "motivated" (resales of foreclosed properties)
2008-06-03
Info/Broken? - Chart of falling REO prices in Massachusetts
Discuss - Chart of falling REO prices in Massachusetts
Chart of falling REO prices in Massachusetts
2008-06-03
Info/Broken? - Boston Department of Neighborhood Development starts foreclosure trolley tours
Discuss - Boston Department of Neighborhood Development starts foreclosure trolley tours
Boston Department of Neighborhood Development starts foreclosure trolley tours
2008-06-03
Info/Broken? - "Cash-outs" up foreclosures rather than subprime origination
Discuss - "Cash-outs" up foreclosures rather than subprime origination
"Cash-outs" up foreclosures rather than subprime origination
2008-06-02
Info/Broken? - Middlesex North Registry of Deeds May 2008 Stats: Foreclosures up 105%, most foreclosures ever; deeds down 24%
Discuss - Middlesex North Registry of Deeds May 2008 Stats: Foreclosures up 105%, most foreclosures ever; deeds down 24%
Middlesex North Registry of Deeds May 2008 Stats: Foreclosures up 105%, most foreclosures ever; deeds down 24%
2008-06-02
Info/Broken? - Housing woes hit multi-family owners - Values fall, rates rise
Discuss - Housing woes hit multi-family owners - Values fall, rates rise
Housing woes hit multi-family owners - Values fall, rates rise
2008-06-02
Info/Broken? - Economic forecasts for N.H., Mass.
Discuss - Economic forecasts for N.H., Mass.
Economic forecasts for N.H., Mass.

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