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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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2008-08-29
Info/Broken? - Boston Bubble Brief, Jul 2008: 15.53% real YOY decline in MA SFH median shatters previous record
Discuss - Boston Bubble Brief, Jul 2008: 15.53% real YOY decline in MA SFH median shatters previous record
Boston Bubble Brief, Jul 2008: 15.53% real YOY decline in MA SFH median shatters previous record
2008-08-28
Info/Broken? - Crashachusetts Existing Home Sales and Prices: July 2008
Discuss - Crashachusetts Existing Home Sales and Prices: July 2008
Crashachusetts Existing Home Sales and Prices: July 2008
2008-08-28
Info/Broken? - Bankruptcy filings in Mass. rise 30 percent
Discuss - Bankruptcy filings in Mass. rise 30 percent
Bankruptcy filings in Mass. rise 30 percent
2008-08-28
Info/Broken? - MIT museum explores origins of mortgages
Discuss - MIT museum explores origins of mortgages
MIT museum explores origins of mortgages
2008-08-27
Info/Broken? - S&P/Case-Shiller Boston Snapshot - Aug 26, 2008: nominal bottom moves 1 year earlier, real decline by 2012 Q3 of 36.76% from peak, 20.29% from now
Discuss - S&P/Case-Shiller Boston Snapshot - Aug 26, 2008: nominal bottom moves 1 year earlier, real decline by 2012 Q3 of 36.76% from peak, 20.29% from now
S&P/Case-Shiller Boston Snapshot - Aug 26, 2008: nominal bottom moves 1 year earlier, real decline by 2012 Q3 of 36.76% from peak, 20.29% from now
2008-08-27
Info/Broken? - Bay State home prices still sliding
Discuss - Bay State home prices still sliding
Bay State home prices still sliding
2008-08-27
Info/Broken? - Mass. banks feeling the pinch - Delinquencies up and assets fall, but some regions fare worse
Discuss - Mass. banks feeling the pinch - Delinquencies up and assets fall, but some regions fare worse
Mass. banks feeling the pinch - Delinquencies up and assets fall, but some regions fare worse
2008-08-26
Info/Broken? - July 2008 MA SFH nominal median YOY changes: MAR down 10.7%, Warren Group down 12.3%
Discuss - July 2008 MA SFH nominal median YOY changes: MAR down 10.7%, Warren Group down 12.3%
July 2008 MA SFH nominal median YOY changes: MAR down 10.7%, Warren Group down 12.3%
2008-08-26
Info/Broken? - June 2008 Case Shiller Boston Index down 5.2% nominally YOY (PDF)
Discuss - June 2008 Case Shiller Boston Index down 5.2% nominally YOY (PDF)
June 2008 Case Shiller Boston Index down 5.2% nominally YOY (PDF)
2008-08-25
Info/Broken? - US Housing: Frank talk from Barney Frank
Discuss - US Housing: Frank talk from Barney Frank
US Housing: Frank talk from Barney Frank
2008-08-23
Info/Broken? - MA SFH July median down 10.7% nominally YOY, sales down 10%
Discuss - MA SFH July median down 10.7% nominally YOY, sales down 10%
MA SFH July median down 10.7% nominally YOY, sales down 10%
2008-08-22
Info/Broken? - Presidential Candidates Attack Each Other Over Their Houses
Discuss - Presidential Candidates Attack Each Other Over Their Houses
Presidential Candidates Attack Each Other Over Their Houses
2008-08-22
Info/Broken? - Boston Homes Sold at 95% to 98% of List for Jun 17 - Aug 17
Discuss - Boston Homes Sold at 95% to 98% of List for Jun 17 - Aug 17
Boston Homes Sold at 95% to 98% of List for Jun 17 - Aug 17
2008-08-21
Info/Broken? - State Street Sued over Mortgage-Backed Investments
Discuss - State Street Sued over Mortgage-Backed Investments
State Street Sued over Mortgage-Backed Investments
2008-08-20
Info/Broken? - US home building at 17-year low
Discuss - US home building at 17-year low
US home building at 17-year low
2008-08-19
Info/Broken? - The upside of home foreclosure - Buyer gets a bargain, hope replaces blight
Discuss - The upside of home foreclosure - Buyer gets a bargain, hope replaces blight
The upside of home foreclosure - Buyer gets a bargain, hope replaces blight
2008-08-19
Info/Broken? - Mortgage Specialists charged with fraud settles in NH, Mass.
Discuss - Mortgage Specialists charged with fraud settles in NH, Mass.
Mortgage Specialists charged with fraud settles in NH, Mass.
2008-08-18
Info/Broken? - Free online directory to new housing law (HR3221)
Discuss - Free online directory to new housing law (HR3221)
Free online directory to new housing law (HR3221)
2008-08-17
Info/Broken? - Condo auctions skyrocket - Foreclosures triple in cities north of Boston
Discuss - Condo auctions skyrocket - Foreclosures triple in cities north of Boston
Condo auctions skyrocket - Foreclosures triple in cities north of Boston
2008-08-17
Info/Broken? - Fishy second-home loans hit Dorchester
Discuss - Fishy second-home loans hit Dorchester
Fishy second-home loans hit Dorchester
2008-08-17
Info/Broken? - Property tax bills climb as values dip
Discuss - Property tax bills climb as values dip
Property tax bills climb as values dip
2008-08-15
Info/Broken? - Stagflation comes to Massachusetts - 3000 job cuts in July follow reports of high inflation
Discuss - Stagflation comes to Massachusetts - 3000 job cuts in July follow reports of high inflation
Stagflation comes to Massachusetts - 3000 job cuts in July follow reports of high inflation
2008-08-14
Info/Broken? - Greater Boston inflation up 6.3%, highest since 1990, biggest metro increase in US
Discuss - Greater Boston inflation up 6.3%, highest since 1990, biggest metro increase in US
Greater Boston inflation up 6.3%, highest since 1990, biggest metro increase in US
2008-08-14
Info/Broken? - Inflation surges by 5.6%, highest since 1991
Discuss - Inflation surges by 5.6%, highest since 1991
Inflation surges by 5.6%, highest since 1991
2008-08-14
Info/Broken? - Using Futures To Hedge Your House
Discuss - Using Futures To Hedge Your House
Using Futures To Hedge Your House
2008-08-13
Info/Broken? - Hundreds flock to Gillette Stadium seeking mortgage relief
Discuss - Hundreds flock to Gillette Stadium seeking mortgage relief
Hundreds flock to Gillette Stadium seeking mortgage relief
2008-08-12
Info/Broken? - Zillow: One Third of New Owners Owe More Than House Is Worth
Discuss - Zillow: One Third of New Owners Owe More Than House Is Worth
Zillow: One Third of New Owners Owe More Than House Is Worth
2008-08-12
Info/Broken? - WBUR interview with Martin Feldstein on economic outlook
Discuss - WBUR interview with Martin Feldstein on economic outlook
WBUR interview with Martin Feldstein on economic outlook
2008-08-11
Info/Broken? - Low hopes on high end - In a down market, big houses with big price tags are a particularly tough sell
Discuss - Low hopes on high end - In a down market, big houses with big price tags are a particularly tough sell
Low hopes on high end - In a down market, big houses with big price tags are a particularly tough sell
2008-08-09
Info/Broken? - Hub Fed chief gloomy - Doesn't see recovery until 2009
Discuss - Hub Fed chief gloomy - Doesn't see recovery until 2009
Hub Fed chief gloomy - Doesn't see recovery until 2009
2008-08-08
Info/Broken? - Shiller (video) interview on upcoming book: The Subprime Solution
Discuss - Shiller (video) interview on upcoming book: The Subprime Solution
Shiller (video) interview on upcoming book: The Subprime Solution
2008-08-08
Info/Broken? - Realtor ranks down ~10% in MA.  Where are they now? (Video)
Discuss - Realtor ranks down ~10% in MA.  Where are they now? (Video)
Realtor ranks down ~10% in MA. Where are they now? (Video)
2008-08-08
Info/Broken? - NARcasting The Future: August 2008
Discuss - NARcasting The Future: August 2008
NARcasting The Future: August 2008
2008-08-07
Info/Broken? - Home price to income ratio by zip code
Discuss - Home price to income ratio by zip code
Home price to income ratio by zip code
2008-08-07
Info/Broken? - Boston aims to finance, fix up foreclosures
Discuss - Boston aims to finance, fix up foreclosures
Boston aims to finance, fix up foreclosures
2008-08-06
Info/Broken? - Palmer Cove Condos on edge of foreclosure
Discuss - Palmer Cove Condos on edge of foreclosure
Palmer Cove Condos on edge of foreclosure
2008-08-06
Info/Broken? - Consumer, business confidence plummets in Massachusetts
Discuss - Consumer, business confidence plummets in Massachusetts
Consumer, business confidence plummets in Massachusetts
2008-08-06
Info/Broken? - Back Bay Foreclosures in Our Future?
Discuss - Back Bay Foreclosures in Our Future?
Back Bay Foreclosures in Our Future?
2008-08-06
Info/Broken? - Maine foreclosures up 2,257% from last year
Discuss - Maine foreclosures up 2,257% from last year
Maine foreclosures up 2,257% from last year
2008-08-05
Info/Broken? - The Arlington Artifice: June 2008 - Lowest sales since 1990
Discuss - The Arlington Artifice: June 2008 - Lowest sales since 1990
The Arlington Artifice: June 2008 - Lowest sales since 1990
2008-08-05
Info/Broken? - Boston-area couple seeks class-action suit against WaMu for unresponsiveness when attempting to renegotiate mortgage
Discuss - Boston-area couple seeks class-action suit against WaMu for unresponsiveness when attempting to renegotiate mortgage
Boston-area couple seeks class-action suit against WaMu for unresponsiveness when attempting to renegotiate mortgage
2008-08-05
Info/Broken? - Realtors laud tax credit - Herald echos: $7,500 credit may kick-start market
Discuss - Realtors laud tax credit - Herald echos: $7,500 credit may kick-start market
Realtors laud tax credit - Herald echos: $7,500 credit may kick-start market
2008-08-05
Info/Broken? - Radar Logic May 2008 (PDF): Boston PPSF down 7.8% YOY nominally
Discuss - Radar Logic May 2008 (PDF): Boston PPSF down 7.8% YOY nominally
Radar Logic May 2008 (PDF): Boston PPSF down 7.8% YOY nominally
2008-08-04
Info/Broken? - Boston's Chinatown rated #2 most over priced zip code by Forbes
Discuss - Boston's Chinatown rated #2 most over priced zip code by Forbes
Boston's Chinatown rated #2 most over priced zip code by Forbes
2008-08-04
Info/Broken? - MA expired, canceled & temporarily withdrawn listings set new record
Discuss - MA expired, canceled & temporarily withdrawn listings set new record
MA expired, canceled & temporarily withdrawn listings set new record
2008-08-04
Info/Broken? - Professor Karl Case lays out his reasons for optimism (relatively speaking)
Discuss - Professor Karl Case lays out his reasons for optimism (relatively speaking)
Professor Karl Case lays out his reasons for optimism (relatively speaking)
2008-08-01
Info/Broken? - Boston Bubble Brief, Jun 2008: MA SFH median posts 3 full years of declines, real prices 20.58% below peak, 12.37% below Jun 2007
Discuss - Boston Bubble Brief, Jun 2008: MA SFH median posts 3 full years of declines, real prices 20.58% below peak, 12.37% below Jun 2007
Boston Bubble Brief, Jun 2008: MA SFH median posts 3 full years of declines, real prices 20.58% below peak, 12.37% below Jun 2007
2008-08-01
Info/Broken? - Middlesex North Registry of Deeds July 2008 Recording Stats: mortgages down 32% YOY, deeds down 10% YOY
Discuss - Middlesex North Registry of Deeds July 2008 Recording Stats: mortgages down 32% YOY, deeds down 10% YOY
Middlesex North Registry of Deeds July 2008 Recording Stats: mortgages down 32% YOY, deeds down 10% YOY
2008-08-01
Info/Broken? - Lender cuts Mass. deal over subprime mortgages
Discuss - Lender cuts Mass. deal over subprime mortgages
Lender cuts Mass. deal over subprime mortgages

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