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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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2009-02-27
Info/Broken? - S&P/Case-Shiller Boston Snapshot: Feb 24, 2009 - Futures through 2013 Q3
Discuss - S&P/Case-Shiller Boston Snapshot: Feb 24, 2009 - Futures through 2013 Q3
S&P/Case-Shiller Boston Snapshot: Feb 24, 2009 - Futures through 2013 Q3
2009-02-27
Info/Broken? - Boston Bubble Brief, Jan 2009: 18.32% real YOY decline is largest on record for MA SFH
Discuss - Boston Bubble Brief, Jan 2009: 18.32% real YOY decline is largest on record for MA SFH
Boston Bubble Brief, Jan 2009: 18.32% real YOY decline is largest on record for MA SFH
2009-02-27
Info/Broken? - Luxury buyers wary in Boston condo market
Discuss - Luxury buyers wary in Boston condo market
Luxury buyers wary in Boston condo market
2009-02-27
Info/Broken? - Obama to cut mortgage interest deduction for high-income households
Discuss - Obama to cut mortgage interest deduction for high-income households
Obama to cut mortgage interest deduction for high-income households
2009-02-26
Info/Broken? - RECafe Poll: How will tax increase on wealthy households impact luxury housing?
Discuss - RECafe Poll: How will tax increase on wealthy households impact luxury housing?
RECafe Poll: How will tax increase on wealthy households impact luxury housing?
2009-02-26
Info/Broken? - Comparison of price changes in various cities since 2000
Discuss - Comparison of price changes in various cities since 2000
Comparison of price changes in various cities since 2000
2009-02-26
Info/Broken? - Boston area cities, towns, and neighborhoods with most price reductions, Feb 2009 edition
Discuss - Boston area cities, towns, and neighborhoods with most price reductions, Feb 2009 edition
Boston area cities, towns, and neighborhoods with most price reductions, Feb 2009 edition
2009-02-25
Info/Broken? - Beantown Bust: Boston CSI and RPX December 2008
Discuss - Beantown Bust: Boston CSI and RPX December 2008
Beantown Bust: Boston CSI and RPX December 2008
2009-02-25
Info/Broken? - House sales battered again in January - Condominium deals hit lowest point in 17 years
Discuss - House sales battered again in January - Condominium deals hit lowest point in 17 years
House sales battered again in January - Condominium deals hit lowest point in 17 years
2009-02-25
Info/Broken? - Crashachusetts Existing Home Sales and Prices: January 2009
Discuss - Crashachusetts Existing Home Sales and Prices: January 2009
Crashachusetts Existing Home Sales and Prices: January 2009
2009-02-25
Info/Broken? - Potential "Bubble Hour" online chat or live meet-up this week to discuss plummeting sales and prices
Discuss - Potential "Bubble Hour" online chat or live meet-up this week to discuss plummeting sales and prices
Potential "Bubble Hour" online chat or live meet-up this week to discuss plummeting sales and prices
2009-02-24
Info/Broken? - Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions
Discuss - Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions
Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions
2009-02-24
Info/Broken? - Daniel Gross: The villains of the financial catastrophe aren't criminals. They're morons.
Discuss - Daniel Gross: The villains of the financial catastrophe aren't criminals. They're morons.
Daniel Gross: The villains of the financial catastrophe aren't criminals. They're morons.
2009-02-24
Info/Broken? - US S&P/Case-Shiller posts record nominal drop of 18.5% YOY in Dec 2008
Discuss - US S&P/Case-Shiller posts record nominal drop of 18.5% YOY in Dec 2008
US S&P/Case-Shiller posts record nominal drop of 18.5% YOY in Dec 2008
2009-02-24
Info/Broken? - Warren Group on Jan 2009 vs Jan 2008: MA SFH nominal median falls 20%
Discuss - Warren Group on Jan 2009 vs Jan 2008: MA SFH nominal median falls 20%
Warren Group on Jan 2009 vs Jan 2008: MA SFH nominal median falls 20%
2009-02-23
Info/Broken? - MA Jan 2009 vs Jan 2008 (nominal): SFH median falls 17.9%, condo median plummets 26.1%
Discuss - MA Jan 2009 vs Jan 2008 (nominal): SFH median falls 17.9%, condo median plummets 26.1%
MA Jan 2009 vs Jan 2008 (nominal): SFH median falls 17.9%, condo median plummets 26.1%
2009-02-23
Info/Broken? - Bailout lament: What about me? Many who played by rules see unfairness
Discuss - Bailout lament: What about me? Many who played by rules see unfairness
Bailout lament: What about me? Many who played by rules see unfairness
2009-02-23
Info/Broken? - Mortgage equity withdrawals and public policy moving forward
Discuss - Mortgage equity withdrawals and public policy moving forward
Mortgage equity withdrawals and public policy moving forward
2009-02-20
Info/Broken? - Boston-Quincy ranked 168/222 in list of affordability
Discuss - Boston-Quincy ranked 168/222 in list of affordability
Boston-Quincy ranked 168/222 in list of affordability
2009-02-20
Info/Broken? - Petition to add transparency and community betterment to Obama's plan
Discuss - Petition to add transparency and community betterment to Obama's plan
Petition to add transparency and community betterment to Obama's plan
2009-02-20
Info/Broken? - About 25% of Boston-area borrowers would meet debt-to-value criteria of Obama's plan
Discuss - About 25% of Boston-area borrowers would meet debt-to-value criteria of Obama's plan
About 25% of Boston-area borrowers would meet debt-to-value criteria of Obama's plan
2009-02-20
Info/Broken? - Inventory is down, but so are sales
Discuss - Inventory is down, but so are sales
Inventory is down, but so are sales
2009-02-19
Info/Broken? - Mass. foreclosure deeds jumped 21.8% in January
Discuss - Mass. foreclosure deeds jumped 21.8% in January
Mass. foreclosure deeds jumped 21.8% in January
2009-02-19
Info/Broken? - State, industry leaders in effort to rebrand technology sector
Discuss - State, industry leaders in effort to rebrand technology sector
State, industry leaders in effort to rebrand technology sector
2009-02-18
Info/Broken? - Patrick: State to get $6B-$9B from stimulus
Discuss - Patrick: State to get $6B-$9B from stimulus
Patrick: State to get $6B-$9B from stimulus
2009-02-17
Info/Broken? - Sales in Waterdown down around 20%
Discuss - Sales in Waterdown down around 20%
Sales in Waterdown down around 20%
2009-02-16
Info/Broken? - Harvard University to Offer Buyouts to 1,600 Workers
Discuss - Harvard University to Offer Buyouts to 1,600 Workers
Harvard University to Offer Buyouts to 1,600 Workers
2009-02-16
Info/Broken? - City of Boston puts money where its blight is
Discuss - City of Boston puts money where its blight is
City of Boston puts money where its blight is
2009-02-16
Info/Broken? - Low-cost rental units in Clarendon luxury tower
Discuss - Low-cost rental units in Clarendon luxury tower
Low-cost rental units in Clarendon luxury tower
2009-02-13
Info/Broken? - How will Newton prices change in 2009?
Discuss - How will Newton prices change in 2009?
How will Newton prices change in 2009?
2009-02-13
Info/Broken? - Pace of city condo sales cools down - High-profile projects sell about 1 unit per month
Discuss - Pace of city condo sales cools down - High-profile projects sell about 1 unit per month
Pace of city condo sales cools down - High-profile projects sell about 1 unit per month
2009-02-13
Info/Broken? - South Shore communities feeling sharp labor pains
Discuss - South Shore communities feeling sharp labor pains
South Shore communities feeling sharp labor pains
2009-02-12
Info/Broken? - Bankruptcy Filings In Massachusetts Jump 41% In 2008
Discuss - Bankruptcy Filings In Massachusetts Jump 41% In 2008
Bankruptcy Filings In Massachusetts Jump 41% In 2008
2009-02-12
Info/Broken? - AIG Implodes: The Two Cows Version
Discuss - AIG Implodes: The Two Cows Version
AIG Implodes: The Two Cows Version
2009-02-11
Info/Broken? - Layoffs on way at Charles River, Forrester, Sensata
Discuss - Layoffs on way at Charles River, Forrester, Sensata
Layoffs on way at Charles River, Forrester, Sensata
2009-02-11
Info/Broken? - Boston rents down 2.8%, vacancy rate up to 6.0%
Discuss - Boston rents down 2.8%, vacancy rate up to 6.0%
Boston rents down 2.8%, vacancy rate up to 6.0%
2009-02-11
Info/Broken? - 2008 MAR Study
Discuss - 2008 MAR Study
2008 MAR Study
2009-02-11
Info/Broken? - CNBC "House of Cards" explores origins of economic crisis, premiers Feb 12
Discuss - CNBC "House of Cards" explores origins of economic crisis, premiers Feb 12
CNBC "House of Cards" explores origins of economic crisis, premiers Feb 12
2009-02-11
Info/Broken? - Stimulus bill funds Massachusetts roads, transit, housing
Discuss - Stimulus bill funds Massachusetts roads, transit, housing
Stimulus bill funds Massachusetts roads, transit, housing
2009-02-10
Info/Broken? - Redfin: The Best Boston Real Estate Blogs (Thanks!)
Discuss - Redfin: The Best Boston Real Estate Blogs (Thanks!)
Redfin: The Best Boston Real Estate Blogs (Thanks!)
2009-02-10
Info/Broken? - Mass. sellers find sweetener needed - Survey says more homeowners are cutting prices
Discuss - Mass. sellers find sweetener needed - Survey says more homeowners are cutting prices
Mass. sellers find sweetener needed - Survey says more homeowners are cutting prices
2009-02-10
Info/Broken? - Hancock tower faces foreclosure - Lenders planning March 31 auction
Discuss - Hancock tower faces foreclosure - Lenders planning March 31 auction
Hancock tower faces foreclosure - Lenders planning March 31 auction
2009-02-09
Info/Broken? - Middlesex North Registry of Deeds Jan 2008 Stats: Deeds down 6%, foreclosure deeds up 26%
Discuss - Middlesex North Registry of Deeds Jan 2008 Stats: Deeds down 6%, foreclosure deeds up 26%
Middlesex North Registry of Deeds Jan 2008 Stats: Deeds down 6%, foreclosure deeds up 26%
2009-02-09
Info/Broken? - Boston area neighborhoods with biggest discounts, February edition
Discuss - Boston area neighborhoods with biggest discounts, February edition
Boston area neighborhoods with biggest discounts, February edition
2009-02-06
Info/Broken? - Struggling To Find Work in Massachusetts
Discuss - Struggling To Find Work in Massachusetts
Struggling To Find Work in Massachusetts
2009-02-05
Info/Broken? - NARcasting The Future: February 2009 - NAR already lowering 2009 estimates, past spin wildly off base
Discuss - NARcasting The Future: February 2009 - NAR already lowering 2009 estimates, past spin wildly off base
NARcasting The Future: February 2009 - NAR already lowering 2009 estimates, past spin wildly off base
2009-02-04
Info/Broken? - The Arlington Artifice: December 2008 - Sales down 20.51% in 2008, lowest since 1990, still not an exception among neighboring towns
Discuss - The Arlington Artifice: December 2008 - Sales down 20.51% in 2008, lowest since 1990, still not an exception among neighboring towns
The Arlington Artifice: December 2008 - Sales down 20.51% in 2008, lowest since 1990, still not an exception among neighboring towns
2009-02-03
Info/Broken? - Homes sold for a loss made up 32% of all Boston area sales in 2008
Discuss - Homes sold for a loss made up 32% of all Boston area sales in 2008
Homes sold for a loss made up 32% of all Boston area sales in 2008
2009-02-03
Info/Broken? - Forgotten in foreclosures, renters forced to live in decaying homes
Discuss - Forgotten in foreclosures, renters forced to live in decaying homes
Forgotten in foreclosures, renters forced to live in decaying homes
2009-02-02
Info/Broken? - "Immune Towns" - will they ever drop?
Discuss - "Immune Towns" - will they ever drop?
"Immune Towns" - will they ever drop?
2009-02-02
Info/Broken? - Foreclosure crisis hits Dorchester renters hard
Discuss - Foreclosure crisis hits Dorchester renters hard
Foreclosure crisis hits Dorchester renters hard
2009-02-02
Info/Broken? - Obama Will Require Banks to Expand Lending as Condition for Aid
Discuss - Obama Will Require Banks to Expand Lending as Condition for Aid
Obama Will Require Banks to Expand Lending as Condition for Aid

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