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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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2009-03-31
Info/Broken? - Barney Frank to give talk at Harvard on April 6
Discuss - Barney Frank to give talk at Harvard on April 6
Barney Frank to give talk at Harvard on April 6
2009-03-31
Info/Broken? - Record drop in US home prices: S&P/Case-Shiller Index down 19% YOY nominally for January
Discuss - Record drop in US home prices: S&P/Case-Shiller Index down 19% YOY nominally for January
Record drop in US home prices: S&P/Case-Shiller Index down 19% YOY nominally for January
2009-03-31
Info/Broken? - South Hamilton, MA on Business Week's list of zip codes with biggest increase in listing prices
Discuss - South Hamilton, MA on Business Week's list of zip codes with biggest increase in listing prices
South Hamilton, MA on Business Week's list of zip codes with biggest increase in listing prices
2009-03-31
Info/Broken? - Motley Fool: Welcome to the Second Great Depression
Discuss - Motley Fool: Welcome to the Second Great Depression
Motley Fool: Welcome to the Second Great Depression
2009-03-31
Info/Broken? - Warren Group: MA Feb. foreclosures down 4% YOY
Discuss - Warren Group: MA Feb. foreclosures down 4% YOY
Warren Group: MA Feb. foreclosures down 4% YOY
2009-03-30
Info/Broken? - Mortgage Crisis Over? Please, It's Just Beginning
Discuss - Mortgage Crisis Over? Please, It's Just Beginning
Mortgage Crisis Over? Please, It's Just Beginning
2009-03-30
Info/Broken? - MA jobless rate may rocket up - Study sees boost to 9.1%
Discuss - MA jobless rate may rocket up - Study sees boost to 9.1%
MA jobless rate may rocket up - Study sees boost to 9.1%
2009-03-30
Info/Broken? - MA vs. RI Unemployment February 2009: MA 7.8%, RI 10.5%
Discuss - MA vs. RI Unemployment February 2009: MA 7.8%, RI 10.5%
MA vs. RI Unemployment February 2009: MA 7.8%, RI 10.5%
2009-03-30
Info/Broken? - Tax credit a boon to local realtors
Discuss - Tax credit a boon to local realtors
Tax credit a boon to local realtors
2009-03-27
Info/Broken? - Boston Bubble Brief, Feb 2009: 19.10% real YOY decline is largest on record for MA SFH
Discuss - Boston Bubble Brief, Feb 2009: 19.10% real YOY decline is largest on record for MA SFH
Boston Bubble Brief, Feb 2009: 19.10% real YOY decline is largest on record for MA SFH
2009-03-26
Info/Broken? - March Boston Area City/Neighborhood Price Reductions
Discuss - March Boston Area City/Neighborhood Price Reductions
March Boston Area City/Neighborhood Price Reductions
2009-03-26
Info/Broken? - Not enough stimulus money - 268,300 Mass. projects apply
Discuss - Not enough stimulus money - 268,300 Mass. projects apply
Not enough stimulus money - 268,300 Mass. projects apply
2009-03-25
Info/Broken? - Crashachusetts Existing Home Sales and Prices: February 2009
Discuss - Crashachusetts Existing Home Sales and Prices: February 2009
Crashachusetts Existing Home Sales and Prices: February 2009
2009-03-25
Info/Broken? - Real estate rewind - Boston's condos, houses sink to (nominal) '01 prices
Discuss - Real estate rewind - Boston's condos, houses sink to (nominal) '01 prices
Real estate rewind - Boston's condos, houses sink to (nominal) '01 prices
2009-03-25
Info/Broken? - Market throws Curt Schilling a curveball
Discuss - Market throws Curt Schilling a curveball
Market throws Curt Schilling a curveball
2009-03-24
Info/Broken? - MA SFH median Feb 2009 vs Feb 2008 - MAR: -18.5%, Warren Group: -18.3%
Discuss - MA SFH median Feb 2009 vs Feb 2008 - MAR: -18.5%, Warren Group: -18.3%
MA SFH median Feb 2009 vs Feb 2008 - MAR: -18.5%, Warren Group: -18.3%
2009-03-24
Info/Broken? - Half of Americans have one month of cash cushion if laid off
Discuss - Half of Americans have one month of cash cushion if laid off
Half of Americans have one month of cash cushion if laid off
2009-03-23
Info/Broken? - Federal funding on rise for region
Discuss - Federal funding on rise for region
Federal funding on rise for region
2009-03-21
Info/Broken? - Rethinking rent - Maybe we should stop trying to be a nation of homeowners
Discuss - Rethinking rent - Maybe we should stop trying to be a nation of homeowners
Rethinking rent - Maybe we should stop trying to be a nation of homeowners
2009-03-21
Info/Broken? - The Globe's Top Spots to Live
Discuss - The Globe's Top Spots to Live
The Globe's Top Spots to Live
2009-03-20
Info/Broken? - Rent stats for Boston area
Discuss - Rent stats for Boston area
Rent stats for Boston area
2009-03-19
Info/Broken? - Massachusetts unemployment rate jumps to 7.8%
Discuss - Massachusetts unemployment rate jumps to 7.8%
Massachusetts unemployment rate jumps to 7.8%
2009-03-19
Info/Broken? - CEOs put Mass. near bottom for business climate
Discuss - CEOs put Mass. near bottom for business climate
CEOs put Mass. near bottom for business climate
2009-03-19
Info/Broken? - Mortgage rates drop as fed opts to buy debt - Loans tie record low
Discuss - Mortgage rates drop as fed opts to buy debt - Loans tie record low
Mortgage rates drop as fed opts to buy debt - Loans tie record low
2009-03-19
Info/Broken? - Scenes from the recession
Discuss - Scenes from the recession
Scenes from the recession
2009-03-18
Info/Broken? - Boston area most-discounted neighborhoods, March update
Discuss - Boston area most-discounted neighborhoods, March update
Boston area most-discounted neighborhoods, March update
2009-03-17
Info/Broken? - Mass. plans to turn foreclosures into affordable housing
Discuss - Mass. plans to turn foreclosures into affordable housing
Mass. plans to turn foreclosures into affordable housing
2009-03-17
Info/Broken? - Faneuil Hall operator closer to bankruptcy
Discuss - Faneuil Hall operator closer to bankruptcy
Faneuil Hall operator closer to bankruptcy
2009-03-16
Info/Broken? - Job loss rate rose sharply in January - Boston-Cambridge-Quincy shed almost as many jobs in January as in all of 2008
Discuss - Job loss rate rose sharply in January - Boston-Cambridge-Quincy shed almost as many jobs in January as in all of 2008
Job loss rate rose sharply in January - Boston-Cambridge-Quincy shed almost as many jobs in January as in all of 2008
2009-03-16
Info/Broken? - China's prime minister voices concern over the outlook of US government debt
Discuss - China's prime minister voices concern over the outlook of US government debt
China's prime minister voices concern over the outlook of US government debt
2009-03-16
Info/Broken? - Construction jobs in Mass. at 10-year low
Discuss - Construction jobs in Mass. at 10-year low
Construction jobs in Mass. at 10-year low
2009-03-16
Info/Broken? - The Arlington Artifice: January 2009 - The Re-Medfordization of Arlington
Discuss - The Arlington Artifice: January 2009 - The Re-Medfordization of Arlington
The Arlington Artifice: January 2009 - The Re-Medfordization of Arlington
2009-03-16
Info/Broken? - State to get $54M for foreclosures - Fed money to target hard-hit cities
Discuss - State to get $54M for foreclosures - Fed money to target hard-hit cities
State to get $54M for foreclosures - Fed money to target hard-hit cities
2009-03-16
Info/Broken? - After $170b US bailout, AIG to pay $100m in bonuses
Discuss - After $170b US bailout, AIG to pay $100m in bonuses
After $170b US bailout, AIG to pay $100m in bonuses
2009-03-13
Info/Broken? - Boston MSA Price/Income Approximation: 1975 - 2007 (- 2013)
Discuss - Boston MSA Price/Income Approximation: 1975 - 2007 (- 2013)
Boston MSA Price/Income Approximation: 1975 - 2007 (- 2013)
2009-03-12
Info/Broken? - City to funnel stimulus cash to housing
Discuss - City to funnel stimulus cash to housing
City to funnel stimulus cash to housing
2009-03-12
Info/Broken? - Obama housing plan attempts to get second mortgages forgiven
Discuss - Obama housing plan attempts to get second mortgages forgiven
Obama housing plan attempts to get second mortgages forgiven
2009-03-12
Info/Broken? - Some Banks, Feeling Chained, Want to Return Bailout Money
Discuss - Some Banks, Feeling Chained, Want to Return Bailout Money
Some Banks, Feeling Chained, Want to Return Bailout Money
2009-03-11
Info/Broken? - Now-needy FDIC collected little in premiums
Discuss - Now-needy FDIC collected little in premiums
Now-needy FDIC collected little in premiums
2009-03-11
Info/Broken? - Boston Takes Aggressive Approach To Foreclosures
Discuss - Boston Takes Aggressive Approach To Foreclosures
Boston Takes Aggressive Approach To Foreclosures
2009-03-10
Info/Broken? - Longwood Towers owner will auction 40 luxury units
Discuss - Longwood Towers owner will auction 40 luxury units
Longwood Towers owner will auction 40 luxury units
2009-03-10
Info/Broken? - A.I.G., Where Taxpayers' Dollars Go to Die
Discuss - A.I.G., Where Taxpayers' Dollars Go to Die
A.I.G., Where Taxpayers' Dollars Go to Die
2009-03-10
Info/Broken? - The Inflection Is Near?
Discuss - The Inflection Is Near?
The Inflection Is Near?
2009-03-09
Info/Broken? - The Loss Generation - Young Americans are more cautious, less hopeful about nation's economy
Discuss - The Loss Generation - Young Americans are more cautious, less hopeful about nation's economy
The Loss Generation - Young Americans are more cautious, less hopeful about nation's economy
2009-03-09
Info/Broken? - State unveils UMass housing report
Discuss - State unveils UMass housing report
State unveils UMass housing report
2009-03-09
Info/Broken? - FHA mortgage defaults soaring - Many borrowers fail to make more than one payment
Discuss - FHA mortgage defaults soaring - Many borrowers fail to make more than one payment
FHA mortgage defaults soaring - Many borrowers fail to make more than one payment
2009-03-09
Info/Broken? - Bidders Snatch Up Foreclosed Homes At Auction
Discuss - Bidders Snatch Up Foreclosed Homes At Auction
Bidders Snatch Up Foreclosed Homes At Auction
2009-03-06
Info/Broken? - Recession slugs state - No end in sight as unemployment goes to 7.4%
Discuss - Recession slugs state - No end in sight as unemployment goes to 7.4%
Recession slugs state - No end in sight as unemployment goes to 7.4%
2009-03-06
Info/Broken? - Unemployment Mashup - MA vs. RI January 2009
Discuss - Unemployment Mashup - MA vs. RI January 2009
Unemployment Mashup - MA vs. RI January 2009
2009-03-06
Info/Broken? - How Iceland Became a Giant Hedge Fund
Discuss - How Iceland Became a Giant Hedge Fund
How Iceland Became a Giant Hedge Fund
2009-03-05
Info/Broken? - Boston Magazine's Annual Real Estate Review
Discuss - Boston Magazine's Annual Real Estate Review
Boston Magazine's Annual Real Estate Review
2009-03-05
Info/Broken? - Manny Ramirez puts Ritz condo on market at 23% above 2005 asking price
Discuss - Manny Ramirez puts Ritz condo on market at 23% above 2005 asking price
Manny Ramirez puts Ritz condo on market at 23% above 2005 asking price
2009-03-05
Info/Broken? - More than 100,000 in Mass. may get mortgage help
Discuss - More than 100,000 in Mass. may get mortgage help
More than 100,000 in Mass. may get mortgage help
2009-03-05
Info/Broken? - Business contacts tell the Boston Fed that local economic conditions deteriorated in the past two months
Discuss - Business contacts tell the Boston Fed that local economic conditions deteriorated in the past two months
Business contacts tell the Boston Fed that local economic conditions deteriorated in the past two months
2009-03-05
Info/Broken? - NARcasting The Future: March 2009 - NAR lowers 2009 forecast again; Yun threatens "The economy will not be able to recover in a sustainable way without home price stabilization."
Discuss - NARcasting The Future: March 2009 - NAR lowers 2009 forecast again; Yun threatens "The economy will not be able to recover in a sustainable way without home price stabilization."
NARcasting The Future: March 2009 - NAR lowers 2009 forecast again; Yun threatens "The economy will not be able to recover in a sustainable way without home price stabilization."
2009-03-04
Info/Broken? - Middlesex North Registry of Deeds Feb 2009 Stats: Deeds down 3% YOY, foreclosure deeds up 12%
Discuss - Middlesex North Registry of Deeds Feb 2009 Stats: Deeds down 3% YOY, foreclosure deeds up 12%
Middlesex North Registry of Deeds Feb 2009 Stats: Deeds down 3% YOY, foreclosure deeds up 12%
2009-03-04
Info/Broken? - Ex-Leaders of Countrywide Profit From Bad Loans
Discuss - Ex-Leaders of Countrywide Profit From Bad Loans
Ex-Leaders of Countrywide Profit From Bad Loans
2009-03-03
Info/Broken? - The Crisis of Credit Visualized
Discuss - The Crisis of Credit Visualized
The Crisis of Credit Visualized
2009-03-02
Info/Broken? - Foreclosures, drop in values make Hub more affordable
Discuss - Foreclosures, drop in values make Hub more affordable
Foreclosures, drop in values make Hub more affordable

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