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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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2009-04-30
Info/Broken? - Beantown Bust, Feb 2009 vs Feb 2008 (nominal): CSI down 7.20%, RPX down 20.72%
Discuss - Beantown Bust, Feb 2009 vs Feb 2008 (nominal): CSI down 7.20%, RPX down 20.72%
Beantown Bust, Feb 2009 vs Feb 2008 (nominal): CSI down 7.20%, RPX down 20.72%
2009-04-30
Info/Broken? - Globe's "John Dough" claims profit on condo flip
Discuss - Globe's "John Dough" claims profit on condo flip
Globe's "John Dough" claims profit on condo flip
2009-04-30
Info/Broken? - Foreclosure crisis changes Worcester/MA housing market (video)
Discuss - Foreclosure crisis changes Worcester/MA housing market (video)
Foreclosure crisis changes Worcester/MA housing market (video)
2009-04-29
Info/Broken? - Crashachusetts Existing Home Sales and Prices: March 2009
Discuss - Crashachusetts Existing Home Sales and Prices: March 2009
Crashachusetts Existing Home Sales and Prices: March 2009
2009-04-29
Info/Broken? - MA SFH Mar 2009 vs Mar 2008 - MAR: nominal median down 19%, sales down 4.7%; Warren Group: nominal median down 16.1%, sales down 7.4%
Discuss - MA SFH Mar 2009 vs Mar 2008 - MAR: nominal median down 19%, sales down 4.7%; Warren Group: nominal median down 16.1%, sales down 7.4%
MA SFH Mar 2009 vs Mar 2008 - MAR: nominal median down 19%, sales down 4.7%; Warren Group: nominal median down 16.1%, sales down 7.4%
2009-04-29
Info/Broken? - Google graphing tool for unemployment by state and county
Discuss - Google graphing tool for unemployment by state and county
Google graphing tool for unemployment by state and county
2009-04-28
Info/Broken? - Marketplace: How Boston's on top of foreclosures
Discuss - Marketplace: How Boston's on top of foreclosures
Marketplace: How Boston's on top of foreclosures
2009-04-28
Info/Broken? - S&P/Case-Shiller Boston Index down nominal 7.2% YOY in February
Discuss - S&P/Case-Shiller Boston Index down nominal 7.2% YOY in February
S&P/Case-Shiller Boston Index down nominal 7.2% YOY in February
2009-04-28
Info/Broken? - Boston area most-discounted neighborhoods, April update
Discuss - Boston area most-discounted neighborhoods, April update
Boston area most-discounted neighborhoods, April update
2009-04-27
Info/Broken? - MIT and Harvard buyers sue condo developer, Extell Development Co.
Discuss - MIT and Harvard buyers sue condo developer, Extell Development Co.
MIT and Harvard buyers sue condo developer, Extell Development Co.
2009-04-27
Info/Broken? - Some MA House budget ideas to hike taxes, revenues
Discuss - Some MA House budget ideas to hike taxes, revenues
Some MA House budget ideas to hike taxes, revenues
2009-04-24
Info/Broken? - Real estate slump hits luxury condos - Downtown sales, prices tumble
Discuss - Real estate slump hits luxury condos - Downtown sales, prices tumble
Real estate slump hits luxury condos - Downtown sales, prices tumble
2009-04-24
Info/Broken? - Middlesex North Registry of Deeds Post Foreclosure Sales: Resale prices 36% lower than original purchase price
Discuss - Middlesex North Registry of Deeds Post Foreclosure Sales: Resale prices 36% lower than original purchase price
Middlesex North Registry of Deeds Post Foreclosure Sales: Resale prices 36% lower than original purchase price
2009-04-23
Info/Broken? - As More Homes Fall Underwater, Trapped Americans Cannot Migrate
Discuss - As More Homes Fall Underwater, Trapped Americans Cannot Migrate
As More Homes Fall Underwater, Trapped Americans Cannot Migrate
2009-04-23
Info/Broken? - Shelter, or burden? The social benefits of home ownership look more modest than they did and the economic costs much higher.
Discuss - Shelter, or burden? The social benefits of home ownership look more modest than they did and the economic costs much higher.
Shelter, or burden? The social benefits of home ownership look more modest than they did and the economic costs much higher.
2009-04-23
Info/Broken? - Freddie Mac CFO in apparent suicide - police source
Discuss - Freddie Mac CFO in apparent suicide - police source
Freddie Mac CFO in apparent suicide - police source
2009-04-22
Info/Broken? - A Slight Uptick For New England? (PDF)
Discuss - A Slight Uptick For New England? (PDF)
A Slight Uptick For New England? (PDF)
2009-04-22
Info/Broken? - Arlington Artifice, March 2009: Nominal SFH median plunges 32.69% YOY
Discuss - Arlington Artifice, March 2009: Nominal SFH median plunges 32.69% YOY
Arlington Artifice, March 2009: Nominal SFH median plunges 32.69% YOY
2009-04-22
Info/Broken? - More being foreclosed into homelessness
Discuss - More being foreclosed into homelessness
More being foreclosed into homelessness
2009-04-22
Info/Broken? - For Housing Crisis, the End Probably Isn't Near
Discuss - For Housing Crisis, the End Probably Isn't Near
For Housing Crisis, the End Probably Isn't Near
2009-04-22
Info/Broken? - 5 Reasons House Prices May Never Recover
Discuss - 5 Reasons House Prices May Never Recover
5 Reasons House Prices May Never Recover
2009-04-21
Info/Broken? - Changes, possible cuts loom for firms' 2,600 Mass. workers after Oracle buys Sun
Discuss - Changes, possible cuts loom for firms' 2,600 Mass. workers after Oracle buys Sun
Changes, possible cuts loom for firms' 2,600 Mass. workers after Oracle buys Sun
2009-04-21
Info/Broken? - Back Bay site up for auction
Discuss - Back Bay site up for auction
Back Bay site up for auction
2009-04-20
Info/Broken? - Report: Boston-Quincy housing market undervalued by 17.3%
Discuss - Report: Boston-Quincy housing market undervalued by 17.3%
Report: Boston-Quincy housing market undervalued by 17.3%
2009-04-20
Info/Broken? - MAR dubs Frank "Distinguished Champion of Housing Opportunities" for his past and continued market manipulation
Discuss - MAR dubs Frank "Distinguished Champion of Housing Opportunities" for his past and continued market manipulation
MAR dubs Frank "Distinguished Champion of Housing Opportunities" for his past and continued market manipulation
2009-04-20
Info/Broken? - Unemployment Mashup, March 2009: MA up to 7.8% (after Feb was revised down), RI holds at 10.5%
Discuss - Unemployment Mashup, March 2009: MA up to 7.8% (after Feb was revised down), RI holds at 10.5%
Unemployment Mashup, March 2009: MA up to 7.8% (after Feb was revised down), RI holds at 10.5%
2009-04-20
Info/Broken? - Luxury Hull condos set for auction
Discuss - Luxury Hull condos set for auction
Luxury Hull condos set for auction
2009-04-17
Info/Broken? - 1/3 of foreclosures too damaged to sell
Discuss - 1/3 of foreclosures too damaged to sell
1/3 of foreclosures too damaged to sell
2009-04-17
Info/Broken? - Chapter 7 bankruptcy filings rise 16% YOY in Massachusetts
Discuss - Chapter 7 bankruptcy filings rise 16% YOY in Massachusetts
Chapter 7 bankruptcy filings rise 16% YOY in Massachusetts
2009-04-17
Info/Broken? - Bankruptcy of owner of Nouvelle at Natick and Natick Collection worries officials
Discuss - Bankruptcy of owner of Nouvelle at Natick and Natick Collection worries officials
Bankruptcy of owner of Nouvelle at Natick and Natick Collection worries officials
2009-04-17
Info/Broken? - Barney Frank's Double Indemnity - Mr. Frank wants to put a public safety net under municipal bonds.
Discuss - Barney Frank's Double Indemnity - Mr. Frank wants to put a public safety net under municipal bonds.
Barney Frank's Double Indemnity - Mr. Frank wants to put a public safety net under municipal bonds.
2009-04-17
Info/Broken? - Bankruptcy Court for Massachusetts blocks foreclosures without proper assignments
Discuss - Bankruptcy Court for Massachusetts blocks foreclosures without proper assignments
Bankruptcy Court for Massachusetts blocks foreclosures without proper assignments
2009-04-16
Info/Broken? - Visualizing U.S. Job Losses/Gains
Discuss - Visualizing U.S. Job Losses/Gains
Visualizing U.S. Job Losses/Gains
2009-04-16
Info/Broken? - Fidelity cuts raises, bonuses, profit-sharing
Discuss - Fidelity cuts raises, bonuses, profit-sharing
Fidelity cuts raises, bonuses, profit-sharing
2009-04-16
Info/Broken? - Operator of Faneuil Hall Marketplace files for bankruptcy protection
Discuss - Operator of Faneuil Hall Marketplace files for bankruptcy protection
Operator of Faneuil Hall Marketplace files for bankruptcy protection
2009-04-16
Info/Broken? - State sues Hingham developer of Cape Cod Timeshares
Discuss - State sues Hingham developer of Cape Cod Timeshares
State sues Hingham developer of Cape Cod Timeshares
2009-04-15
Info/Broken? - Frank pushes through bailout of Boston bank whose stated mission was to promote "underbanked, underprivileged communities" but which made few urban loans
Discuss - Frank pushes through bailout of Boston bank whose stated mission was to promote "underbanked, underprivileged communities" but which made few urban loans
Frank pushes through bailout of Boston bank whose stated mission was to promote "underbanked, underprivileged communities" but which made few urban loans
2009-04-15
Info/Broken? - Harvard dean details need to slash spending
Discuss - Harvard dean details need to slash spending
Harvard dean details need to slash spending
2009-04-14
Info/Broken? - HouseSavvy: Greater Boston market "poised for continued growth" ... "bottoming out"
Discuss - HouseSavvy: Greater Boston market "poised for continued growth" ... "bottoming out"
HouseSavvy: Greater Boston market "poised for continued growth" ... "bottoming out"
2009-04-14
Info/Broken? - Doomsday Scenarios: Could Condo Prices Fall to Zero?
Discuss - Doomsday Scenarios: Could Condo Prices Fall to Zero?
Doomsday Scenarios: Could Condo Prices Fall to Zero?
2009-04-13
Info/Broken? - Survey: Half of Mass. residents worried about losing their jobs - a quarter fear they won't make their housing payments
Discuss - Survey: Half of Mass. residents worried about losing their jobs - a quarter fear they won't make their housing payments
Survey: Half of Mass. residents worried about losing their jobs - a quarter fear they won't make their housing payments
2009-04-13
Info/Broken? - How Can Mortgage Securities Be Worth So Little?
Discuss - How Can Mortgage Securities Be Worth So Little?
How Can Mortgage Securities Be Worth So Little?
2009-04-13
Info/Broken? - Chinese drywall imported during housing boom causes corrosion, possible health risk
Discuss - Chinese drywall imported during housing boom causes corrosion, possible health risk
Chinese drywall imported during housing boom causes corrosion, possible health risk
2009-04-10
Info/Broken? - 2 Norwood residents accused of defrauding HUD
Discuss - 2 Norwood residents accused of defrauding HUD
2 Norwood residents accused of defrauding HUD
2009-04-10
Info/Broken? - The News Keeps Getting Better For Renters
Discuss - The News Keeps Getting Better For Renters
The News Keeps Getting Better For Renters
2009-04-10
Info/Broken? - Mass. AG files lawsuits against Loan Modification Group Corp. and Mitigation, LLC alleging foreclosure aid scams
Discuss - Mass. AG files lawsuits against Loan Modification Group Corp. and Mitigation, LLC alleging foreclosure aid scams
Mass. AG files lawsuits against Loan Modification Group Corp. and Mitigation, LLC alleging foreclosure aid scams
2009-04-10
Info/Broken? - TARP Recipients Required to Modify Mortgages, HUD Says
Discuss - TARP Recipients Required to Modify Mortgages, HUD Says
TARP Recipients Required to Modify Mortgages, HUD Says
2009-04-09
Info/Broken? - Globe woes: the wages of elitism (reflected in real estate coverage, etc.)?
Discuss - Globe woes: the wages of elitism (reflected in real estate coverage, etc.)?
Globe woes: the wages of elitism (reflected in real estate coverage, etc.)?
2009-04-09
Info/Broken? - Globe: growing number of first-time buyers jumping into the housing market
Discuss - Globe: growing number of first-time buyers jumping into the housing market
Globe: growing number of first-time buyers jumping into the housing market
2009-04-08
Info/Broken? - Land Court hit by crises in housing and staffing
Discuss - Land Court hit by crises in housing and staffing
Land Court hit by crises in housing and staffing
2009-04-08
Info/Broken? - Recession Deepens in the Northeast
Discuss - Recession Deepens in the Northeast
Recession Deepens in the Northeast
2009-04-08
Info/Broken? - Bet on/against housing with Shiller's new ETFs
Discuss - Bet on/against housing with Shiller's new ETFs
Bet on/against housing with Shiller's new ETFs
2009-04-07
Info/Broken? - Bubble Logic Through the Ages
Discuss - Bubble Logic Through the Ages
Bubble Logic Through the Ages
2009-04-06
Info/Broken? - Several hundred attend foreclosure prevention workshop in Lowell
Discuss - Several hundred attend foreclosure prevention workshop in Lowell
Several hundred attend foreclosure prevention workshop in Lowell
2009-04-04
Info/Broken? - The new paradigm is here... lose your job, buy a house anyway
Discuss - The new paradigm is here... lose your job, buy a house anyway
The new paradigm is here... lose your job, buy a house anyway
2009-04-03
Info/Broken? - Rahm Emanuel's profitable stint at mortgage giant
Discuss - Rahm Emanuel's profitable stint at mortgage giant
Rahm Emanuel's profitable stint at mortgage giant
2009-04-02
Info/Broken? - Beantown Bust, Jan 2009 vs Jan 2008 (nominal): CSI down 7.29%, RPX down 23.79%, Boston condos down 6.71%
Discuss - Beantown Bust, Jan 2009 vs Jan 2008 (nominal): CSI down 7.29%, RPX down 23.79%, Boston condos down 6.71%
Beantown Bust, Jan 2009 vs Jan 2008 (nominal): CSI down 7.29%, RPX down 23.79%, Boston condos down 6.71%
2009-04-02
Info/Broken? - Regional Foreclosure Prevention Event Today in Lowell
Discuss - Regional Foreclosure Prevention Event Today in Lowell
Regional Foreclosure Prevention Event Today in Lowell
2009-04-02
Info/Broken? - Communities finding ways to make neglected properties pay off
Discuss - Communities finding ways to make neglected properties pay off
Communities finding ways to make neglected properties pay off
2009-04-02
Info/Broken? - Frank to speak at MassBay
Discuss - Frank to speak at MassBay
Frank to speak at MassBay
2009-04-01
Info/Broken? - Home Prices: Low, But Still No Bargain
Discuss - Home Prices: Low, But Still No Bargain
Home Prices: Low, But Still No Bargain
2009-04-01
Info/Broken? - Boston's Hancock Tower sells at nearly half price in foreclosure auction
Discuss - Boston's Hancock Tower sells at nearly half price in foreclosure auction
Boston's Hancock Tower sells at nearly half price in foreclosure auction
2009-04-01
Info/Broken? - Foreclosure deeds drop in Feb in Mass., but mortgage delinquency rates on the rise
Discuss - Foreclosure deeds drop in Feb in Mass., but mortgage delinquency rates on the rise
Foreclosure deeds drop in Feb in Mass., but mortgage delinquency rates on the rise

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