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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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Legend: Info/Broken? Info/Broken? Discuss Discuss
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2009-07-31
Info/Broken? - Boston Bubble Brief, Jun 2008: Real MA SFH prices bounce above 2001 estimate, aided by deflation
Discuss - Boston Bubble Brief, Jun 2008: Real MA SFH prices bounce above 2001 estimate, aided by deflation
Boston Bubble Brief, Jun 2008: Real MA SFH prices bounce above 2001 estimate, aided by deflation
2009-07-31
Info/Broken? - Homebuyer Tax Break Propping Up the Lower End of Housing?
Discuss - Homebuyer Tax Break Propping Up the Lower End of Housing?
Homebuyer Tax Break Propping Up the Lower End of Housing?
2009-07-31
Info/Broken? - Pair of Mass. banks told to boost reserves - Local lenders had "unsound" practices, regulators say
Discuss - Pair of Mass. banks told to boost reserves - Local lenders had "unsound" practices, regulators say
Pair of Mass. banks told to boost reserves - Local lenders had "unsound" practices, regulators say
2009-07-30
Info/Broken? - Fed: No rebound this year for Mass. economy
Discuss - Fed: No rebound this year for Mass. economy
Fed: No rebound this year for Mass. economy
2009-07-30
Info/Broken? - Frank: 'Cram-Down' May Be Revived to Boost Mortgage Relief
Discuss - Frank: 'Cram-Down' May Be Revived to Boost Mortgage Relief
Frank: 'Cram-Down' May Be Revived to Boost Mortgage Relief
2009-07-30
Info/Broken? - Mass. match for CPA cut, as revenue falls
Discuss - Mass. match for CPA cut, as revenue falls
Mass. match for CPA cut, as revenue falls
2009-07-29
Info/Broken? - Beantown Bust, May 2009 vs 2008 (nominal): Boston S&P/CSI down 7.22%, Boston RPX down 12.02%
Discuss - Beantown Bust, May 2009 vs 2008 (nominal): Boston S&P/CSI down 7.22%, Boston RPX down 12.02%
Beantown Bust, May 2009 vs 2008 (nominal): Boston S&P/CSI down 7.22%, Boston RPX down 12.02%
2009-07-29
Info/Broken? - Crashachusetts Existing Home Sales and Prices: June 2009
Discuss - Crashachusetts Existing Home Sales and Prices: June 2009
Crashachusetts Existing Home Sales and Prices: June 2009
2009-07-28
Info/Broken? - MA SFH nominal median for June 2009 vs June 2008 - MAR down 8.6%, Warren Group down 8%
Discuss - MA SFH nominal median for June 2009 vs June 2008 - MAR down 8.6%, Warren Group down 8%
MA SFH nominal median for June 2009 vs June 2008 - MAR down 8.6%, Warren Group down 8%
2009-07-27
Info/Broken? - Verizon to cut 8,000 workers; Mass. braces
Discuss - Verizon to cut 8,000 workers; Mass. braces
Verizon to cut 8,000 workers; Mass. braces
2009-07-27
Info/Broken? - New Fannie Mae Condo Regulations Could Stifle Condo Demand
Discuss - New Fannie Mae Condo Regulations Could Stifle Condo Demand
New Fannie Mae Condo Regulations Could Stifle Condo Demand
2009-07-24
Info/Broken? - Lassoing in Mass. jobs - N.H. telling cos. to be Big and Rich there
Discuss - Lassoing in Mass. jobs - N.H. telling cos. to be Big and Rich there
Lassoing in Mass. jobs - N.H. telling cos. to be Big and Rich there
2009-07-24
Info/Broken? - Boston Area Biggest Discounts, July Update
Discuss - Boston Area Biggest Discounts, July Update
Boston Area Biggest Discounts, July Update
2009-07-23
Info/Broken? - Inflation, deflation, stagflation or hyperinflation?
Discuss - Inflation, deflation, stagflation or hyperinflation?
Inflation, deflation, stagflation or hyperinflation?
2009-07-23
Info/Broken? - Foreclosure's unrelenting tide - Joblessness and lenders' reluctance to alter terms pushing filings higher
Discuss - Foreclosure's unrelenting tide - Joblessness and lenders' reluctance to alter terms pushing filings higher
Foreclosure's unrelenting tide - Joblessness and lenders' reluctance to alter terms pushing filings higher
2009-07-22
Info/Broken? - Massachusetts foreclosure petitions up 710% YOY in June
Discuss - Massachusetts foreclosure petitions up 710% YOY in June
Massachusetts foreclosure petitions up 710% YOY in June
2009-07-22
Info/Broken? - Endowment Losses From Harvard to Yale Leave Universities Poorer
Discuss - Endowment Losses From Harvard to Yale Leave Universities Poorer
Endowment Losses From Harvard to Yale Leave Universities Poorer
2009-07-22
Info/Broken? - Middlesex North Registry of Deeds: Executions up 270% YOY for first three weeks of July
Discuss - Middlesex North Registry of Deeds: Executions up 270% YOY for first three weeks of July
Middlesex North Registry of Deeds: Executions up 270% YOY for first three weeks of July
2009-07-22
Info/Broken? - 46% Of Boston Redfin Offers Are On Homes With Multiple Bids
Discuss - 46% Of Boston Redfin Offers Are On Homes With Multiple Bids
46% Of Boston Redfin Offers Are On Homes With Multiple Bids
2009-07-21
Info/Broken? - Green Line extension funding in question - Planners stalling many projects
Discuss - Green Line extension funding in question - Planners stalling many projects
Green Line extension funding in question - Planners stalling many projects
2009-07-21
Info/Broken? - Assembly Square gets $65m from state, feds
Discuss - Assembly Square gets $65m from state, feds
Assembly Square gets $65m from state, feds
2009-07-20
Info/Broken? - MA chapter 7 bankruptcies jump 58% YOY in 2009 Q2
Discuss - MA chapter 7 bankruptcies jump 58% YOY in 2009 Q2
MA chapter 7 bankruptcies jump 58% YOY in 2009 Q2
2009-07-20
Info/Broken? - MA vs. RI Unemployment, June 2009: MA rises to 8.6%, RI rises to 12.4%
Discuss - MA vs. RI Unemployment, June 2009: MA rises to 8.6%, RI rises to 12.4%
MA vs. RI Unemployment, June 2009: MA rises to 8.6%, RI rises to 12.4%
2009-07-17
Info/Broken? - Appraisers still colluding with borrowers
Discuss - Appraisers still colluding with borrowers
Appraisers still colluding with borrowers
2009-07-16
Info/Broken? - State's jobless rate up to 8.6%, but number of jobs rises
Discuss - State's jobless rate up to 8.6%, but number of jobs rises
State's jobless rate up to 8.6%, but number of jobs rises
2009-07-16
Info/Broken? - Massachusetts in Suit Over Cost of Universal Care
Discuss - Massachusetts in Suit Over Cost of Universal Care
Massachusetts in Suit Over Cost of Universal Care
2009-07-16
Info/Broken? - Upscale home sales lag as jumbo loans are hard to get (US)
Discuss - Upscale home sales lag as jumbo loans are hard to get (US)
Upscale home sales lag as jumbo loans are hard to get (US)
2009-07-15
Info/Broken? - Gregory Vasil: Greater Boston prices are about to come back up, "almost akin to a hot market"
Discuss - Gregory Vasil: Greater Boston prices are about to come back up, "almost akin to a hot market"
Gregory Vasil: Greater Boston prices are about to come back up, "almost akin to a hot market"
2009-07-15
Info/Broken? - Housing Happiness - Animation showing change in housing prices and income
Discuss - Housing Happiness - Animation showing change in housing prices and income
Housing Happiness - Animation showing change in housing prices and income
2009-07-15
Info/Broken? - Jon Stewart interviews Barney Frank on housing & economy (video)
Discuss - Jon Stewart interviews Barney Frank on housing & economy (video)
Jon Stewart interviews Barney Frank on housing & economy (video)
2009-07-15
Info/Broken? - Mass. OK's advance on home buyer tax credit - $8,000 loans can be used for closing costs and down payments
Discuss - Mass. OK's advance on home buyer tax credit - $8,000 loans can be used for closing costs and down payments
Mass. OK's advance on home buyer tax credit - $8,000 loans can be used for closing costs and down payments
2009-07-14
Info/Broken? - Nantucket Report: Wealthy Homeowners Primed to Suffer Major Pain - "Immune" towns next segment to collapse
Discuss - Nantucket Report: Wealthy Homeowners Primed to Suffer Major Pain - "Immune" towns next segment to collapse
Nantucket Report: Wealthy Homeowners Primed to Suffer Major Pain - "Immune" towns next segment to collapse
2009-07-14
Info/Broken? - Buying without an agent?
Discuss - Buying without an agent?
Buying without an agent?
2009-07-14
Info/Broken? - State won't review old loans - No check on work of rejected brokers
Discuss - State won't review old loans - No check on work of rejected brokers
State won't review old loans - No check on work of rejected brokers
2009-07-14
Info/Broken? - Shiller: echo bubble in Boston?
Discuss - Shiller: echo bubble in Boston?
Shiller: echo bubble in Boston?
2009-07-14
Info/Broken? - Survey: Many of Bay State's rich get poorer
Discuss - Survey: Many of Bay State's rich get poorer
Survey: Many of Bay State's rich get poorer
2009-07-13
Info/Broken? - Slow Mass. home sales (end of article); good chart too
Discuss - Slow Mass. home sales (end of article); good chart too
Slow Mass. home sales (end of article); good chart too
2009-07-10
Info/Broken? - Boston has 2nd highest number of discounts in the US
Discuss - Boston has 2nd highest number of discounts in the US
Boston has 2nd highest number of discounts in the US
2009-07-09
Info/Broken? - Obsessive Housing Disorder
Discuss - Obsessive Housing Disorder
Obsessive Housing Disorder
2009-07-09
Info/Broken? - Frank proposes $2B home loan plan for jobless
Discuss - Frank proposes $2B home loan plan for jobless
Frank proposes $2B home loan plan for jobless
2009-07-09
Info/Broken? - PMI Group gives Boston 80% chance of additional declines through 2011
Discuss - PMI Group gives Boston 80% chance of additional declines through 2011
PMI Group gives Boston 80% chance of additional declines through 2011
2009-07-09
Info/Broken? - Norwell firm, HouseSavvy, says local housing market turnaround has begun
Discuss - Norwell firm, HouseSavvy, says local housing market turnaround has begun
Norwell firm, HouseSavvy, says local housing market turnaround has begun
2009-07-08
Info/Broken? - Massachusetts among top states for mortgage fraud
Discuss - Massachusetts among top states for mortgage fraud
Massachusetts among top states for mortgage fraud
2009-07-07
Info/Broken? - Bob Shiller didn't kill the housing market
Discuss - Bob Shiller didn't kill the housing market
Bob Shiller didn't kill the housing market
2009-07-07
Info/Broken? - Lenders avoid redoing loans, Boston Fed concludes
Discuss - Lenders avoid redoing loans, Boston Fed concludes
Lenders avoid redoing loans, Boston Fed concludes
2009-07-07
Info/Broken? - The Arlington Artifice, May 2009: Year-to-date median down 9.85% YOY (nominal), sales near lowest level on record
Discuss - The Arlington Artifice, May 2009: Year-to-date median down 9.85% YOY (nominal), sales near lowest level on record
The Arlington Artifice, May 2009: Year-to-date median down 9.85% YOY (nominal), sales near lowest level on record
2009-07-06
Info/Broken? - Recession slows MA population drain
Discuss - Recession slows MA population drain
Recession slows MA population drain
2009-07-03
Info/Broken? - Herald: 1850 Lofts auction yields "bargain basement" prices
Discuss - Herald: 1850 Lofts auction yields "bargain basement" prices
Herald: 1850 Lofts auction yields "bargain basement" prices
2009-07-03
Info/Broken? - Middlesex North Registry of Deeds June Stats: Deeds down 3%, foreclosure deeds down 56%
Discuss - Middlesex North Registry of Deeds June Stats: Deeds down 3%, foreclosure deeds down 56%
Middlesex North Registry of Deeds June Stats: Deeds down 3%, foreclosure deeds down 56%
2009-07-02
Info/Broken? - Beantown Bust, April 2009: S&P/Case-Shiller Boston down 7.71% nominally YOY, RPX down 10.82%
Discuss - Beantown Bust, April 2009: S&P/Case-Shiller Boston down 7.71% nominally YOY, RPX down 10.82%
Beantown Bust, April 2009: S&P/Case-Shiller Boston down 7.71% nominally YOY, RPX down 10.82%
2009-07-02
Info/Broken? - Sharp Price Drops in Manhattan Apartments (Expensive != Immune)
Discuss - Sharp Price Drops in Manhattan Apartments (Expensive != Immune)
Sharp Price Drops in Manhattan Apartments (Expensive != Immune)
2009-07-01
Info/Broken? - Obama extends mortgage refinancing program to 125%
Discuss - Obama extends mortgage refinancing program to 125%
Obama extends mortgage refinancing program to 125%
2009-07-01
Info/Broken? - The Five Waves Of The Housing Collapse
Discuss - The Five Waves Of The Housing Collapse
The Five Waves Of The Housing Collapse

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