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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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2009-10-30
Info/Broken? - Boston Bubble Brief, Sep 2009: Real prices fall back below 2001 estimate, YOY declines continue despite large distortion from tax credit
Discuss - Boston Bubble Brief, Sep 2009: Real prices fall back below 2001 estimate, YOY declines continue despite large distortion from tax credit
Boston Bubble Brief, Sep 2009: Real prices fall back below 2001 estimate, YOY declines continue despite large distortion from tax credit
2009-10-30
Info/Broken? - Massachusetts downturn deepens - U.S. economy heads up as state's falls further
Discuss - Massachusetts downturn deepens - U.S. economy heads up as state's falls further
Massachusetts downturn deepens - U.S. economy heads up as state's falls further
2009-10-30
Info/Broken? - Patrick to end nearly 1,000 jobs
Discuss - Patrick to end nearly 1,000 jobs
Patrick to end nearly 1,000 jobs
2009-10-30
Info/Broken? - Peter Schiff: Houses are not investments
Discuss - Peter Schiff: Houses are not investments
Peter Schiff: Houses are not investments
2009-10-29
Info/Broken? - Crashachusetts Existing Home Sales and Prices: September 2009
Discuss - Crashachusetts Existing Home Sales and Prices: September 2009
Crashachusetts Existing Home Sales and Prices: September 2009
2009-10-29
Info/Broken? - More Natick condos up for auction
Discuss - More Natick condos up for auction
More Natick condos up for auction
2009-10-29
Info/Broken? - Senate support for unaffordable housing - Tax credit likely to be extended, expanded
Discuss - Senate support for unaffordable housing - Tax credit likely to be extended, expanded
Senate support for unaffordable housing - Tax credit likely to be extended, expanded
2009-10-28
Info/Broken? - Herald, et al: Housing rebound is in sight
Discuss - Herald, et al: Housing rebound is in sight
Herald, et al: Housing rebound is in sight
2009-10-28
Info/Broken? - City of Boston to buy foreclosures, allow tenants to stay
Discuss - City of Boston to buy foreclosures, allow tenants to stay
City of Boston to buy foreclosures, allow tenants to stay
2009-10-28
Info/Broken? - Is the U.S. Economy Turning Japanese?
Discuss - Is the U.S. Economy Turning Japanese?
Is the U.S. Economy Turning Japanese?
2009-10-27
Info/Broken? - MAR: more govt intervention needed for "stabilization" (so no bottom?) - Sep 2009 vs Sep 2008 MA SFH nominal median: MAR -1.7%, Warren Group -1.4%
Discuss - MAR: more govt intervention needed for "stabilization" (so no bottom?) - Sep 2009 vs Sep 2008 MA SFH nominal median: MAR -1.7%, Warren Group -1.4%
MAR: more govt intervention needed for "stabilization" (so no bottom?) - Sep 2009 vs Sep 2008 MA SFH nominal median: MAR -1.7%, Warren Group -1.4%
2009-10-27
Info/Broken? - S&P/Case-Shiller Boston Index down nominal 4.2% YOY in August
Discuss - S&P/Case-Shiller Boston Index down nominal 4.2% YOY in August
S&P/Case-Shiller Boston Index down nominal 4.2% YOY in August
2009-10-27
Info/Broken? - Boston-area rents now 2nd highest in country
Discuss - Boston-area rents now 2nd highest in country
Boston-area rents now 2nd highest in country
2009-10-27
Info/Broken? - Intellectual dishonesty in NAR characterization of September decline as a "surge"
Discuss - Intellectual dishonesty in NAR characterization of September decline as a "surge"
Intellectual dishonesty in NAR characterization of September decline as a "surge"
2009-10-26
Info/Broken? - Report: Housing In Boston Less Affordable Than Ever
Discuss - Report: Housing In Boston Less Affordable Than Ever
Report: Housing In Boston Less Affordable Than Ever
2009-10-26
Info/Broken? - Bay State heads to a jobless recovery
Discuss - Bay State heads to a jobless recovery
Bay State heads to a jobless recovery
2009-10-23
Info/Broken? - Children as young as 4 received first-time homebuyer tax credit - Congress told of abuse in homebuyer program
Discuss - Children as young as 4 received first-time homebuyer tax credit - Congress told of abuse in homebuyer program
Children as young as 4 received first-time homebuyer tax credit - Congress told of abuse in homebuyer program
2009-10-23
Info/Broken? - Kill the wasteful home-buyer tax credit
Discuss - Kill the wasteful home-buyer tax credit
Kill the wasteful home-buyer tax credit
2009-10-23
Info/Broken? - Curious Why Property Taxes Don't Match Home Values?
Discuss - Curious Why Property Taxes Don't Match Home Values?
Curious Why Property Taxes Don't Match Home Values?
2009-10-22
Info/Broken? - Boston heat maps for unemployment, home prices, foreclosures
Discuss - Boston heat maps for unemployment, home prices, foreclosures
Boston heat maps for unemployment, home prices, foreclosures
2009-10-22
Info/Broken? - Massachusetts employers cautiously forecasting economic recovery some time in 2010
Discuss - Massachusetts employers cautiously forecasting economic recovery some time in 2010
Massachusetts employers cautiously forecasting economic recovery some time in 2010
2009-10-21
Info/Broken? - Job losses mount in construction sector - MA's 17.2% drop 12th highest in nation
Discuss - Job losses mount in construction sector - MA's 17.2% drop 12th highest in nation
Job losses mount in construction sector - MA's 17.2% drop 12th highest in nation
2009-10-21
Info/Broken? - Should Mayoral Candidates Refuse Money From Developers? Menino Fundraiser Hosted By Construction Company
Discuss - Should Mayoral Candidates Refuse Money From Developers? Menino Fundraiser Hosted By Construction Company
Should Mayoral Candidates Refuse Money From Developers? Menino Fundraiser Hosted By Construction Company
2009-10-21
Info/Broken? - Clarification: Fiserv predicts 5.5% fall in Boston in 2010
Discuss - Clarification: Fiserv predicts 5.5% fall in Boston in 2010
Clarification: Fiserv predicts 5.5% fall in Boston in 2010
2009-10-21
Info/Broken? - Economist: Rules deter cheap houses
Discuss - Economist: Rules deter cheap houses
Economist: Rules deter cheap houses
2009-10-20
Info/Broken? - Homes: About to get much cheaper - National home prices are forecast to shrink another 11% (same firm forecasts 4.5% increase for Boston)
Discuss - Homes: About to get much cheaper - National home prices are forecast to shrink another 11% (same firm forecasts 4.5% increase for Boston)
Homes: About to get much cheaper - National home prices are forecast to shrink another 11% (same firm forecasts 4.5% increase for Boston)
2009-10-20
Info/Broken? - Mass. foreclosures in Sept. drop 12.1% from a year ago
Discuss - Mass. foreclosures in Sept. drop 12.1% from a year ago
Mass. foreclosures in Sept. drop 12.1% from a year ago
2009-10-20
Info/Broken? - Sep 2009 unemployment comparison: MA rises to 9.3%, RI up to 13.0%
Discuss - Sep 2009 unemployment comparison: MA rises to 9.3%, RI up to 13.0%
Sep 2009 unemployment comparison: MA rises to 9.3%, RI up to 13.0%
2009-10-19
Info/Broken? - MA unemployment at 33-year high; health insurance fund for laid-off workers to run dry next month
Discuss - MA unemployment at 33-year high; health insurance fund for laid-off workers to run dry next month
MA unemployment at 33-year high; health insurance fund for laid-off workers to run dry next month
2009-10-19
Info/Broken? - Pending MA bill would require creditors to modify loans
Discuss - Pending MA bill would require creditors to modify loans
Pending MA bill would require creditors to modify loans
2009-10-19
Info/Broken? - Bryant buyers hit condo "jackpot" - Boston luxury units sell for way less at auction
Discuss - Bryant buyers hit condo "jackpot" - Boston luxury units sell for way less at auction
Bryant buyers hit condo "jackpot" - Boston luxury units sell for way less at auction
2009-10-19
Info/Broken? - A state of economic anxiety - Mass. residents believe recovery will be slow and long, poll indicates
Discuss - A state of economic anxiety - Mass. residents believe recovery will be slow and long, poll indicates
A state of economic anxiety - Mass. residents believe recovery will be slow and long, poll indicates
2009-10-16
Info/Broken? - Firms report 30,000 new stimulus jobs, but only 600 in MA
Discuss - Firms report 30,000 new stimulus jobs, but only 600 in MA
Firms report 30,000 new stimulus jobs, but only 600 in MA
2009-10-16
Info/Broken? - Pols may extend homebuyer tax credit despite $16.7B cost
Discuss - Pols may extend homebuyer tax credit despite $16.7B cost
Pols may extend homebuyer tax credit despite $16.7B cost
2009-10-16
Info/Broken? - Bay State (total) bankruptcies fall - Filings declined 8% in 3d quarter
Discuss - Bay State (total) bankruptcies fall - Filings declined 8% in 3d quarter
Bay State (total) bankruptcies fall - Filings declined 8% in 3d quarter
2009-10-15
Info/Broken? - Mass. unemployment hits highest rate since 1976 (9.3%)
Discuss - Mass. unemployment hits highest rate since 1976 (9.3%)
Mass. unemployment hits highest rate since 1976 (9.3%)
2009-10-15
Info/Broken? - Bay State Chapter 7 bankruptcy filings soar 35% YOY
Discuss - Bay State Chapter 7 bankruptcy filings soar 35% YOY
Bay State Chapter 7 bankruptcy filings soar 35% YOY
2009-10-15
Info/Broken? - Ruling could undo thousands of Bay State foreclosures
Discuss - Ruling could undo thousands of Bay State foreclosures
Ruling could undo thousands of Bay State foreclosures
2009-10-15
Info/Broken? - Mortgage madness (again) - FHA imagines it can cure the problems created by easy credit by promoting more easy credit
Discuss - Mortgage madness (again) - FHA imagines it can cure the problems created by easy credit by promoting more easy credit
Mortgage madness (again) - FHA imagines it can cure the problems created by easy credit by promoting more easy credit
2009-10-14
Info/Broken? - Massachusetts city (Springfield) takes homeowners to court over blight
Discuss - Massachusetts city (Springfield) takes homeowners to court over blight
Massachusetts city (Springfield) takes homeowners to court over blight
2009-10-14
Info/Broken? - Patriots' Tom Brady asking $10.9M for penthouse
Discuss - Patriots' Tom Brady asking $10.9M for penthouse
Patriots' Tom Brady asking $10.9M for penthouse
2009-10-13
Info/Broken? - Desperately Searching for a Truly Positive Sign
Discuss - Desperately Searching for a Truly Positive Sign
Desperately Searching for a Truly Positive Sign
2009-10-13
Info/Broken? - Property Taxes Highest in Northeast, Midwest - MA 6th highest in nation
Discuss - Property Taxes Highest in Northeast, Midwest - MA 6th highest in nation
Property Taxes Highest in Northeast, Midwest - MA 6th highest in nation
2009-10-13
Info/Broken? - Mass. foreclosure sales in limbo over title issue - Expected ruling may complicate transactions
Discuss - Mass. foreclosure sales in limbo over title issue - Expected ruling may complicate transactions
Mass. foreclosure sales in limbo over title issue - Expected ruling may complicate transactions
2009-10-12
Info/Broken? - Massachusetts lawmakers to consider more than 100 housing related bills
Discuss - Massachusetts lawmakers to consider more than 100 housing related bills
Massachusetts lawmakers to consider more than 100 housing related bills
2009-10-12
Info/Broken? - Americans Are Still Delusional About House Prices
Discuss - Americans Are Still Delusional About House Prices
Americans Are Still Delusional About House Prices
2009-10-09
Info/Broken? - Did FHA make bad loans to prop up home prices? Frank: "I don't think it's a bad thing that the bad loans occurred"
Discuss - Did FHA make bad loans to prop up home prices? Frank: "I don't think it's a bad thing that the bad loans occurred"
Did FHA make bad loans to prop up home prices? Frank: "I don't think it's a bad thing that the bad loans occurred"
2009-10-09
Info/Broken? - FHA May Need Bailout, Experts Say
Discuss - FHA May Need Bailout, Experts Say
FHA May Need Bailout, Experts Say
2009-10-09
Info/Broken? - As The Economy Drags, Green Shoots Hint At Growth In Mass.
Discuss - As The Economy Drags, Green Shoots Hint At Growth In Mass.
As The Economy Drags, Green Shoots Hint At Growth In Mass.
2009-10-08
Info/Broken? - Nouvelle at Natick auction "failed" - Majority of units remain unsold
Discuss - Nouvelle at Natick auction "failed" - Majority of units remain unsold
Nouvelle at Natick auction "failed" - Majority of units remain unsold
2009-10-08
Info/Broken? - Five years of foreclosures graphed by the Middlesex North Registry of Deeds
Discuss - Five years of foreclosures graphed by the Middlesex North Registry of Deeds
Five years of foreclosures graphed by the Middlesex North Registry of Deeds
2009-10-08
Info/Broken? - Northeast states, including MA, dominate largest discount list
Discuss - Northeast states, including MA, dominate largest discount list
Northeast states, including MA, dominate largest discount list
2009-10-07
Info/Broken? - Renting in Boston gets easier - With apartment vacancy rates up, prices make modest drop
Discuss - Renting in Boston gets easier - With apartment vacancy rates up, prices make modest drop
Renting in Boston gets easier - With apartment vacancy rates up, prices make modest drop
2009-10-07
Info/Broken? - Former Somerville lawyer pleads guilty to mortgage fraud
Discuss - Former Somerville lawyer pleads guilty to mortgage fraud
Former Somerville lawyer pleads guilty to mortgage fraud
2009-10-07
Info/Broken? - Reverse mortgages may be next crisis
Discuss - Reverse mortgages may be next crisis
Reverse mortgages may be next crisis
2009-10-06
Info/Broken? - Housing crisis persists - Greater Boston even less affordable now than before recession
Discuss - Housing crisis persists - Greater Boston even less affordable now than before recession
Housing crisis persists - Greater Boston even less affordable now than before recession
2009-10-06
Info/Broken? - Russia Wharf tower harvests rain to cool building, irrigate plants, and reduce water bill
Discuss - Russia Wharf tower harvests rain to cool building, irrigate plants, and reduce water bill
Russia Wharf tower harvests rain to cool building, irrigate plants, and reduce water bill
2009-10-05
Info/Broken? - Did rising home prices create our last jobless recovery?
Discuss - Did rising home prices create our last jobless recovery?
Did rising home prices create our last jobless recovery?
2009-10-05
Info/Broken? - How Urban Planners Caused the Housing Bubble
Discuss - How Urban Planners Caused the Housing Bubble
How Urban Planners Caused the Housing Bubble
2009-10-05
Info/Broken? - 55 Nouvelle at Natick mall condos sold at auction
Discuss - 55 Nouvelle at Natick mall condos sold at auction
55 Nouvelle at Natick mall condos sold at auction
2009-10-05
Info/Broken? - Buyers spend $16K+ to get $8K homebuyer handout - Credit sparks irrational exuberance and artificially inflates demand
Discuss - Buyers spend $16K+ to get $8K homebuyer handout - Credit sparks irrational exuberance and artificially inflates demand
Buyers spend $16K+ to get $8K homebuyer handout - Credit sparks irrational exuberance and artificially inflates demand
2009-10-02
Info/Broken? - Boston Bubble Brief, Aug 2009: 1.86% YOY real price decline, manufactured by temporary tax credit
Discuss - Boston Bubble Brief, Aug 2009: 1.86% YOY real price decline, manufactured by temporary tax credit
Boston Bubble Brief, Aug 2009: 1.86% YOY real price decline, manufactured by temporary tax credit
2009-10-02
Info/Broken? - Massachusetts AG Busts Scheme to Prey on Homeowners in Trouble
Discuss - Massachusetts AG Busts Scheme to Prey on Homeowners in Trouble
Massachusetts AG Busts Scheme to Prey on Homeowners in Trouble
2009-10-02
Info/Broken? - Boston Fed chief: Growth will be "restrained," recovery "fragile"
Discuss - Boston Fed chief: Growth will be "restrained," recovery "fragile"
Boston Fed chief: Growth will be "restrained," recovery "fragile"
2009-10-01
Info/Broken? - Middlesex North Registry of Deeds Sep 2009 Stats: 98% YOY jump in orders of notice
Discuss - Middlesex North Registry of Deeds Sep 2009 Stats: 98% YOY jump in orders of notice
Middlesex North Registry of Deeds Sep 2009 Stats: 98% YOY jump in orders of notice
2009-10-01
Info/Broken? - Are mortgage modifications a complete failure?
Discuss - Are mortgage modifications a complete failure?
Are mortgage modifications a complete failure?
2009-10-01
Info/Broken? - Case-Shiller: Simultaneous Summer Surge Stretches On
Discuss - Case-Shiller: Simultaneous Summer Surge Stretches On
Case-Shiller: Simultaneous Summer Surge Stretches On
2009-10-01
Info/Broken? - Hub nets $40M for housing projects
Discuss - Hub nets $40M for housing projects
Hub nets $40M for housing projects

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