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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]
>>> Discuss the Boston bubble now!
 

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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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2009-11-30
Info/Broken? - Obama to push banks on mortgages
Discuss - Obama to push banks on mortgages
Obama to push banks on mortgages
2009-11-30
Info/Broken? - Harvard ignored warnings about investments - Advisers told Summers, others not to put so much cash in market; losses hit $1.8b
Discuss - Harvard ignored warnings about investments - Advisers told Summers, others not to put so much cash in market; losses hit $1.8b
Harvard ignored warnings about investments - Advisers told Summers, others not to put so much cash in market; losses hit $1.8b
2009-11-30
Info/Broken? - Census shows many suburbs north of Boston growing as newcomers move in
Discuss - Census shows many suburbs north of Boston growing as newcomers move in
Census shows many suburbs north of Boston growing as newcomers move in
2009-11-27
Info/Broken? - S&P/Case-Shiller Boston Snapshot, Nov 2009: Tax credit moved Boston prices above prediction of futures, but only in near term - future declines remain
Discuss - S&P/Case-Shiller Boston Snapshot, Nov 2009: Tax credit moved Boston prices above prediction of futures, but only in near term - future declines remain
S&P/Case-Shiller Boston Snapshot, Nov 2009: Tax credit moved Boston prices above prediction of futures, but only in near term - future declines remain
2009-11-27
Info/Broken? - Boston Bubble Brief, Oct 2009: Prices still declining despite tax handout, credit extension a major wild card which could affect Boston prices either way
Discuss - Boston Bubble Brief, Oct 2009: Prices still declining despite tax handout, credit extension a major wild card which could affect Boston prices either way
Boston Bubble Brief, Oct 2009: Prices still declining despite tax handout, credit extension a major wild card which could affect Boston prices either way
2009-11-27
Info/Broken? - Baker: The Fed Is Responsible for 10.2% Unemployment in the Same Way That Al Queda Was Responsible for September 11th
Discuss - Baker: The Fed Is Responsible for 10.2% Unemployment in the Same Way That Al Queda Was Responsible for September 11th
Baker: The Fed Is Responsible for 10.2% Unemployment in the Same Way That Al Queda Was Responsible for September 11th
2009-11-26
Info/Broken? - Massachusetts Association of Buyer Agents Thankful for Pork
Discuss - Massachusetts Association of Buyer Agents Thankful for Pork
Massachusetts Association of Buyer Agents Thankful for Pork
2009-11-25
Info/Broken? - WWF & Allianz: Sea level rise from climate change could jeopardize Boston assets worth $463B, Boston is city with 4th greatest exposure
Discuss - WWF & Allianz: Sea level rise from climate change could jeopardize Boston assets worth $463B, Boston is city with 4th greatest exposure
WWF & Allianz: Sea level rise from climate change could jeopardize Boston assets worth $463B, Boston is city with 4th greatest exposure
2009-11-25
Info/Broken? - Boston nominal condo prices fell 28% YOY in October
Discuss - Boston nominal condo prices fell 28% YOY in October
Boston nominal condo prices fell 28% YOY in October
2009-11-25
Info/Broken? - Green Line report criticized at Somerville hearing
Discuss - Green Line report criticized at Somerville hearing
Green Line report criticized at Somerville hearing
2009-11-25
Info/Broken? - Crashachusetts Existing Home Sales and Prices: October 2009
Discuss - Crashachusetts Existing Home Sales and Prices: October 2009
Crashachusetts Existing Home Sales and Prices: October 2009
2009-11-25
Info/Broken? - Federal Housing Subsidies Are Insane
Discuss - Federal Housing Subsidies Are Insane
Federal Housing Subsidies Are Insane
2009-11-24
Info/Broken? - MA SFH nominal median Oct 2009 vs 2008: MAR down 2.6%, Warren Group down 2.8%
Discuss - MA SFH nominal median Oct 2009 vs 2008: MAR down 2.6%, Warren Group down 2.8%
MA SFH nominal median Oct 2009 vs 2008: MAR down 2.6%, Warren Group down 2.8%
2009-11-24
Info/Broken? - Housing Developers Owe Millions To Towns - Official Says Weak Oversight Led To Lost Money
Discuss - Housing Developers Owe Millions To Towns - Official Says Weak Oversight Led To Lost Money
Housing Developers Owe Millions To Towns - Official Says Weak Oversight Led To Lost Money
2009-11-23
Info/Broken? - Something's gotta give - Either central banks are wrong to keep rates low, or markets are wrong to expect recovery
Discuss - Something's gotta give - Either central banks are wrong to keep rates low, or markets are wrong to expect recovery
Something's gotta give - Either central banks are wrong to keep rates low, or markets are wrong to expect recovery
2009-11-23
Info/Broken? - Middlesex North Registry of Deeds: November orders of notice have "exploded"
Discuss - Middlesex North Registry of Deeds: November orders of notice have "exploded"
Middlesex North Registry of Deeds: November orders of notice have "exploded"
2009-11-23
Info/Broken? - Unemployment Mashup, MA vs. RI September 2009 - MA down to 8.9%, RI up to 12.9%
Discuss - Unemployment Mashup, MA vs. RI September 2009 - MA down to 8.9%, RI up to 12.9%
Unemployment Mashup, MA vs. RI September 2009 - MA down to 8.9%, RI up to 12.9%
2009-11-23
Info/Broken? - FHA may hike fees on home loans
Discuss - FHA may hike fees on home loans
FHA may hike fees on home loans
2009-11-20
Info/Broken? - Barney Frank: (~3% down) loans for poor should max at $840K
Discuss - Barney Frank: (~3% down) loans for poor should max at $840K
Barney Frank: (~3% down) loans for poor should max at $840K
2009-11-20
Info/Broken? - State jobless rate declines, bucking trend - First drop since '07; economists remain wary
Discuss - State jobless rate declines, bucking trend - First drop since '07; economists remain wary
State jobless rate declines, bucking trend - First drop since '07; economists remain wary
2009-11-19
Info/Broken? - Bob Toll: "Yesterday's Sub-Prime Is Today's FHA... and I'm a Liberal Democrat"
Discuss - Bob Toll: "Yesterday's Sub-Prime Is Today's FHA... and I'm a Liberal Democrat"
Bob Toll: "Yesterday's Sub-Prime Is Today's FHA... and I'm a Liberal Democrat"
2009-11-19
Info/Broken? - No work for the weary
Discuss - No work for the weary
No work for the weary
2009-11-19
Info/Broken? - MA Oct foreclosures down 9% YOY, up 30% MOM
Discuss - MA Oct foreclosures down 9% YOY, up 30% MOM
MA Oct foreclosures down 9% YOY, up 30% MOM
2009-11-18
Info/Broken? - Homebuilding Drops as End of Tax Credit Loomed
Discuss - Homebuilding Drops as End of Tax Credit Loomed
Homebuilding Drops as End of Tax Credit Loomed
2009-11-18
Info/Broken? - 64% of Boston owners think they can sell their homes for more than they paid
Discuss - 64% of Boston owners think they can sell their homes for more than they paid
64% of Boston owners think they can sell their homes for more than they paid
2009-11-18
Info/Broken? - South End condo proposal takes one step forward
Discuss - South End condo proposal takes one step forward
South End condo proposal takes one step forward
2009-11-18
Info/Broken? - Home insurance: Buyer beware - Falling prices may mean lead existing owners to overpay
Discuss - Home insurance: Buyer beware - Falling prices may mean lead existing owners to overpay
Home insurance: Buyer beware - Falling prices may mean lead existing owners to overpay
2009-11-17
Info/Broken? - Frank pitches loans for jobless homeowners during HUD visit to MA
Discuss - Frank pitches loans for jobless homeowners during HUD visit to MA
Frank pitches loans for jobless homeowners during HUD visit to MA
2009-11-17
Info/Broken? - When did the housing bubble begin?
Discuss - When did the housing bubble begin?
When did the housing bubble begin?
2009-11-16
Info/Broken? - Hub's top-price condos finding few takers
Discuss - Hub's top-price condos finding few takers
Hub's top-price condos finding few takers
2009-11-13
Info/Broken? - Life on Severance: Comfort, Then Crisis
Discuss - Life on Severance: Comfort, Then Crisis
Life on Severance: Comfort, Then Crisis
2009-11-13
Info/Broken? - US Home-Purchase Index Plunges to Lowest Level Since 2000
Discuss - US Home-Purchase Index Plunges to Lowest Level Since 2000
US Home-Purchase Index Plunges to Lowest Level Since 2000
2009-11-13
Info/Broken? - Inflated claims of jobs created or saved
Discuss - Inflated claims of jobs created or saved
Inflated claims of jobs created or saved
2009-11-12
Info/Broken? - FHA Says Cash Reserves Are Down Sharply
Discuss - FHA Says Cash Reserves Are Down Sharply
FHA Says Cash Reserves Are Down Sharply
2009-11-12
Info/Broken? - Downturn has some law firms downsizing offices
Discuss - Downturn has some law firms downsizing offices
Downturn has some law firms downsizing offices
2009-11-12
Info/Broken? - Cracks in the Foundation of the Fed's Housing Fix - "Bigger Than Systemic Risk"
Discuss - Cracks in the Foundation of the Fed's Housing Fix - "Bigger Than Systemic Risk"
Cracks in the Foundation of the Fed's Housing Fix - "Bigger Than Systemic Risk"
2009-11-11
Info/Broken? - Economists: U.S. out of recession but Mass. isn't
Discuss - Economists: U.S. out of recession but Mass. isn't
Economists: U.S. out of recession but Mass. isn't
2009-11-11
Info/Broken? - Stimulus job boost in state exaggerated, review finds
Discuss - Stimulus job boost in state exaggerated, review finds
Stimulus job boost in state exaggerated, review finds
2009-11-11
Info/Broken? - Just 5% of Americans planning to buy house within a year, with top motivation being a belief that prices have "bottomed"
Discuss - Just 5% of Americans planning to buy house within a year, with top motivation being a belief that prices have "bottomed"
Just 5% of Americans planning to buy house within a year, with top motivation being a belief that prices have "bottomed"
2009-11-10
Info/Broken? - More job losses predicted for Massachusetts
Discuss - More job losses predicted for Massachusetts
More job losses predicted for Massachusetts
2009-11-10
Info/Broken? - Harvard's Glaeser: Expanded tax credit even worse, creates strong incentives for misuse and fraud, actually negates societal benefits of home ownership
Discuss - Harvard's Glaeser: Expanded tax credit even worse, creates strong incentives for misuse and fraud, actually negates societal benefits of home ownership
Harvard's Glaeser: Expanded tax credit even worse, creates strong incentives for misuse and fraud, actually negates societal benefits of home ownership
2009-11-10
Info/Broken? - Fannie Mae needs another bailout; Freddie Mac will need one
Discuss - Fannie Mae needs another bailout; Freddie Mac will need one
Fannie Mae needs another bailout; Freddie Mac will need one
2009-11-09
Info/Broken? - Michigan luring Bay State business
Discuss - Michigan luring Bay State business
Michigan luring Bay State business
2009-11-09
Info/Broken? - Steven Pearlstein: Home buyer credit is Washington's way to "spend a lot of money that they don't have in ways that won't work to help too many people who are neither desperate nor deserving"
Discuss - Steven Pearlstein: Home buyer credit is Washington's way to "spend a lot of money that they don't have in ways that won't work to help too many people who are neither desperate nor deserving"
Steven Pearlstein: Home buyer credit is Washington's way to "spend a lot of money that they don't have in ways that won't work to help too many people who are neither desperate nor deserving"
2009-11-06
Info/Broken? - House extends home buyer tax credit, now subsidizing the wealthy and existing owners
Discuss - House extends home buyer tax credit, now subsidizing the wealthy and existing owners
House extends home buyer tax credit, now subsidizing the wealthy and existing owners
2009-11-05
Info/Broken? - Barney Frank wants (you) to pay the mortgages of the unemployed
Discuss - Barney Frank wants (you) to pay the mortgages of the unemployed
Barney Frank wants (you) to pay the mortgages of the unemployed
2009-11-05
Info/Broken? - Pick-A-Writedown: Wells Fargo to shoehorn "Pick-A-Pay" borrowers into interest only loans
Discuss - Pick-A-Writedown: Wells Fargo to shoehorn "Pick-A-Pay" borrowers into interest only loans
Pick-A-Writedown: Wells Fargo to shoehorn "Pick-A-Pay" borrowers into interest only loans
2009-11-04
Info/Broken? - Senate extends home buyer tax credit, expands handout to high income earners and existing owners
Discuss - Senate extends home buyer tax credit, expands handout to high income earners and existing owners
Senate extends home buyer tax credit, expands handout to high income earners and existing owners
2009-11-04
Info/Broken? - Now's the time to rent in Boston
Discuss - Now's the time to rent in Boston
Now's the time to rent in Boston
2009-11-04
Info/Broken? - Middlesex North Registry of Deeds Oct 2009 Stats: deeds up 18%, orders of notice up 158%
Discuss - Middlesex North Registry of Deeds Oct 2009 Stats: deeds up 18%, orders of notice up 158%
Middlesex North Registry of Deeds Oct 2009 Stats: deeds up 18%, orders of notice up 158%
2009-11-03
Info/Broken? - Fed plans to stop mortgage purchases (and resultant rate suppression) in March, but could be thwarted by "nightmare scenario" compromising their independence
Discuss - Fed plans to stop mortgage purchases (and resultant rate suppression) in March, but could be thwarted by "nightmare scenario" compromising their independence
Fed plans to stop mortgage purchases (and resultant rate suppression) in March, but could be thwarted by "nightmare scenario" compromising their independence
2009-11-03
Info/Broken? - Amid epidemic of foreclosures, a crying need for legal aid
Discuss - Amid epidemic of foreclosures, a crying need for legal aid
Amid epidemic of foreclosures, a crying need for legal aid
2009-11-03
Info/Broken? - Real Estate Price Plunge Makes U.S. Homeownership Perilous Path
Discuss - Real Estate Price Plunge Makes U.S. Homeownership Perilous Path
Real Estate Price Plunge Makes U.S. Homeownership Perilous Path
2009-11-02
Info/Broken? - REDC Auction Today at Park Plaza
Discuss - REDC Auction Today at Park Plaza
REDC Auction Today at Park Plaza
2009-11-02
Info/Broken? - Banks, collection firms pursue claims after homes foreclosed
Discuss - Banks, collection firms pursue claims after homes foreclosed
Banks, collection firms pursue claims after homes foreclosed
2009-11-02
Info/Broken? - Brockton offers lesson in foreclosures - US officials tour city, see crisis up close
Discuss - Brockton offers lesson in foreclosures - US officials tour city, see crisis up close
Brockton offers lesson in foreclosures - US officials tour city, see crisis up close

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