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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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2009-12-31
Info/Broken? - Foreclosures worm way into tony towns including Nantucket, Concord, Weston, and Winchester
Discuss - Foreclosures worm way into tony towns including Nantucket, Concord, Weston, and Winchester
Foreclosures worm way into tony towns including Nantucket, Concord, Weston, and Winchester
2009-12-31
Info/Broken? - Storm on homefront - While takings fall, legal actions to foreclose surge
Discuss - Storm on homefront - While takings fall, legal actions to foreclose surge
Storm on homefront - While takings fall, legal actions to foreclose surge
2009-12-31
Info/Broken? - Mortgage Bond Rally May End, Rates Rise as Fed Stops Purchases
Discuss - Mortgage Bond Rally May End, Rates Rise as Fed Stops Purchases
Mortgage Bond Rally May End, Rates Rise as Fed Stops Purchases
2009-12-30
Info/Broken? - MA wages and salaries down 5% YOY in 2009 Q3
Discuss - MA wages and salaries down 5% YOY in 2009 Q3
MA wages and salaries down 5% YOY in 2009 Q3
2009-12-30
Info/Broken? - Beantown Bust, Oct 2009: Government housing tax gimmick distorted low end, but high end continued decline
Discuss - Beantown Bust, Oct 2009: Government housing tax gimmick distorted low end, but high end continued decline
Beantown Bust, Oct 2009: Government housing tax gimmick distorted low end, but high end continued decline
2009-12-30
Info/Broken? - Herald: Turnaround in housing market expected - Hub likely near homestretch
Discuss - Herald: Turnaround in housing market expected - Hub likely near homestretch
Herald: Turnaround in housing market expected - Hub likely near homestretch
2009-12-30
Info/Broken? - Are Homes now "Cheap"?
Discuss - Are Homes now "Cheap"?
Are Homes now "Cheap"?
2009-12-30
Info/Broken? - Texas' now-strong banks hold lessons for rest of U.S.
Discuss - Texas' now-strong banks hold lessons for rest of U.S.
Texas' now-strong banks hold lessons for rest of U.S.
2009-12-30
Info/Broken? - Quincy man to plead guilty in $3.2M fraud scheme
Discuss - Quincy man to plead guilty in $3.2M fraud scheme
Quincy man to plead guilty in $3.2M fraud scheme
2009-12-29
Info/Broken? - Nominal Boston home prices dipped a bit in October
Discuss - Nominal Boston home prices dipped a bit in October
Nominal Boston home prices dipped a bit in October
2009-12-29
Info/Broken? - MA housing market highly dependent on extremely low interest rates and government life support
Discuss - MA housing market highly dependent on extremely low interest rates and government life support
MA housing market highly dependent on extremely low interest rates and government life support
2009-12-28
Info/Broken? - Case: Cautiously Sees "First Steps Back" For Housing Market
Discuss - Case: Cautiously Sees "First Steps Back" For Housing Market
Case: Cautiously Sees "First Steps Back" For Housing Market
2009-12-25
Info/Broken? - Boston Bubble Brief, Nov 2009: Real prices still falling
Discuss - Boston Bubble Brief, Nov 2009: Real prices still falling
Boston Bubble Brief, Nov 2009: Real prices still falling
2009-12-24
Info/Broken? - Crashachusetts Existing Home Sales and Prices: November 2009
Discuss - Crashachusetts Existing Home Sales and Prices: November 2009
Crashachusetts Existing Home Sales and Prices: November 2009
2009-12-24
Info/Broken? - Massachusetts sees population increase for first time in decade but may still lose congressional seat
Discuss - Massachusetts sees population increase for first time in decade but may still lose congressional seat
Massachusetts sees population increase for first time in decade but may still lose congressional seat
2009-12-24
Info/Broken? - Hefty pay expected for chiefs of Freddie, Fannie
Discuss - Hefty pay expected for chiefs of Freddie, Fannie
Hefty pay expected for chiefs of Freddie, Fannie
2009-12-23
Info/Broken? - Will luxury "short sales" drive housing prices down across MA?
Discuss - Will luxury "short sales" drive housing prices down across MA?
Will luxury "short sales" drive housing prices down across MA?
2009-12-23
Info/Broken? - 6 accused in Mass. mortgage scheme
Discuss - 6 accused in Mass. mortgage scheme
6 accused in Mass. mortgage scheme
2009-12-22
Info/Broken? - MA SFH Nov 2009 vs 2008 - Warren Group: median down 1.3% (nominal), sales up 59.1%; MAR: median up 0.7% (nominal), sales up 63.1%
Discuss - MA SFH Nov 2009 vs 2008 - Warren Group: median down 1.3% (nominal), sales up 59.1%; MAR: median up 0.7% (nominal), sales up 63.1%
MA SFH Nov 2009 vs 2008 - Warren Group: median down 1.3% (nominal), sales up 59.1%; MAR: median up 0.7% (nominal), sales up 63.1%
2009-12-21
Info/Broken? - MA vs. RI Unemployment November 2009
Discuss - MA vs. RI Unemployment November 2009
MA vs. RI Unemployment November 2009
2009-12-18
Info/Broken? - Developer's easy-money pitch left a trail of ruin - Of 169 condos sold, most in Dorchester, more than half are now in foreclosure
Discuss - Developer's easy-money pitch left a trail of ruin - Of 169 condos sold, most in Dorchester, more than half are now in foreclosure
Developer's easy-money pitch left a trail of ruin - Of 169 condos sold, most in Dorchester, more than half are now in foreclosure
2009-12-18
Info/Broken? - Homeowners bet on a full house - Sellers hiring people to fill vacant homes
Discuss - Homeowners bet on a full house - Sellers hiring people to fill vacant homes
Homeowners bet on a full house - Sellers hiring people to fill vacant homes
2009-12-18
Info/Broken? - Bay State jobless rate falls to 8.8%
Discuss - Bay State jobless rate falls to 8.8%
Bay State jobless rate falls to 8.8%
2009-12-17
Info/Broken? - State tax revenue on the rebound, officials now say
Discuss - State tax revenue on the rebound, officials now say
State tax revenue on the rebound, officials now say
2009-12-17
Info/Broken? - Buying a home as an inflation hedge
Discuss - Buying a home as an inflation hedge
Buying a home as an inflation hedge
2009-12-17
Info/Broken? - Nantucket loses another house to erosion
Discuss - Nantucket loses another house to erosion
Nantucket loses another house to erosion
2009-12-16
Info/Broken? - MAR president Sears: November increase in sales in home region "entirely due to the tax credit"
Discuss - MAR president Sears: November increase in sales in home region "entirely due to the tax credit"
MAR president Sears: November increase in sales in home region "entirely due to the tax credit"
2009-12-15
Info/Broken? - U.S. lawmakers push covered bonds in preparation for retreat of Fannie Mae and Freddie Mac
Discuss - U.S. lawmakers push covered bonds in preparation for retreat of Fannie Mae and Freddie Mac
U.S. lawmakers push covered bonds in preparation for retreat of Fannie Mae and Freddie Mac
2009-12-15
Info/Broken? - Nouvelle at Natick posts 25 - 30 sales since auction
Discuss - Nouvelle at Natick posts 25 - 30 sales since auction
Nouvelle at Natick posts 25 - 30 sales since auction
2009-12-15
Info/Broken? - Brookline homes held value in 2009, says tax assessor
Discuss - Brookline homes held value in 2009, says tax assessor
Brookline homes held value in 2009, says tax assessor
2009-12-14
Info/Broken? - Property values down in Boston, but everyone will pay a lot more in taxes
Discuss - Property values down in Boston, but everyone will pay a lot more in taxes
Property values down in Boston, but everyone will pay a lot more in taxes
2009-12-11
Info/Broken? - Randolph woman pleads guilty to mortgage fraud
Discuss - Randolph woman pleads guilty to mortgage fraud
Randolph woman pleads guilty to mortgage fraud
2009-12-11
Info/Broken? - Toxicity important to consider when buying
Discuss - Toxicity important to consider when buying
Toxicity important to consider when buying
2009-12-11
Info/Broken? - Professor Case retiring
Discuss - Professor Case retiring
Professor Case retiring
2009-12-10
Info/Broken? - Zandi projects 4.56% decline in Boston prices in 2010
Discuss - Zandi projects 4.56% decline in Boston prices in 2010
Zandi projects 4.56% decline in Boston prices in 2010
2009-12-09
Info/Broken? - Boston ranks 3rd in home-price discounts
Discuss - Boston ranks 3rd in home-price discounts
Boston ranks 3rd in home-price discounts
2009-12-09
Info/Broken? - Middlesex North Registry of Deeds: Increase in town foreclosure filings
Discuss - Middlesex North Registry of Deeds: Increase in town foreclosure filings
Middlesex North Registry of Deeds: Increase in town foreclosure filings
2009-12-09
Info/Broken? - FHA's New Missions: Help affluent buy homes, make housing unaffordable
Discuss - FHA's New Missions: Help affluent buy homes, make housing unaffordable
FHA's New Missions: Help affluent buy homes, make housing unaffordable
2009-12-09
Info/Broken? - Zillow estimate for Boston up 1.5% YOY nominally
Discuss - Zillow estimate for Boston up 1.5% YOY nominally
Zillow estimate for Boston up 1.5% YOY nominally
2009-12-08
Info/Broken? - Mass. loan delinquencies seen falling in 2010
Discuss - Mass. loan delinquencies seen falling in 2010
Mass. loan delinquencies seen falling in 2010
2009-12-08
Info/Broken? - Feds charge Stonecleave Village condos with bias against kids
Discuss - Feds charge Stonecleave Village condos with bias against kids
Feds charge Stonecleave Village condos with bias against kids
2009-12-07
Info/Broken? - 60% of all MA subprime defaults started with a prime mortgage
Discuss - 60% of all MA subprime defaults started with a prime mortgage
60% of all MA subprime defaults started with a prime mortgage
2009-12-07
Info/Broken? - Still No Closure On Foreclosure Crisis
Discuss - Still No Closure On Foreclosure Crisis
Still No Closure On Foreclosure Crisis
2009-12-07
Info/Broken? - Herald: More house hunters look during holidays
Discuss - Herald: More house hunters look during holidays
Herald: More house hunters look during holidays
2009-12-04
Info/Broken? - Off-market listings outpace sales in MA
Discuss - Off-market listings outpace sales in MA
Off-market listings outpace sales in MA
2009-12-04
Info/Broken? - Zandi: U.S. housing market meltdown not over yet
Discuss - Zandi: U.S. housing market meltdown not over yet
Zandi: U.S. housing market meltdown not over yet
2009-12-04
Info/Broken? - When and why to use a lawyer (as a buyer)?
Discuss - When and why to use a lawyer (as a buyer)?
When and why to use a lawyer (as a buyer)?
2009-12-03
Info/Broken? - Fleeing Massachusetts
Discuss - Fleeing Massachusetts
Fleeing Massachusetts
2009-12-03
Info/Broken? - N.E. economy poised for recovery, Fed survey says
Discuss - N.E. economy poised for recovery, Fed survey says
N.E. economy poised for recovery, Fed survey says
2009-12-03
Info/Broken? - Government should stop insuring mortgages
Discuss - Government should stop insuring mortgages
Government should stop insuring mortgages
2009-12-02
Info/Broken? - Middlesex North Registry of Deeds Nov 2009 Stats: Deeds up 24% YOY, orders of notice up 96%
Discuss - Middlesex North Registry of Deeds Nov 2009 Stats: Deeds up 24% YOY, orders of notice up 96%
Middlesex North Registry of Deeds Nov 2009 Stats: Deeds up 24% YOY, orders of notice up 96%
2009-12-01
Info/Broken? - Pending Sales of U.S. Existing Homes Rose in October
Discuss - Pending Sales of U.S. Existing Homes Rose in October
Pending Sales of U.S. Existing Homes Rose in October
2009-12-01
Info/Broken? - Design firm hit by economy, loan woes
Discuss - Design firm hit by economy, loan woes
Design firm hit by economy, loan woes
2009-12-01
Info/Broken? - Law professor: Walk away - But is this the moral equivalent of theft?
Discuss - Law professor: Walk away - But is this the moral equivalent of theft?
Law professor: Walk away - But is this the moral equivalent of theft?

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