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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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<< << << Show Recent Links
2010-04-30
Info/Broken? - Boston Bubble Wrap: The Real Story for MA - Mar 2010
Discuss - Boston Bubble Wrap: The Real Story for MA - Mar 2010
Boston Bubble Wrap: The Real Story for MA - Mar 2010
2010-04-30
Info/Broken? - Confusion, Criticism Mark Home Tax Credit's Expiration
Discuss - Confusion, Criticism Mark Home Tax Credit's Expiration
Confusion, Criticism Mark Home Tax Credit's Expiration
2010-04-29
Info/Broken? - W Hotel (and condo) Boston developer files for bankruptcy
Discuss - W Hotel (and condo) Boston developer files for bankruptcy
W Hotel (and condo) Boston developer files for bankruptcy
2010-04-29
Info/Broken? - Roubini Global Economics: Recent housing data consistent with predictions of double dip (subscription)
Discuss - Roubini Global Economics: Recent housing data consistent with predictions of double dip (subscription)
Roubini Global Economics: Recent housing data consistent with predictions of double dip (subscription)
2010-04-28
Info/Broken? - S&P/Case-Shiller: Boston area SFH prices in Feb up 1.8% YOY (nominal)
Discuss - S&P/Case-Shiller: Boston area SFH prices in Feb up 1.8% YOY (nominal)
S&P/Case-Shiller: Boston area SFH prices in Feb up 1.8% YOY (nominal)
2010-04-28
Info/Broken? - MAR: MA SFH median in Mar up 9.8% YOY (nominal)
Discuss - MAR: MA SFH median in Mar up 9.8% YOY (nominal)
MAR: MA SFH median in Mar up 9.8% YOY (nominal)
2010-04-28
Info/Broken? - Properties with 2nd mortgages represent disproportionate share of foreclosure
Discuss - Properties with 2nd mortgages represent disproportionate share of foreclosure
Properties with 2nd mortgages represent disproportionate share of foreclosure
2010-04-28
Info/Broken? - E-mail suggests Goldman knew Harvard would lose
Discuss - E-mail suggests Goldman knew Harvard would lose
E-mail suggests Goldman knew Harvard would lose
2010-04-27
Info/Broken? - Warren Group: Mar 2010 MA SFH median up 8.4% (nominal) YOY
Discuss - Warren Group: Mar 2010 MA SFH median up 8.4% (nominal) YOY
Warren Group: Mar 2010 MA SFH median up 8.4% (nominal) YOY
2010-04-26
Info/Broken? - $8K tax credit for homebuyers expires Friday (for real this time?)
Discuss - $8K tax credit for homebuyers expires Friday (for real this time?)
$8K tax credit for homebuyers expires Friday (for real this time?)
2010-04-26
Info/Broken? - Mortgage companies want to force taxpayers to loan to very recent defaulters
Discuss - Mortgage companies want to force taxpayers to loan to very recent defaulters
Mortgage companies want to force taxpayers to loan to very recent defaulters
2010-04-23
Info/Broken? - Mass. foreclosure petitions rise 21% - Data for March show housing recovery is still on shaky ground
Discuss - Mass. foreclosure petitions rise 21% - Data for March show housing recovery is still on shaky ground
Mass. foreclosure petitions rise 21% - Data for March show housing recovery is still on shaky ground
2010-04-23
Info/Broken? - Credit rating agencies had doubts by 2006
Discuss - Credit rating agencies had doubts by 2006
Credit rating agencies had doubts by 2006
2010-04-23
Info/Broken? - New paperwork rules meant to protect home buyers are creating new headaches
Discuss - New paperwork rules meant to protect home buyers are creating new headaches
New paperwork rules meant to protect home buyers are creating new headaches
2010-04-22
Info/Broken? - Homebuyers Tax Credit Causes Jump In Foreclosures
Discuss - Homebuyers Tax Credit Causes Jump In Foreclosures
Homebuyers Tax Credit Causes Jump In Foreclosures
2010-04-22
Info/Broken? - Mass. foreclosure activity is up sharply
Discuss - Mass. foreclosure activity is up sharply
Mass. foreclosure activity is up sharply
2010-04-22
Info/Broken? - Price to rent ratio in Boston, etc.
Discuss - Price to rent ratio in Boston, etc.
Price to rent ratio in Boston, etc.
2010-04-21
Info/Broken? - The Great Housing Recession Continues
Discuss - The Great Housing Recession Continues
The Great Housing Recession Continues
2010-04-21
Info/Broken? - Stone Place construction to begin
Discuss - Stone Place construction to begin
Stone Place construction to begin
2010-04-21
Info/Broken? - Mortgage Servicer Profits May Threaten Obama Housing Programs
Discuss - Mortgage Servicer Profits May Threaten Obama Housing Programs
Mortgage Servicer Profits May Threaten Obama Housing Programs
2010-04-20
Info/Broken? - Fannie and Freddie Amnesia
Discuss - Fannie and Freddie Amnesia
Fannie and Freddie Amnesia
2010-04-20
Info/Broken? - Crack Shack or Mansion? (Vancouver)
Discuss - Crack Shack or Mansion? (Vancouver)
Crack Shack or Mansion? (Vancouver)
2010-04-20
Info/Broken? - Mortgage aid program said more vulnerable to scams
Discuss - Mortgage aid program said more vulnerable to scams
Mortgage aid program said more vulnerable to scams
2010-04-20
Info/Broken? - Sinking Ships - MA vs. RI March 2010
Discuss - Sinking Ships - MA vs. RI March 2010
Sinking Ships - MA vs. RI March 2010
2010-04-19
Info/Broken? - Goldman's brass had a hand in mortgages - Bank profited on rise, fall of housing
Discuss - Goldman's brass had a hand in mortgages - Bank profited on rise, fall of housing
Goldman's brass had a hand in mortgages - Bank profited on rise, fall of housing
2010-04-16
Info/Broken? - Developer sells Back Bay site
Discuss - Developer sells Back Bay site
Developer sells Back Bay site
2010-04-16
Info/Broken? - BoA sees higher loss in home loans
Discuss - BoA sees higher loss in home loans
BoA sees higher loss in home loans
2010-04-15
Info/Broken? - Mass. unemployment ticked down in March
Discuss - Mass. unemployment ticked down in March
Mass. unemployment ticked down in March
2010-04-15
Info/Broken? - Massachusetts #10 in taxes levied per person
Discuss - Massachusetts #10 in taxes levied per person
Massachusetts #10 in taxes levied per person
2010-04-15
Info/Broken? - Fed reports see state, nation on road to recovery
Discuss - Fed reports see state, nation on road to recovery
Fed reports see state, nation on road to recovery
2010-04-14
Info/Broken? - Watchdog: Obama foreclosure plan leaves many out
Discuss - Watchdog: Obama foreclosure plan leaves many out
Watchdog: Obama foreclosure plan leaves many out
2010-04-14
Info/Broken? - Even with low inflation, households still squeezed
Discuss - Even with low inflation, households still squeezed
Even with low inflation, households still squeezed
2010-04-13
Info/Broken? - Jason Varitek strikes out! (Selling Newton home)
Discuss - Jason Varitek strikes out! (Selling Newton home)
Jason Varitek strikes out! (Selling Newton home)
2010-04-13
Info/Broken? - 1st Globe Real Estate Now meet-up on May 4th
Discuss - 1st Globe Real Estate Now meet-up on May 4th
1st Globe Real Estate Now meet-up on May 4th
2010-04-13
Info/Broken? - US homeowners making sacrifices in tough economy
Discuss - US homeowners making sacrifices in tough economy
US homeowners making sacrifices in tough economy
2010-04-12
Info/Broken? - New Freddie Mac CEO earned $800K last year
Discuss - New Freddie Mac CEO earned $800K last year
New Freddie Mac CEO earned $800K last year
2010-04-12
Info/Broken? - NorthPoint continues to go south
Discuss - NorthPoint continues to go south
NorthPoint continues to go south
2010-04-12
Info/Broken? - Taxes on Mortgage Debt Relief
Discuss - Taxes on Mortgage Debt Relief
Taxes on Mortgage Debt Relief
2010-04-12
Info/Broken? - This American Life: Eat my Shorts
Discuss - This American Life: Eat my Shorts
This American Life: Eat my Shorts
2010-04-11
Info/Broken? - Prof. Shiller: Don't Bet the Farm on the Housing Recovery
Discuss - Prof. Shiller: Don't Bet the Farm on the Housing Recovery
Prof. Shiller: Don't Bet the Farm on the Housing Recovery
2010-04-11
Info/Broken? - Consumers in U.S. Face End of Era of Cheap Credit
Discuss - Consumers in U.S. Face End of Era of Cheap Credit
Consumers in U.S. Face End of Era of Cheap Credit
2010-04-09
Info/Broken? - Tax credit leads to irrational exuberance around Boston
Discuss - Tax credit leads to irrational exuberance around Boston
Tax credit leads to irrational exuberance around Boston
2010-04-09
Info/Broken? - Middlesex North Registry of Deeds condo stats: those who bought in 2005 with less than 20% down are now underwater (nominally)
Discuss - Middlesex North Registry of Deeds condo stats: those who bought in 2005 with less than 20% down are now underwater (nominally)
Middlesex North Registry of Deeds condo stats: those who bought in 2005 with less than 20% down are now underwater (nominally)
2010-04-09
Info/Broken? - Massachusetts Realtors gear up for 'nationwide open house'
Discuss - Massachusetts Realtors gear up for 'nationwide open house'
Massachusetts Realtors gear up for 'nationwide open house'
2010-04-09
Info/Broken? - Former Quincy lawyer sentenced to jail time for his role in mortgage fraud scheme
Discuss - Former Quincy lawyer sentenced to jail time for his role in mortgage fraud scheme
Former Quincy lawyer sentenced to jail time for his role in mortgage fraud scheme
2010-04-08
Info/Broken? - Mass Delusion: The National Housing Survey and the real estate bear market
Discuss - Mass Delusion: The National Housing Survey and the real estate bear market
Mass Delusion: The National Housing Survey and the real estate bear market
2010-04-08
Info/Broken? - Record Mass. Rains Tighten Spigot For Home Financing
Discuss - Record Mass. Rains Tighten Spigot For Home Financing
Record Mass. Rains Tighten Spigot For Home Financing
2010-04-08
Info/Broken? - Sell! Sell! Sell! The tax credit stampede gets rolling
Discuss - Sell! Sell! Sell! The tax credit stampede gets rolling
Sell! Sell! Sell! The tax credit stampede gets rolling
2010-04-08
Info/Broken? - Mortgage rate jumps to 5.3% - Home buyers scramble to lock in while they can
Discuss - Mortgage rate jumps to 5.3% - Home buyers scramble to lock in while they can
Mortgage rate jumps to 5.3% - Home buyers scramble to lock in while they can
2010-04-08
Info/Broken? - Beacon Hill auction fiasco actually a "success," marketing firm insists
Discuss - Beacon Hill auction fiasco actually a "success," marketing firm insists
Beacon Hill auction fiasco actually a "success," marketing firm insists
2010-04-07
Info/Broken? - Is Boston entering a long term bear run?
Discuss - Is Boston entering a long term bear run?
Is Boston entering a long term bear run?
2010-04-07
Info/Broken? - Faith in homeownership drops, Fannie Mae poll shows
Discuss - Faith in homeownership drops, Fannie Mae poll shows
Faith in homeownership drops, Fannie Mae poll shows
2010-04-07
Info/Broken? - Homeowner at end of his rope; refinancing program offers no relief
Discuss - Homeowner at end of his rope; refinancing program offers no relief
Homeowner at end of his rope; refinancing program offers no relief
2010-04-06
Info/Broken? - MA SFH pending home sales up 27% YOY in March
Discuss - MA SFH pending home sales up 27% YOY in March
MA SFH pending home sales up 27% YOY in March
2010-04-06
Info/Broken? - Part-time Florida couple must pay Bay State taxes
Discuss - Part-time Florida couple must pay Bay State taxes
Part-time Florida couple must pay Bay State taxes
2010-04-05
Info/Broken? - Gov't aims to help more "underwater" homeowners
Discuss - Gov't aims to help more "underwater" homeowners
Gov't aims to help more "underwater" homeowners
2010-04-05
Info/Broken? - The Depreciating American Dream, Part 5: FAQ Who Should Buy A Home, And When?
Discuss - The Depreciating American Dream, Part 5: FAQ Who Should Buy A Home, And When?
The Depreciating American Dream, Part 5: FAQ Who Should Buy A Home, And When?
2010-04-02
Info/Broken? - Boston Bubble Wrap, Feb 2010: Rate of change in median has stopped increasing
Discuss - Boston Bubble Wrap, Feb 2010: Rate of change in median has stopped increasing
Boston Bubble Wrap, Feb 2010: Rate of change in median has stopped increasing
2010-04-02
Info/Broken? - Middlesex North Registry of Deeds, Mar 2010 vs Mar 2009: Deeds down 6%, foreclosure deeds up 73%, orders of notice up 160%
Discuss - Middlesex North Registry of Deeds, Mar 2010 vs Mar 2009: Deeds down 6%, foreclosure deeds up 73%, orders of notice up 160%
Middlesex North Registry of Deeds, Mar 2010 vs Mar 2009: Deeds down 6%, foreclosure deeds up 73%, orders of notice up 160%
2010-04-02
Info/Broken? - Are Warren Group foreclosure stats repeatedly lower than registries'?
Discuss - Are Warren Group foreclosure stats repeatedly lower than registries'?
Are Warren Group foreclosure stats repeatedly lower than registries'?
2010-04-02
Info/Broken? - Struggling Homeowners Walking On Mortgages - Experts Say Many Can Afford to Make Payments
Discuss - Struggling Homeowners Walking On Mortgages - Experts Say Many Can Afford to Make Payments
Struggling Homeowners Walking On Mortgages - Experts Say Many Can Afford to Make Payments
2010-04-01
Info/Broken? - Fenway condos face foreclosure
Discuss - Fenway condos face foreclosure
Fenway condos face foreclosure
2010-04-01
Info/Broken? - The Depreciating American Dream, Part 4: A Third Way?
Discuss - The Depreciating American Dream, Part 4: A Third Way?
The Depreciating American Dream, Part 4: A Third Way?

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