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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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2010-05-31
Info/Broken? - Middlesex North Registry of Deeds, May 2010: Deeds up 70%, foreclosure deeds up 136%, orders of notice up 81%
Discuss - Middlesex North Registry of Deeds, May 2010: Deeds up 70%, foreclosure deeds up 136%, orders of notice up 81%
Middlesex North Registry of Deeds, May 2010: Deeds up 70%, foreclosure deeds up 136%, orders of notice up 81%
2010-05-31
Info/Broken? - Foreclosure hotspots in Greater Boston
Discuss - Foreclosure hotspots in Greater Boston
Foreclosure hotspots in Greater Boston
2010-05-28
Info/Broken? - S&P/Case-Shiller Boston futures snapshot: May 25, 2010
Discuss - S&P/Case-Shiller Boston futures snapshot: May 25, 2010
S&P/Case-Shiller Boston futures snapshot: May 25, 2010
2010-05-28
Info/Broken? - Boston Bubble Wrap, Apr 2010: Fifth straight month of YOY increases for MA SFH real median
Discuss - Boston Bubble Wrap, Apr 2010: Fifth straight month of YOY increases for MA SFH real median
Boston Bubble Wrap, Apr 2010: Fifth straight month of YOY increases for MA SFH real median
2010-05-27
Info/Broken? - Bad at Math? You're More Likely to Default on Your Mortgage
Discuss - Bad at Math? You're More Likely to Default on Your Mortgage
Bad at Math? You're More Likely to Default on Your Mortgage
2010-05-26
Info/Broken? - Crashachusetts: Home Sales and Prices April 2010
Discuss - Crashachusetts: Home Sales and Prices April 2010
Crashachusetts: Home Sales and Prices April 2010
2010-05-26
Info/Broken? - Boston Case-Shiller: High Tier Dips, Low & Mid Gain
Discuss - Boston Case-Shiller: High Tier Dips, Low & Mid Gain
Boston Case-Shiller: High Tier Dips, Low & Mid Gain
2010-05-25
Info/Broken? - MA SFH median for Apr 2010 vs Apr 2009 - MAR: up 7.3% (nominal), Warren Group: up 7.1% (nominal)
Discuss - MA SFH median for Apr 2010 vs Apr 2009 - MAR: up 7.3% (nominal), Warren Group: up 7.1% (nominal)
MA SFH median for Apr 2010 vs Apr 2009 - MAR: up 7.3% (nominal), Warren Group: up 7.1% (nominal)
2010-05-25
Info/Broken? - Think housing is recovering? Think again.
Discuss - Think housing is recovering? Think again.
Think housing is recovering? Think again.
2010-05-24
Info/Broken? - Sales of previously owned US homes up 7.6% in April as tax credit expired
Discuss - Sales of previously owned US homes up 7.6% in April as tax credit expired
Sales of previously owned US homes up 7.6% in April as tax credit expired
2010-05-21
Info/Broken? - Foreclosure crisis hits home in Somerville
Discuss - Foreclosure crisis hits home in Somerville
Foreclosure crisis hits home in Somerville
2010-05-21
Info/Broken? - Bay State "firmly on track" for economic recovery
Discuss - Bay State "firmly on track" for economic recovery
Bay State "firmly on track" for economic recovery
2010-05-20
Info/Broken? - Fed in no rush to sell its mortgage assets
Discuss - Fed in no rush to sell its mortgage assets
Fed in no rush to sell its mortgage assets
2010-05-19
Info/Broken? - Subprime borrowing and innumeracy - The role of mathematics in America's housing bust
Discuss - Subprime borrowing and innumeracy - The role of mathematics in America's housing bust
Subprime borrowing and innumeracy - The role of mathematics in America's housing bust
2010-05-19
Info/Broken? - Survey of economists: US home prices to begin 2.3% per year rebound in 2011
Discuss - Survey of economists: US home prices to begin 2.3% per year rebound in 2011
Survey of economists: US home prices to begin 2.3% per year rebound in 2011
2010-05-19
Info/Broken? - Foreclosures spark a new business: Specializing in short sales
Discuss - Foreclosures spark a new business: Specializing in short sales
Foreclosures spark a new business: Specializing in short sales
2010-05-18
Info/Broken? - Mass. foreclosures up 80% from last April
Discuss - Mass. foreclosures up 80% from last April
Mass. foreclosures up 80% from last April
2010-05-18
Info/Broken? - Foreclosures loom over Fenway condo project for gays
Discuss - Foreclosures loom over Fenway condo project for gays
Foreclosures loom over Fenway condo project for gays
2010-05-18
Info/Broken? - More homeowners quitting federal loan aid program
Discuss - More homeowners quitting federal loan aid program
More homeowners quitting federal loan aid program
2010-05-17
Info/Broken? - 41 foreclosed condos fetch $13.5M - Developer aims for Fenway-area hit
Discuss - 41 foreclosed condos fetch $13.5M - Developer aims for Fenway-area hit
41 foreclosed condos fetch $13.5M - Developer aims for Fenway-area hit
2010-05-13
Info/Broken? - Housing Optimists Are "Not Paying Attention" to the Facts, Says Dean Baker
Discuss - Housing Optimists Are "Not Paying Attention" to the Facts, Says Dean Baker
Housing Optimists Are "Not Paying Attention" to the Facts, Says Dean Baker
2010-05-13
Info/Broken? - Real estate firm, broker settle claims they threatened tenants in foreclosed properties
Discuss - Real estate firm, broker settle claims they threatened tenants in foreclosed properties
Real estate firm, broker settle claims they threatened tenants in foreclosed properties
2010-05-12
Info/Broken? - GOP Fails In Bid To End Support For Fannie, Freddie
Discuss - GOP Fails In Bid To End Support For Fannie, Freddie
GOP Fails In Bid To End Support For Fannie, Freddie
2010-05-12
Info/Broken? - Senate votes to examine Federal Reserve lending
Discuss - Senate votes to examine Federal Reserve lending
Senate votes to examine Federal Reserve lending
2010-05-11
Info/Broken? - Don't deduct mortgage debt - tax it instead
Discuss - Don't deduct mortgage debt - tax it instead
Don't deduct mortgage debt - tax it instead
2010-05-11
Info/Broken? - MAR: MA SFH pending home sales up 25% YOY in April
Discuss - MAR: MA SFH pending home sales up 25% YOY in April
MAR: MA SFH pending home sales up 25% YOY in April
2010-05-11
Info/Broken? - MAR: Sentiment index positive for first time, even post-credit "members feel prices will continue to move up"
Discuss - MAR: Sentiment index positive for first time, even post-credit "members feel prices will continue to move up"
MAR: Sentiment index positive for first time, even post-credit "members feel prices will continue to move up"
2010-05-10
Info/Broken? - Support for Fannie and Freddie yet another backdoor bailout of nation's banks
Discuss - Support for Fannie and Freddie yet another backdoor bailout of nation's banks
Support for Fannie and Freddie yet another backdoor bailout of nation's banks
2010-05-10
Info/Broken? - Fannie narrows loss (to only $13.1B/Q); asks Treasury for more cash
Discuss - Fannie narrows loss (to only $13.1B/Q); asks Treasury for more cash
Fannie narrows loss (to only $13.1B/Q); asks Treasury for more cash
2010-05-07
Info/Broken? - Middlesex North Registry of Deeds: April was busy, but only compared to 2009 and 2008
Discuss - Middlesex North Registry of Deeds: April was busy, but only compared to 2009 and 2008
Middlesex North Registry of Deeds: April was busy, but only compared to 2009 and 2008
2010-05-07
Info/Broken? - Foreclosures plague Massachusetts housing market
Discuss - Foreclosures plague Massachusetts housing market
Foreclosures plague Massachusetts housing market
2010-05-07
Info/Broken? - A tax break that is breaking us
Discuss - A tax break that is breaking us
A tax break that is breaking us
2010-05-06
Info/Broken? - Freddie Mac asks for yet another 10.6 billion dollar bailout
Discuss - Freddie Mac asks for yet another 10.6 billion dollar bailout
Freddie Mac asks for yet another 10.6 billion dollar bailout
2010-05-06
Info/Broken? - Keep interest rates low, Boston Fed chief says
Discuss - Keep interest rates low, Boston Fed chief says
Keep interest rates low, Boston Fed chief says
2010-05-05
Info/Broken? - Middlesex North Registry of Deeds, Apr 2010 vs Apr 2009: Deeds up 15%, foreclosure deeds up 244%, orders of notice up 62%
Discuss - Middlesex North Registry of Deeds, Apr 2010 vs Apr 2009: Deeds up 15%, foreclosure deeds up 244%, orders of notice up 62%
Middlesex North Registry of Deeds, Apr 2010 vs Apr 2009: Deeds up 15%, foreclosure deeds up 244%, orders of notice up 62%
2010-05-05
Info/Broken? - WBUR: The U.S. Real Estate Future
Discuss - WBUR: The U.S. Real Estate Future
WBUR: The U.S. Real Estate Future
2010-05-04
Info/Broken? - Dead credit bounce - MA SFH under agreement up 25% YOY in April
Discuss - Dead credit bounce - MA SFH under agreement up 25% YOY in April
Dead credit bounce - MA SFH under agreement up 25% YOY in April
2010-05-03
Info/Broken? - Greenspan Wanted Housing-Bubble Dissent Kept Secret
Discuss - Greenspan Wanted Housing-Bubble Dissent Kept Secret
Greenspan Wanted Housing-Bubble Dissent Kept Secret
2010-05-03
Info/Broken? - Case-Shiller: Low Tier Home Prices Fall Off in February
Discuss - Case-Shiller: Low Tier Home Prices Fall Off in February
Case-Shiller: Low Tier Home Prices Fall Off in February
2010-05-03
Info/Broken? - Fed stimulus plan funded 11,692 Mass. jobs in Q1
Discuss - Fed stimulus plan funded 11,692 Mass. jobs in Q1
Fed stimulus plan funded 11,692 Mass. jobs in Q1
2010-05-03
Info/Broken? - NOVA: Mind over money
Discuss - NOVA: Mind over money
NOVA: Mind over money
2010-05-03
Info/Broken? - Dong, dong... the tax credit is dead
Discuss - Dong, dong... the tax credit is dead
Dong, dong... the tax credit is dead

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