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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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2010-12-31
Info/Broken? - Mass. is slowest in the nation to initiate foreclosures at 373 days
Discuss - Mass. is slowest in the nation to initiate foreclosures at 373 days
Mass. is slowest in the nation to initiate foreclosures at 373 days
2010-12-31
Info/Broken? - Is the mortgage deduction dying? Lawmakers weigh big revamp of tax break
Discuss - Is the mortgage deduction dying? Lawmakers weigh big revamp of tax break
Is the mortgage deduction dying? Lawmakers weigh big revamp of tax break
2010-12-31
Info/Broken? - Schiff: Home prices still too high, would have to decline another 20% just to get back to the historical trend line, likely to overshoot
Discuss - Schiff: Home prices still too high, would have to decline another 20% just to get back to the historical trend line, likely to overshoot
Schiff: Home prices still too high, would have to decline another 20% just to get back to the historical trend line, likely to overshoot
2010-12-30
Info/Broken? - In a time of shrinking wallets, dreams shrinking too
Discuss - In a time of shrinking wallets, dreams shrinking too
In a time of shrinking wallets, dreams shrinking too
2010-12-30
Info/Broken? - Home-loan modifications decline
Discuss - Home-loan modifications decline
Home-loan modifications decline
2010-12-29
Info/Broken? - Mass. home foreclosures fall in November
Discuss - Mass. home foreclosures fall in November
Mass. home foreclosures fall in November
2010-12-28
Info/Broken? - Boston home prices resumed nominal decline in October, 1st month after credit
Discuss - Boston home prices resumed nominal decline in October, 1st month after credit
Boston home prices resumed nominal decline in October, 1st month after credit
2010-12-28
Info/Broken? - Opinion: Mass. zoning keeps doors closed to newcomers
Discuss - Opinion: Mass. zoning keeps doors closed to newcomers
Opinion: Mass. zoning keeps doors closed to newcomers
2010-12-27
Info/Broken? - Experts: Foreclosure Crisis Far From Over In The Bay State
Discuss - Experts: Foreclosure Crisis Far From Over In The Bay State
Experts: Foreclosure Crisis Far From Over In The Bay State
2010-12-24
Info/Broken? - Boston Bubble Wrap: Nov 2010
Discuss - Boston Bubble Wrap: Nov 2010
Boston Bubble Wrap: Nov 2010
2010-12-24
Info/Broken? - Top execs take on Bay State "brain drain"
Discuss - Top execs take on Bay State "brain drain"
Top execs take on Bay State "brain drain"
2010-12-23
Info/Broken? - Hub is third best business city, survey says
Discuss - Hub is third best business city, survey says
Hub is third best business city, survey says
2010-12-22
Info/Broken? - MA SFH Nov 2010 vs. Nov 2009 - MAR: sales down 31.5%, nominal median up 5.2%; Warren Group: sales down 30%, nominal median up 7.3%
Discuss - MA SFH Nov 2010 vs. Nov 2009 - MAR: sales down 31.5%, nominal median up 5.2%; Warren Group: sales down 30%, nominal median up 7.3%
MA SFH Nov 2010 vs. Nov 2009 - MAR: sales down 31.5%, nominal median up 5.2%; Warren Group: sales down 30%, nominal median up 7.3%
2010-12-21
Info/Broken? - Census count confirms Mass. to lose House seat
Discuss - Census count confirms Mass. to lose House seat
Census count confirms Mass. to lose House seat
2010-12-21
Info/Broken? - Mass. "hoping for miracle" - Expected to lose congressional seat
Discuss - Mass. "hoping for miracle" - Expected to lose congressional seat
Mass. "hoping for miracle" - Expected to lose congressional seat
2010-12-21
Info/Broken? - Boston lawyer charged with mortgage fraud
Discuss - Boston lawyer charged with mortgage fraud
Boston lawyer charged with mortgage fraud
2010-12-20
Info/Broken? - Wary lenders denying short sales - Citing price concerns, many opt to foreclose
Discuss - Wary lenders denying short sales - Citing price concerns, many opt to foreclose
Wary lenders denying short sales - Citing price concerns, many opt to foreclose
2010-12-20
Info/Broken? - Homestead law revision clarifies protections for Mass. home owners
Discuss - Homestead law revision clarifies protections for Mass. home owners
Homestead law revision clarifies protections for Mass. home owners
2010-12-17
Info/Broken? - MA REALTOR(R) sentiment down 51.91% YOY in November
Discuss - MA REALTOR(R) sentiment down 51.91% YOY in November
MA REALTOR(R) sentiment down 51.91% YOY in November
2010-12-17
Info/Broken? - Jobless rate in state rises slightly
Discuss - Jobless rate in state rises slightly
Jobless rate in state rises slightly
2010-12-16
Info/Broken? - Firm may skirt millions in property fees - Attorney general, others probe system created by lenders
Discuss - Firm may skirt millions in property fees - Attorney general, others probe system created by lenders
Firm may skirt millions in property fees - Attorney general, others probe system created by lenders
2010-12-16
Info/Broken? - Number of homes taken back by lenders tumbles
Discuss - Number of homes taken back by lenders tumbles
Number of homes taken back by lenders tumbles
2010-12-15
Info/Broken? - The Next Housing Bubble - Is This the Perfect Storm?  Massachusetts considered particularly problematic.
Discuss - The Next Housing Bubble - Is This the Perfect Storm?  Massachusetts considered particularly problematic.
The Next Housing Bubble - Is This the Perfect Storm? Massachusetts considered particularly problematic.
2010-12-14
Info/Broken? - MLSPIN: MA SFH sales fall 32% YOY in November, nominal median up 5.3%
Discuss - MLSPIN: MA SFH sales fall 32% YOY in November, nominal median up 5.3%
MLSPIN: MA SFH sales fall 32% YOY in November, nominal median up 5.3%
2010-12-13
Info/Broken? - Sales of homes in toney towns up, but prices keep plunging
Discuss - Sales of homes in toney towns up, but prices keep plunging
Sales of homes in toney towns up, but prices keep plunging
2010-12-10
Info/Broken? - Zillow: Hub home values up by $11B
Discuss - Zillow: Hub home values up by $11B
Zillow: Hub home values up by $11B
2010-12-09
Info/Broken? - US home values tumble $1.7 trillion in 2010 despite tax credit gimmick
Discuss - US home values tumble $1.7 trillion in 2010 despite tax credit gimmick
US home values tumble $1.7 trillion in 2010 despite tax credit gimmick
2010-12-09
Info/Broken? - Boston Foreclosure Fighters: Banks Are 'Deceptive In Hosts of Ways'
Discuss - Boston Foreclosure Fighters: Banks Are 'Deceptive In Hosts of Ways'
Boston Foreclosure Fighters: Banks Are 'Deceptive In Hosts of Ways'
2010-12-09
Info/Broken? - Massachusetts among 10 worst states for retirement
Discuss - Massachusetts among 10 worst states for retirement
Massachusetts among 10 worst states for retirement
2010-12-08
Info/Broken? - MA Nov pending home sales unchanged from 2009
Discuss - MA Nov pending home sales unchanged from 2009
MA Nov pending home sales unchanged from 2009
2010-12-07
Info/Broken? - Rentals soar as more people steer clear of homeownership
Discuss - Rentals soar as more people steer clear of homeownership
Rentals soar as more people steer clear of homeownership
2010-12-06
Info/Broken? - Bill Galvin to propose court OK for foreclosures
Discuss - Bill Galvin to propose court OK for foreclosures
Bill Galvin to propose court OK for foreclosures
2010-12-06
Info/Broken? - 3 reasons why the mortgage tax break isn't a break
Discuss - 3 reasons why the mortgage tax break isn't a break
3 reasons why the mortgage tax break isn't a break
2010-12-06
Info/Broken? - Construction Jobs Down In Mass.
Discuss - Construction Jobs Down In Mass.
Construction Jobs Down In Mass.
2010-12-03
Info/Broken? - S&P/Case-Shiller Boston Snapshot: Nov 30, 2010
Discuss - S&P/Case-Shiller Boston Snapshot: Nov 30, 2010
S&P/Case-Shiller Boston Snapshot: Nov 30, 2010
2010-12-03
Info/Broken? - Middlesex North Registry of Deeds, Nov 2010 vs Nov 2009: Deeds down 15%, foreclosure deeds down 50%
Discuss - Middlesex North Registry of Deeds, Nov 2010 vs Nov 2009: Deeds down 15%, foreclosure deeds down 50%
Middlesex North Registry of Deeds, Nov 2010 vs Nov 2009: Deeds down 15%, foreclosure deeds down 50%
2010-12-02
Info/Broken? - Loss of equity since expiration of tax credit already exceeds value of credit (US)
Discuss - Loss of equity since expiration of tax credit already exceeds value of credit (US)
Loss of equity since expiration of tax credit already exceeds value of credit (US)
2010-12-02
Info/Broken? - Massachusetts on the mend - Study 'upbeat'on economy, but cites real estate as weak link
Discuss - Massachusetts on the mend - Study 'upbeat'on economy, but cites real estate as weak link
Massachusetts on the mend - Study 'upbeat'on economy, but cites real estate as weak link
2010-12-02
Info/Broken? - 7 Towns Where Land is Free
Discuss - 7 Towns Where Land is Free
7 Towns Where Land is Free
2010-12-01
Info/Broken? - Boston Bubble Wrap: October 2010
Discuss - Boston Bubble Wrap: October 2010
Boston Bubble Wrap: October 2010
2010-12-01
Info/Broken? - State braces for end to federal unemployment benefits
Discuss - State braces for end to federal unemployment benefits
State braces for end to federal unemployment benefits
2010-12-01
Info/Broken? - State Street to cut 400 Mass. jobs
Discuss - State Street to cut 400 Mass. jobs
State Street to cut 400 Mass. jobs
2010-12-01
Info/Broken? - NIMBYs ruin national economy, Newton provides example
Discuss - NIMBYs ruin national economy, Newton provides example
NIMBYs ruin national economy, Newton provides example

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