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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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2011-01-31
Info/Broken? - U.S. growing, Massachusetts slowing
Discuss - U.S. growing, Massachusetts slowing
U.S. growing, Massachusetts slowing
2011-01-28
Info/Broken? - Boston Bubble Wrap, Dec 2010: Declines return; lowest real median since 1999 estimate
Discuss - Boston Bubble Wrap, Dec 2010: Declines return; lowest real median since 1999 estimate
Boston Bubble Wrap, Dec 2010: Declines return; lowest real median since 1999 estimate
2011-01-28
Info/Broken? - Essex County Jan 6 inventory: foreclosures for sale 5.98%, shadow ratio 4.26%
Discuss - Essex County Jan 6 inventory: foreclosures for sale 5.98%, shadow ratio 4.26%
Essex County Jan 6 inventory: foreclosures for sale 5.98%, shadow ratio 4.26%
2011-01-28
Info/Broken? - Number of people filing for bankruptcy jumps in state
Discuss - Number of people filing for bankruptcy jumps in state
Number of people filing for bankruptcy jumps in state
2011-01-28
Info/Broken? - Mass. lawyer pleads guilty in condo fraud
Discuss - Mass. lawyer pleads guilty in condo fraud
Mass. lawyer pleads guilty in condo fraud
2011-01-27
Info/Broken? - Patrick plan will cut spending by $570M
Discuss - Patrick plan will cut spending by $570M
Patrick plan will cut spending by $570M
2011-01-26
Info/Broken? - Globe: Mass. housing market held steady for 2010
Discuss - Globe: Mass. housing market held steady for 2010
Globe: Mass. housing market held steady for 2010
2011-01-25
Info/Broken? - S&P/Case-Shiller Boston down 0.8% YOY (nominal) in November
Discuss - S&P/Case-Shiller Boston down 0.8% YOY (nominal) in November
S&P/Case-Shiller Boston down 0.8% YOY (nominal) in November
2011-01-25
Info/Broken? - Declines resume in MA SFH nominal median - MAR: prices down 6.2% YOY
Discuss - Declines resume in MA SFH nominal median - MAR: prices down 6.2% YOY
Declines resume in MA SFH nominal median - MAR: prices down 6.2% YOY
2011-01-24
Info/Broken? - Let home buyer beware
Discuss - Let home buyer beware
Let home buyer beware
2011-01-21
Info/Broken? - Suffolk County Jan 6 inventory: foreclosures for sale 5.46%, shadow ratio 7.14%
Discuss - Suffolk County Jan 6 inventory: foreclosures for sale 5.46%, shadow ratio 7.14%
Suffolk County Jan 6 inventory: foreclosures for sale 5.46%, shadow ratio 7.14%
2011-01-21
Info/Broken? - Where Massachusetts foreclosures rose, fell most in 2010
Discuss - Where Massachusetts foreclosures rose, fell most in 2010
Where Massachusetts foreclosures rose, fell most in 2010
2011-01-20
Info/Broken? - S&P: Boston's shadow inventory at 62 months
Discuss - S&P: Boston's shadow inventory at 62 months
S&P: Boston's shadow inventory at 62 months
2011-01-19
Info/Broken? - MA foreclosures drop 44% YOY in Dec, but problems could still loom
Discuss - MA foreclosures drop 44% YOY in Dec, but problems could still loom
MA foreclosures drop 44% YOY in Dec, but problems could still loom
2011-01-19
Info/Broken? - MA foreclosures spiked 32% in 2010, despite grinding halt at end of year
Discuss - MA foreclosures spiked 32% in 2010, despite grinding halt at end of year
MA foreclosures spiked 32% in 2010, despite grinding halt at end of year
2011-01-18
Info/Broken? - State bills target rules on foreclosure
Discuss - State bills target rules on foreclosure
State bills target rules on foreclosure
2011-01-17
Info/Broken? - MAR Realtor sentiment down 43% YOY in December
Discuss - MAR Realtor sentiment down 43% YOY in December
MAR Realtor sentiment down 43% YOY in December
2011-01-14
Info/Broken? - Middlesex County Jan 6 inventory: foreclosures 4.63%, shadow ratio 5.50%
Discuss - Middlesex County Jan 6 inventory: foreclosures 4.63%, shadow ratio 5.50%
Middlesex County Jan 6 inventory: foreclosures 4.63%, shadow ratio 5.50%
2011-01-14
Info/Broken? - A new act in foreclosure circus
Discuss - A new act in foreclosure circus
A new act in foreclosure circus
2011-01-13
Info/Broken? - Boston Fed: outlook for 2011 moderately positive; residential real estate gloomy
Discuss - Boston Fed: outlook for 2011 moderately positive; residential real estate gloomy
Boston Fed: outlook for 2011 moderately positive; residential real estate gloomy
2011-01-13
Info/Broken? - A rental revival
Discuss - A rental revival
A rental revival
2011-01-13
Info/Broken? - Developer sued over failed condo deal - Natick woman alleges discrimination
Discuss - Developer sued over failed condo deal - Natick woman alleges discrimination
Developer sued over failed condo deal - Natick woman alleges discrimination
2011-01-12
Info/Broken? - Plant will shut after $58m in state aid - Evergreen Solar to cut 800 jobs
Discuss - Plant will shut after $58m in state aid - Evergreen Solar to cut 800 jobs
Plant will shut after $58m in state aid - Evergreen Solar to cut 800 jobs
2011-01-12
Info/Broken? - Thoughts on Ibanez from Middlesex North Registry of Deeds
Discuss - Thoughts on Ibanez from Middlesex North Registry of Deeds
Thoughts on Ibanez from Middlesex North Registry of Deeds
2011-01-11
Info/Broken? - Housing reports a mixed bag for Boston, state
Discuss - Housing reports a mixed bag for Boston, state
Housing reports a mixed bag for Boston, state
2011-01-11
Info/Broken? - Galvin wants foreclosure tribunal - Seeks to ease uncertainty following SJC ruling on mortgage ownership
Discuss - Galvin wants foreclosure tribunal - Seeks to ease uncertainty following SJC ruling on mortgage ownership
Galvin wants foreclosure tribunal - Seeks to ease uncertainty following SJC ruling on mortgage ownership
2011-01-11
Info/Broken? - Small towns besieged by foreclosures - Job losses, slow economy plague many outside cities
Discuss - Small towns besieged by foreclosures - Job losses, slow economy plague many outside cities
Small towns besieged by foreclosures - Job losses, slow economy plague many outside cities
2011-01-10
Info/Broken? - Could Mass. Court Ruling Prolong Housing Slump?
Discuss - Could Mass. Court Ruling Prolong Housing Slump?
Could Mass. Court Ruling Prolong Housing Slump?
2011-01-07
Info/Broken? - Middlesex North Registry of Deeds: Dec 2010 recording statistics
Discuss - Middlesex North Registry of Deeds: Dec 2010 recording statistics
Middlesex North Registry of Deeds: Dec 2010 recording statistics
2011-01-06
Info/Broken? - Massachusetts Foreclosure Case Reveals Bad Practices Behind the Mortgage Scene
Discuss - Massachusetts Foreclosure Case Reveals Bad Practices Behind the Mortgage Scene
Massachusetts Foreclosure Case Reveals Bad Practices Behind the Mortgage Scene
2011-01-05
Info/Broken? - Beantown Bust: Boston Home Sales and Prices November 2010
Discuss - Beantown Bust: Boston Home Sales and Prices November 2010
Beantown Bust: Boston Home Sales and Prices November 2010
2011-01-05
Info/Broken? - Middlesex North Registry of Deeds: 2010 Recording Statistics
Discuss - Middlesex North Registry of Deeds: 2010 Recording Statistics
Middlesex North Registry of Deeds: 2010 Recording Statistics
2011-01-05
Info/Broken? - "Lots of optimism" in state's housing market
Discuss - "Lots of optimism" in state's housing market
"Lots of optimism" in state's housing market
2011-01-04
Info/Broken? - MA SFH under agreement in Dec up 5.3% YOY, all of 2010 down 2.5% from 2009
Discuss - MA SFH under agreement in Dec up 5.3% YOY, all of 2010 down 2.5% from 2009
MA SFH under agreement in Dec up 5.3% YOY, all of 2010 down 2.5% from 2009
2011-01-04
Info/Broken? - Calculated Risk's predictions for housing prices in 2011
Discuss - Calculated Risk's predictions for housing prices in 2011
Calculated Risk's predictions for housing prices in 2011
2011-01-03
Info/Broken? - Citing Mass. income drop, gov cuts lawmaker pay
Discuss - Citing Mass. income drop, gov cuts lawmaker pay
Citing Mass. income drop, gov cuts lawmaker pay
2011-01-03
Info/Broken? - Boston hit hardest by Mass. construction declines
Discuss - Boston hit hardest by Mass. construction declines
Boston hit hardest by Mass. construction declines
2011-01-03
Info/Broken? - Middlesex North Registry of Deeds on 2010: Deeds down 3%, foreclosures up 40%
Discuss - Middlesex North Registry of Deeds on 2010: Deeds down 3%, foreclosures up 40%
Middlesex North Registry of Deeds on 2010: Deeds down 3%, foreclosures up 40%

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