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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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2011-06-30
Info/Broken? - Mass. foreclosures fell again in May
Discuss - Mass. foreclosures fell again in May
Mass. foreclosures fell again in May
2011-06-30
Info/Broken? - State will miss budget deadline, leaders say
Discuss - State will miss budget deadline, leaders say
State will miss budget deadline, leaders say
2011-06-30
Info/Broken? - Quincy real estate company fined for discriminating against families with young children
Discuss - Quincy real estate company fined for discriminating against families with young children
Quincy real estate company fined for discriminating against families with young children
2011-06-29
Info/Broken? - Under-45 population on the decline in Mass.
Discuss - Under-45 population on the decline in Mass.
Under-45 population on the decline in Mass.
2011-06-29
Info/Broken? - Redfin cuts home buyer's refund to 33% in Boston
Discuss - Redfin cuts home buyer's refund to 33% in Boston
Redfin cuts home buyer's refund to 33% in Boston
2011-06-28
Info/Broken? - Mortgage delinquencies slip in Greater Boston
Discuss - Mortgage delinquencies slip in Greater Boston
Mortgage delinquencies slip in Greater Boston
2011-06-28
Info/Broken? - MA SFH May 2011 vs. May 2010 - MAR: sales down 17%, nominal median up 0.5%; Warren Group: sales down 25%, nominal median up 3.4%
Discuss - MA SFH May 2011 vs. May 2010 - MAR: sales down 17%, nominal median up 0.5%; Warren Group: sales down 25%, nominal median up 3.4%
MA SFH May 2011 vs. May 2010 - MAR: sales down 17%, nominal median up 0.5%; Warren Group: sales down 25%, nominal median up 3.4%
2011-06-27
Info/Broken? - MLSPIN: MA SFH sales tumble 19% YOY in May, nominal median up 0.67%
Discuss - MLSPIN: MA SFH sales tumble 19% YOY in May, nominal median up 0.67%
MLSPIN: MA SFH sales tumble 19% YOY in May, nominal median up 0.67%
2011-06-27
Info/Broken? - REALTORS(R) Visit Beacon Hill To Push for Increased Licensing Requirements, etc.
Discuss - REALTORS(R) Visit Beacon Hill To Push for Increased Licensing Requirements, etc.
REALTORS(R) Visit Beacon Hill To Push for Increased Licensing Requirements, etc.
2011-06-27
Info/Broken? - MetLife pushes reverse mortgages
Discuss - MetLife pushes reverse mortgages
MetLife pushes reverse mortgages
2011-06-24
Info/Broken? - Jobs, housing dim economic picture
Discuss - Jobs, housing dim economic picture
Jobs, housing dim economic picture
2011-06-24
Info/Broken? - MBTA bailout looms as debt mounts
Discuss - MBTA bailout looms as debt mounts
MBTA bailout looms as debt mounts
2011-06-23
Info/Broken? - Robo-Signing and the Salem Registry of Deeds
Discuss - Robo-Signing and the Salem Registry of Deeds
Robo-Signing and the Salem Registry of Deeds
2011-06-23
Info/Broken? - Slow growth stumps Ben Bernanke
Discuss - Slow growth stumps Ben Bernanke
Slow growth stumps Ben Bernanke
2011-06-22
Info/Broken? - State unemployment rate drops to 7.6% but with 4,000 fewer jobs
Discuss - State unemployment rate drops to 7.6% but with 4,000 fewer jobs
State unemployment rate drops to 7.6% but with 4,000 fewer jobs
2011-06-22
Info/Broken? - Agency overseeing Fannie & Freddie left possible fraud unchecked
Discuss - Agency overseeing Fannie & Freddie left possible fraud unchecked
Agency overseeing Fannie & Freddie left possible fraud unchecked
2011-06-21
Info/Broken? - US home sales fall to 2011 low; few 1st-time buyers
Discuss - US home sales fall to 2011 low; few 1st-time buyers
US home sales fall to 2011 low; few 1st-time buyers
2011-06-21
Info/Broken? - Long-promised loan aid for jobless is launched; $61M earmarked for Mass.
Discuss - Long-promised loan aid for jobless is launched; $61M earmarked for Mass.
Long-promised loan aid for jobless is launched; $61M earmarked for Mass.
2011-06-20
Info/Broken? - Mass. foreclosure backlog would take decade to clear at current pace
Discuss - Mass. foreclosure backlog would take decade to clear at current pace
Mass. foreclosure backlog would take decade to clear at current pace
2011-06-17
Info/Broken? - Mass. economic recovery shows weakness in May
Discuss - Mass. economic recovery shows weakness in May
Mass. economic recovery shows weakness in May
2011-06-17
Info/Broken? - U.S. financial reform law sets aside $61M for Mass. unemployed
Discuss - U.S. financial reform law sets aside $61M for Mass. unemployed
U.S. financial reform law sets aside $61M for Mass. unemployed
2011-06-17
Info/Broken? - Allston skeptical of Harvard's new vision
Discuss - Allston skeptical of Harvard's new vision
Allston skeptical of Harvard's new vision
2011-06-17
Info/Broken? - Many who pledged to fix debt have bills of their own
Discuss - Many who pledged to fix debt have bills of their own
Many who pledged to fix debt have bills of their own
2011-06-16
Info/Broken? - MAR REALTOR(R) sentiment index down 29.10% YOY in May
Discuss - MAR REALTOR(R) sentiment index down 29.10% YOY in May
MAR REALTOR(R) sentiment index down 29.10% YOY in May
2011-06-15
Info/Broken? - The Secret To Texas' Success (contrasted with Boston): They Build Houses There
Discuss - The Secret To Texas' Success (contrasted with Boston): They Build Houses There
The Secret To Texas' Success (contrasted with Boston): They Build Houses There
2011-06-15
Info/Broken? - Weston #7 in Coldwell Banker's 10 most expensive cities
Discuss - Weston #7 in Coldwell Banker's 10 most expensive cities
Weston #7 in Coldwell Banker's 10 most expensive cities
2011-06-14
Info/Broken? - Economists warn against Fed action
Discuss - Economists warn against Fed action
Economists warn against Fed action
2011-06-14
Info/Broken? - Boston total taxable property continue to slide
Discuss - Boston total taxable property continue to slide
Boston total taxable property continue to slide
2011-06-13
Info/Broken? - Home Affordability Ratios by State (+DC): MA is 4th worst
Discuss - Home Affordability Ratios by State (+DC): MA is 4th worst
Home Affordability Ratios by State (+DC): MA is 4th worst
2011-06-13
Info/Broken? - Beantown Bust: Boston Home Sales and Prices April 2011
Discuss - Beantown Bust: Boston Home Sales and Prices April 2011
Beantown Bust: Boston Home Sales and Prices April 2011
2011-06-13
Info/Broken? - Mass. housing recovery years off; Many still face foreclosure risk
Discuss - Mass. housing recovery years off; Many still face foreclosure risk
Mass. housing recovery years off; Many still face foreclosure risk
2011-06-10
Info/Broken? - U.S. targets poor-performing mortgage servicers
Discuss - U.S. targets poor-performing mortgage servicers
U.S. targets poor-performing mortgage servicers
2011-06-09
Info/Broken? - Greater Boston lands on list of "lowest performing major markets"
Discuss - Greater Boston lands on list of "lowest performing major markets"
Greater Boston lands on list of "lowest performing major markets"
2011-06-09
Info/Broken? - U.S. economic recovery falters, but Bay State sees growth
Discuss - U.S. economic recovery falters, but Bay State sees growth
U.S. economic recovery falters, but Bay State sees growth
2011-06-08
Info/Broken? - Survey: Confidence among Mass. employers lagging
Discuss - Survey: Confidence among Mass. employers lagging
Survey: Confidence among Mass. employers lagging
2011-06-08
Info/Broken? - Mass. economy's growth fourth in the nation
Discuss - Mass. economy's growth fourth in the nation
Mass. economy's growth fourth in the nation
2011-06-07
Info/Broken? - Negative equity borrowers in MA average $120K underwater
Discuss - Negative equity borrowers in MA average $120K underwater
Negative equity borrowers in MA average $120K underwater
2011-06-07
Info/Broken? - Harvard study: Housing market "terrible," but rentals look up
Discuss - Harvard study: Housing market "terrible," but rentals look up
Harvard study: Housing market "terrible," but rentals look up
2011-06-06
Info/Broken? - Thoughts from the CEO of Redfin
Discuss - Thoughts from the CEO of Redfin
Thoughts from the CEO of Redfin
2011-06-06
Info/Broken? - Rising cost of rent raises fears concerning inflation
Discuss - Rising cost of rent raises fears concerning inflation
Rising cost of rent raises fears concerning inflation
2011-06-03
Info/Broken? - S&P/Case-Shiller Boston snapshot with futures: May 31, 2011
Discuss - S&P/Case-Shiller Boston snapshot with futures: May 31, 2011
S&P/Case-Shiller Boston snapshot with futures: May 31, 2011
2011-06-03
Info/Broken? - US job growth could be slowing
Discuss - US job growth could be slowing
US job growth could be slowing
2011-06-02
Info/Broken? - Robert Shiller Interview on U.S. Housing Market
Discuss - Robert Shiller Interview on U.S. Housing Market
Robert Shiller Interview on U.S. Housing Market
2011-06-02
Info/Broken? - 20% down prices out buyers, Kerry says
Discuss - 20% down prices out buyers, Kerry says
20% down prices out buyers, Kerry says
2011-06-01
Info/Broken? - Middlesex deeds and mortgages down substantially in May
Discuss - Middlesex deeds and mortgages down substantially in May
Middlesex deeds and mortgages down substantially in May

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