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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
2011-07-29
Info/Broken? - Boston Bubble Wrap: The Real Story for MA - Jun 2011
Discuss - Boston Bubble Wrap: The Real Story for MA - Jun 2011
Boston Bubble Wrap: The Real Story for MA - Jun 2011
2011-07-29
Info/Broken? - MERS Orders Foreclosure Halt
Discuss - MERS Orders Foreclosure Halt
MERS Orders Foreclosure Halt
2011-07-29
Info/Broken? - China's 5 year plan to refocus investment internally may greatly reduce demand for Treasuries, increase US mortgage rates
Discuss - China's 5 year plan to refocus investment internally may greatly reduce demand for Treasuries, increase US mortgage rates
China's 5 year plan to refocus investment internally may greatly reduce demand for Treasuries, increase US mortgage rates
2011-07-28
Info/Broken? - Boston Fed's economic outlook becomes more cautious
Discuss - Boston Fed's economic outlook becomes more cautious
Boston Fed's economic outlook becomes more cautious
2011-07-28
Info/Broken? - Hit with foreclosures, Bank of America donating, demolishing homes
Discuss - Hit with foreclosures, Bank of America donating, demolishing homes
Hit with foreclosures, Bank of America donating, demolishing homes
2011-07-27
Info/Broken? - Federal funds crucial to state's economy
Discuss - Federal funds crucial to state's economy
Federal funds crucial to state's economy
2011-07-26
Info/Broken? - MA SFH Jun 2011 vs. Jun 2010 - MAR: sales down 18%, nominal median down 1.60%; Warren Group: sales down 23.5%, nominal median up 0.26%
Discuss - MA SFH Jun 2011 vs. Jun 2010 - MAR: sales down 18%, nominal median down 1.60%; Warren Group: sales down 23.5%, nominal median up 0.26%
MA SFH Jun 2011 vs. Jun 2010 - MAR: sales down 18%, nominal median down 1.60%; Warren Group: sales down 23.5%, nominal median up 0.26%
2011-07-26
Info/Broken? - Coakley steps up probe into foreclosure fraud - Virginia-based firm is focus of new action
Discuss - Coakley steps up probe into foreclosure fraud - Virginia-based firm is focus of new action
Coakley steps up probe into foreclosure fraud - Virginia-based firm is focus of new action
2011-07-25
Info/Broken? - Justice Foreclosed
Discuss - Justice Foreclosed
Justice Foreclosed
2011-07-25
Info/Broken? - Rents higher, apartments scarcer in Boston-area
Discuss - Rents higher, apartments scarcer in Boston-area
Rents higher, apartments scarcer in Boston-area
2011-07-25
Info/Broken? - Rep. Frank hopes government will continue to make housing prices unaffordable in most expensive areas
Discuss - Rep. Frank hopes government will continue to make housing prices unaffordable in most expensive areas
Rep. Frank hopes government will continue to make housing prices unaffordable in most expensive areas
2011-07-22
Info/Broken? - Why America's Young And Restless Will Abandon Cities For Suburbs - Joel Kotkin
Discuss - Why America's Young And Restless Will Abandon Cities For Suburbs - Joel Kotkin
Why America's Young And Restless Will Abandon Cities For Suburbs - Joel Kotkin
2011-07-22
Info/Broken? - For now, state's job picture still brighter than nation's
Discuss - For now, state's job picture still brighter than nation's
For now, state's job picture still brighter than nation's
2011-07-21
Info/Broken? - Fidelity moving jobs out of base in Boston
Discuss - Fidelity moving jobs out of base in Boston
Fidelity moving jobs out of base in Boston
2011-07-21
Info/Broken? - Debt Drama Could Be Another Blow To Housing
Discuss - Debt Drama Could Be Another Blow To Housing
Debt Drama Could Be Another Blow To Housing
2011-07-21
Info/Broken? - Mass. Senate to debate "supportive housing" bill
Discuss - Mass. Senate to debate "supportive housing" bill
Mass. Senate to debate "supportive housing" bill
2011-07-20
Info/Broken? - MLSPIN: MA SFH sales drop 18% YOY in June, nominal median down 0.83%
Discuss - MLSPIN: MA SFH sales drop 18% YOY in June, nominal median down 0.83%
MLSPIN: MA SFH sales drop 18% YOY in June, nominal median down 0.83%
2011-07-19
Info/Broken? - Forbes: Mortgage 'robo-signing' goes on
Discuss - Forbes: Mortgage 'robo-signing' goes on
Forbes: Mortgage 'robo-signing' goes on
2011-07-18
Info/Broken? - More on robo-signers
Discuss - More on robo-signers
More on robo-signers
2011-07-18
Info/Broken? - RentJuice Rent Index Launched in Boston
Discuss - RentJuice Rent Index Launched in Boston
RentJuice Rent Index Launched in Boston
2011-07-15
Info/Broken? - Richard P. Howe Jr. on MERS
Discuss - Richard P. Howe Jr. on MERS
Richard P. Howe Jr. on MERS
2011-07-15
Info/Broken? - Rulings keep homeowners' lawsuits on track
Discuss - Rulings keep homeowners' lawsuits on track
Rulings keep homeowners' lawsuits on track
2011-07-14
Info/Broken? - Registrar vs. robosigners
Discuss - Registrar vs. robosigners
Registrar vs. robosigners
2011-07-13
Info/Broken? - The Federal Debt Limit and the housing market
Discuss - The Federal Debt Limit and the housing market
The Federal Debt Limit and the housing market
2011-07-13
Info/Broken? - Mass. justices: Budget woes could close courts
Discuss - Mass. justices: Budget woes could close courts
Mass. justices: Budget woes could close courts
2011-07-13
Info/Broken? - Realty trade group overreported Chicago home prices
Discuss - Realty trade group overreported Chicago home prices
Realty trade group overreported Chicago home prices
2011-07-12
Info/Broken? - Many may lose homes in Bank of America deal
Discuss - Many may lose homes in Bank of America deal
Many may lose homes in Bank of America deal
2011-07-11
Info/Broken? - Somerville condo sales slide, home sales flat
Discuss - Somerville condo sales slide, home sales flat
Somerville condo sales slide, home sales flat
2011-07-10
Info/Broken? - Real Estate Sales, Prices Down in Arlington
Discuss - Real Estate Sales, Prices Down in Arlington
Real Estate Sales, Prices Down in Arlington
2011-07-09
Info/Broken? - Gary Shilling: Housing prices will fall another 20%
Discuss - Gary Shilling: Housing prices will fall another 20%
Gary Shilling: Housing prices will fall another 20%
2011-07-08
Info/Broken? - Middlesex North Registry of Deeds July & Mid-Year Statistics
Discuss - Middlesex North Registry of Deeds July & Mid-Year Statistics
Middlesex North Registry of Deeds July & Mid-Year Statistics
2011-07-08
Info/Broken? - New Hampshire's secret salesman luring Bay State firms across the line
Discuss - New Hampshire's secret salesman luring Bay State firms across the line
New Hampshire's secret salesman luring Bay State firms across the line
2011-07-08
Info/Broken? - Bankers back mortgage relief plan - Obama's plan gives unemployed 12 months at lower rates
Discuss - Bankers back mortgage relief plan - Obama's plan gives unemployed 12 months at lower rates
Bankers back mortgage relief plan - Obama's plan gives unemployed 12 months at lower rates
2011-07-08
Info/Broken? - US unemployment rose to 9.2% as hiring stalls
Discuss - US unemployment rose to 9.2% as hiring stalls
US unemployment rose to 9.2% as hiring stalls
2011-07-07
Info/Broken? - MAR: MA SFH pending home sales up 9.28% YOY in June
Discuss - MAR: MA SFH pending home sales up 9.28% YOY in June
MAR: MA SFH pending home sales up 9.28% YOY in June
2011-07-05
Info/Broken? - 5 out of 6 North Shore mortgages show evidence of "robo-signing" or other flaws
Discuss - 5 out of 6 North Shore mortgages show evidence of "robo-signing" or other flaws
5 out of 6 North Shore mortgages show evidence of "robo-signing" or other flaws
2011-07-05
Info/Broken? - Business reviving for local builders - Construction jobs may increase by 4,000
Discuss - Business reviving for local builders - Construction jobs may increase by 4,000
Business reviving for local builders - Construction jobs may increase by 4,000
2011-07-01
Info/Broken? - Boston Bubble Wrap: The Real Story for MA - May 2011
Discuss - Boston Bubble Wrap: The Real Story for MA - May 2011
Boston Bubble Wrap: The Real Story for MA - May 2011
2011-07-01
Info/Broken? - Experts warning housing market is still fragile
Discuss - Experts warning housing market is still fragile
Experts warning housing market is still fragile
2011-07-01
Info/Broken? - Mass. foreclosures fall 65% in May
Discuss - Mass. foreclosures fall 65% in May
Mass. foreclosures fall 65% in May
2011-07-01
Info/Broken? - Budget deal with more cuts on table
Discuss - Budget deal with more cuts on table
Budget deal with more cuts on table

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