bostonbubble.com

[Guest]

I'm guessing that those of us (including me) who thought Boston real estate was a bubble is looking more and more wrong.

[admin]

Just to clarify whatever the site name might imply, it was named under the premise that there was a real estate bubble when the site was created, in 2005. I actually did call a bottom in July 2012, conditional upon mortgage rates staying ultra low, the economy not worsening, and government welfare continuing to flow to the FIRE industries. That is, I thought that the prices then were sustainable under those conditions, though the conditions themselves are risky to rely on. That said, while I wouldn't have used the term bubble then, I don't think that a year of price surges and two years of tight inventory could disprove the existence of a bubble. That's what people said back in 2005, and they were dead wrong. And again, I'm not saying there is a bubble now, just that you can't disprove it over such a short time frame.

- admin

[balor123]

I'd agree that prices by 2012 had moderated to sustainable levels but at this point I'll come out and say the market looks pretty frothy to me. I think if there aren't any big rattles to the economy we'll quietly settle down in the next 2-3 years as interest rates rise. MA still has demographic problems we disucssed several years ago, such that starting in about 5 years even as the rest of the country heats up it will feel relative downwards pressure. Hard to know if college students will fill the void, as they've been there before but it hasn't always been the case.

[Dismayed]

The downstairs unit (1,150 SQF) of a 2 family condo recently sold for $440,000. People borrow as much as the banks will lend, even though real interest rates are no that low and future wage growth will be weak.

[question]

I am wondering how the home flipping/real estate developers impact the market (Cambridge, Somerville, etc) for us who are traditional buyers. Does it drive prices up in general? Are the flippers out there now making big $$$ right now? Just curious if anyone has any knowledge on this topic.

[thasac]