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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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Legend: Info/Broken? Info/Broken? Discuss Discuss
2014-12-18
Info/Broken? - $84,500 salary needed to leverage into Boston area housing
Discuss - $84,500 salary needed to leverage into Boston area housing
$84,500 salary needed to leverage into Boston area housing
2014-12-04
Info/Broken? - Bay State Foreclosure Activity Posts Gains In October - 91.5% YOY Increase
Discuss - Bay State Foreclosure Activity Posts Gains In October - 91.5% YOY Increase
Bay State Foreclosure Activity Posts Gains In October - 91.5% YOY Increase
2014-11-27
Info/Broken? - MA SFH Oct 2014 vs Oct 2013 - MAR: nominal median up 1.6%, volume up 0.4%
Discuss - MA SFH Oct 2014 vs Oct 2013 - MAR: nominal median up 1.6%, volume up 0.4%
MA SFH Oct 2014 vs Oct 2013 - MAR: nominal median up 1.6%, volume up 0.4%
2014-11-27
Info/Broken? - MA SFH Oct 2014 vs Oct 2013 - Warren Group: nominal median up 2.1%, volume up 1.4%
Discuss - MA SFH Oct 2014 vs Oct 2013 - Warren Group: nominal median up 2.1%, volume up 1.4%
MA SFH Oct 2014 vs Oct 2013 - Warren Group: nominal median up 2.1%, volume up 1.4%
2014-11-16
Info/Broken? - A very strange housing recovery in Mass.
Discuss - A very strange housing recovery in Mass.
A very strange housing recovery in Mass.
2014-11-10
Info/Broken? - The hottest housing markets in Massachusetts in Q3; let the price cutting begin
Discuss - The hottest housing markets in Massachusetts in Q3; let the price cutting begin
The hottest housing markets in Massachusetts in Q3; let the price cutting begin
2014-11-08
Info/Broken? - MA SFH Sep 2014 vs Sep 2013 - MAR: nominal median unchanged, volume down 3.3%
Discuss - MA SFH Sep 2014 vs Sep 2013 - MAR: nominal median unchanged, volume down 3.3%
MA SFH Sep 2014 vs Sep 2013 - MAR: nominal median unchanged, volume down 3.3%
2014-11-08
Info/Broken? - MA SFH Sep 2014 vs Sep 2013 - Warren Group: nominal median down 1.5%, volume down 1.0%
Discuss - MA SFH Sep 2014 vs Sep 2013 - Warren Group: nominal median down 1.5%, volume down 1.0%
MA SFH Sep 2014 vs Sep 2013 - Warren Group: nominal median down 1.5%, volume down 1.0%
2014-09-25
Info/Broken? - MA SFH Aug 2014 vs Aug 2013 - MAR: nominal median up 1.4%, volume down 6.9%
Discuss - MA SFH Aug 2014 vs Aug 2013 - MAR: nominal median up 1.4%, volume down 6.9%
MA SFH Aug 2014 vs Aug 2013 - MAR: nominal median up 1.4%, volume down 6.9%
2014-09-25
Info/Broken? - MA SFH Aug 2014 vs Aug 2013 - Warren Group: nominal median up ~2.0%, volume down 6.6%
Discuss - MA SFH Aug 2014 vs Aug 2013 - Warren Group: nominal median up ~2.0%, volume down 6.6%
MA SFH Aug 2014 vs Aug 2013 - Warren Group: nominal median up ~2.0%, volume down 6.6%
2014-09-24
Info/Broken? - U.S. Home Prices Are Now Just 6.4% Below (nominal) All-Time High
Discuss - U.S. Home Prices Are Now Just 6.4% Below (nominal) All-Time High
U.S. Home Prices Are Now Just 6.4% Below (nominal) All-Time High
2014-09-17
Info/Broken? - Lexington Living: The real reason your home isn't selling
Discuss - Lexington Living: The real reason your home isn't selling
Lexington Living: The real reason your home isn't selling
2014-08-28
Info/Broken? - MA SFH Jul 2014 vs Jul 2013 - MAR: nominal median up 2.9%, volume down 6.3%
Discuss - MA SFH Jul 2014 vs Jul 2013 - MAR: nominal median up 2.9%, volume down 6.3%
MA SFH Jul 2014 vs Jul 2013 - MAR: nominal median up 2.9%, volume down 6.3%
2014-08-28
Info/Broken? - MA SFH Jul 2014 vs Jul 2013 - Warren Group: nominal median up 1.7%, volume down 4.2%
Discuss - MA SFH Jul 2014 vs Jul 2013 - Warren Group: nominal median up 1.7%, volume down 4.2%
MA SFH Jul 2014 vs Jul 2013 - Warren Group: nominal median up 1.7%, volume down 4.2%
2014-08-25
Info/Broken? - RIP HousingTracker
Discuss - RIP HousingTracker
RIP HousingTracker
2014-07-30
Info/Broken? - Boston 4th riskiest housing market in US
Discuss - Boston 4th riskiest housing market in US
Boston 4th riskiest housing market in US
2014-07-29
Info/Broken? - MA SFH Jun 2014 vs Jun 2013 - MAR: nominal median up 4%, volume down 1.5%
Discuss - MA SFH Jun 2014 vs Jun 2013 - MAR: nominal median up 4%, volume down 1.5%
MA SFH Jun 2014 vs Jun 2013 - MAR: nominal median up 4%, volume down 1.5%
2014-07-29
Info/Broken? - MA SFH Jun 2014 vs Jun 2013 - Warren Group: nominal median up 2.8%, volume up 3.7%
Discuss - MA SFH Jun 2014 vs Jun 2013 - Warren Group: nominal median up 2.8%, volume up 3.7%
MA SFH Jun 2014 vs Jun 2013 - Warren Group: nominal median up 2.8%, volume up 3.7%
2014-07-09
Info/Broken? - Welcome to the Everything Boom, or Maybe the Everything Bubble
Discuss - Welcome to the Everything Boom, or Maybe the Everything Bubble
Welcome to the Everything Boom, or Maybe the Everything Bubble
2014-06-30
Info/Broken? - MA SFH May 2014 vs May 2013 - Warren Group: nominal median up 5%, volume down 10%; MAR: nominal median up 7%, volume down 10%
Discuss - MA SFH May 2014 vs May 2013 - Warren Group: nominal median up 5%, volume down 10%; MAR: nominal median up 7%, volume down 10%
MA SFH May 2014 vs May 2013 - Warren Group: nominal median up 5%, volume down 10%; MAR: nominal median up 7%, volume down 10%
2014-06-03
Info/Broken? - Boston inventory explodes into double digit YOY increase (25.7%)
Discuss - Boston inventory explodes into double digit YOY increase (25.7%)
Boston inventory explodes into double digit YOY increase (25.7%)
2014-06-03
Info/Broken? - "Generation rent" raising demand for multifamily housing
Discuss - "Generation rent" raising demand for multifamily housing
"Generation rent" raising demand for multifamily housing
2014-05-29
Info/Broken? - MA SFH Apr 2014 vs Apr 2013 - Warren Group: nominal median up 0.6%, volume down 2.3%; MAR: nominal median up 2.3%, volume down 7.2%
Discuss - MA SFH Apr 2014 vs Apr 2013 - Warren Group: nominal median up 0.6%, volume down 2.3%; MAR: nominal median up 2.3%, volume down 7.2%
MA SFH Apr 2014 vs Apr 2013 - Warren Group: nominal median up 0.6%, volume down 2.3%; MAR: nominal median up 2.3%, volume down 7.2%
2014-05-14
Info/Broken? - Boston housing inventory finally higher than 1 year earlier
Discuss - Boston housing inventory finally higher than 1 year earlier
Boston housing inventory finally higher than 1 year earlier
2014-05-14
Info/Broken? - Lack of pricing transparency makes "bidding wars" conduits for collusion, market manipulation, and buyer swindling
Discuss - Lack of pricing transparency makes "bidding wars" conduits for collusion, market manipulation, and buyer swindling
Lack of pricing transparency makes "bidding wars" conduits for collusion, market manipulation, and buyer swindling
2014-05-08
Info/Broken? - Middlesex North April recording stats, 2014 vs 2013: deeds down 15%; mortgages down 48%; orders of notice up 41%
Discuss - Middlesex North April recording stats, 2014 vs 2013: deeds down 15%; mortgages down 48%; orders of notice up 41%
Middlesex North April recording stats, 2014 vs 2013: deeds down 15%; mortgages down 48%; orders of notice up 41%
2014-05-01
Info/Broken? - MA SFH Mar 2014 vs Mar 2013 - Warren Group: nominal median up 9%, volume down 8%; MAR: nominal median up 8%, volume down 12%
Discuss - MA SFH Mar 2014 vs Mar 2013 - Warren Group: nominal median up 9%, volume down 8%; MAR: nominal median up 8%, volume down 12%
MA SFH Mar 2014 vs Mar 2013 - Warren Group: nominal median up 9%, volume down 8%; MAR: nominal median up 8%, volume down 12%
2014-05-01
Info/Broken? - 41% of Massachusetts residents want to leave the state
Discuss - 41% of Massachusetts residents want to leave the state
41% of Massachusetts residents want to leave the state
2014-04-22
Info/Broken? - Housing Secretary: "the worst rental affordability crisis that this country has ever known"
Discuss - Housing Secretary: "the worst rental affordability crisis that this country has ever known"
Housing Secretary: "the worst rental affordability crisis that this country has ever known"
2014-04-14
Info/Broken? - Lending Drops to 17-Year Low as Rates Curb Borrowing
Discuss - Lending Drops to 17-Year Low as Rates Curb Borrowing
Lending Drops to 17-Year Low as Rates Curb Borrowing
2014-04-08
Info/Broken? - Mass. pending home sales up 15% YOY in March
Discuss - Mass. pending home sales up 15% YOY in March
Mass. pending home sales up 15% YOY in March
2014-04-05
Info/Broken? - Middlesex North March recording stats, 2014 vs 2013: deeds down 8%; mortgages down 52%
Discuss - Middlesex North March recording stats, 2014 vs 2013: deeds down 8%; mortgages down 52%
Middlesex North March recording stats, 2014 vs 2013: deeds down 8%; mortgages down 52%
2014-04-03
Info/Broken? - Blackstone may shop its (commercial) Boston portfolio in bulk
Discuss - Blackstone may shop its (commercial) Boston portfolio in bulk
Blackstone may shop its (commercial) Boston portfolio in bulk
2014-04-03
Info/Broken? - US: Slumlord Wannabe Blackstone Violates Local Housing Laws by Making Tenants Maintain Rentals
Discuss - US: Slumlord Wannabe Blackstone Violates Local Housing Laws by Making Tenants Maintain Rentals
US: Slumlord Wannabe Blackstone Violates Local Housing Laws by Making Tenants Maintain Rentals
2014-03-27
Info/Broken? - Wanted: Employed 25- to 34-Year-Olds to Buy Houses
Discuss - Wanted: Employed 25- to 34-Year-Olds to Buy Houses
Wanted: Employed 25- to 34-Year-Olds to Buy Houses
2014-03-26
Info/Broken? - MA SFH Feb 2014 vs Feb 2013 - Warren Group: nominal median up 2%, volume down 4.1%
Discuss - MA SFH Feb 2014 vs Feb 2013 - Warren Group: nominal median up 2%, volume down 4.1%
MA SFH Feb 2014 vs Feb 2013 - Warren Group: nominal median up 2%, volume down 4.1%
2014-03-26
Info/Broken? - MA SFH Feb 2014 vs Feb 2013 - MAR: nominal median up 7.3%, volume down 5.9%
Discuss - MA SFH Feb 2014 vs Feb 2013 - MAR: nominal median up 7.3%, volume down 5.9%
MA SFH Feb 2014 vs Feb 2013 - MAR: nominal median up 7.3%, volume down 5.9%
2014-03-26
Info/Broken? - MAR Realtor Market Confidence Index Down 13% YOY
Discuss - MAR Realtor Market Confidence Index Down 13% YOY
MAR Realtor Market Confidence Index Down 13% YOY
2014-03-24
Info/Broken? - Map of home ownership by state from 2003 - 2013
Discuss - Map of home ownership by state from 2003 - 2013
Map of home ownership by state from 2003 - 2013
2014-03-24
Info/Broken? - Boston 2nd-most expensive city in United States
Discuss - Boston 2nd-most expensive city in United States
Boston 2nd-most expensive city in United States
2014-03-21
Info/Broken? - Officials can't decide whether there's a mountain lion in Winchester
Discuss - Officials can't decide whether there's a mountain lion in Winchester
Officials can't decide whether there's a mountain lion in Winchester
2014-03-20
Info/Broken? - Blackstone's Home Buying Binge Ends as Prices Surge: Mortgages
Discuss - Blackstone's Home Buying Binge Ends as Prices Surge: Mortgages
Blackstone's Home Buying Binge Ends as Prices Surge: Mortgages
2014-03-19
Info/Broken? - Fed reduces QE to $55B, will probably end it in fall, and may start raising rates 6 months later
Discuss - Fed reduces QE to $55B, will probably end it in fall, and may start raising rates 6 months later
Fed reduces QE to $55B, will probably end it in fall, and may start raising rates 6 months later
2014-03-14
Info/Broken? - Homebuyers: Will feeling blue morph into feeling misled?
Discuss - Homebuyers: Will feeling blue morph into feeling misled?
Homebuyers: Will feeling blue morph into feeling misled?
2014-03-13
Info/Broken? - MBTA Late-Night Service Begins March 28
Discuss - MBTA Late-Night Service Begins March 28
MBTA Late-Night Service Begins March 28

News & Interesting Links Index
Recent | All
  Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2014 10 11 13 6 6 3 4 3 4   6 2
2013 25 14 13 6 12 18 11 18 8 15 11 9
2012 24 23 27 19 16 6 9 11 7 7 8 13
2011 38 46 45 44 38 45 41 33 21 22 26 31
2010 51 40 63 63 42 48 45 42 40 52 36 43
2009 52 52 59 63 56 37 53 50 52 68 56 54
2008 76 79 77 71 69 51 56 49 66 61 42 48
2007 63 36 85 60 55 45 62 59 52 76 60 60
2006 24 19 40 46 59 45 34 42 44 50 57 49
2005               41 28 18 17 23
 

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