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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 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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2008-10-31
Info/Broken? - Boston Bubble Brief, Sep 2008: Real MA SFH prices plunge 17.49%, now below 2001 estimate
Discuss - Boston Bubble Brief, Sep 2008: Real MA SFH prices plunge 17.49%, now below 2001 estimate
Boston Bubble Brief, Sep 2008: Real MA SFH prices plunge 17.49%, now below 2001 estimate
2008-10-31
Info/Broken? - Mandarin's condos push up Hub average
Discuss - Mandarin's condos push up Hub average
Mandarin's condos push up Hub average
2008-10-30
Info/Broken? - Middlesex North Registry of Deeds: 2008 prices 9.12% below 2007 (nominally) so far, sales way down despite Globe and Herald reports
Discuss - Middlesex North Registry of Deeds: 2008 prices 9.12% below 2007 (nominally) so far, sales way down despite Globe and Herald reports
Middlesex North Registry of Deeds: 2008 prices 9.12% below 2007 (nominally) so far, sales way down despite Globe and Herald reports
2008-10-30
Info/Broken? - Frank's Financial Fiasco - The road to financial hell was paved with Barney Frank's good intentions
Discuss - Frank's Financial Fiasco - The road to financial hell was paved with Barney Frank's good intentions
Frank's Financial Fiasco - The road to financial hell was paved with Barney Frank's good intentions
2008-10-29
Info/Broken? - Beantown Bust: Boston CSI and RPX August 2008 - RPX down 8.56% YOY nominally
Discuss - Beantown Bust: Boston CSI and RPX August 2008 - RPX down 8.56% YOY nominally
Beantown Bust: Boston CSI and RPX August 2008 - RPX down 8.56% YOY nominally
2008-10-29
Info/Broken? - S&P/Case-Shiller Boston Index down nominal 4.7% YOY in August
Discuss - S&P/Case-Shiller Boston Index down nominal 4.7% YOY in August
S&P/Case-Shiller Boston Index down nominal 4.7% YOY in August
2008-10-29
Info/Broken? - Area's rents up 4.2% in one year
Discuss - Area's rents up 4.2% in one year
Area's rents up 4.2% in one year
2008-10-29
Info/Broken? - Quincy looks to force upkeep of foreclosed homes
Discuss - Quincy looks to force upkeep of foreclosed homes
Quincy looks to force upkeep of foreclosed homes
2008-10-28
Info/Broken? - Crashachusetts Existing Home Sales and Prices: September 2008
Discuss - Crashachusetts Existing Home Sales and Prices: September 2008
Crashachusetts Existing Home Sales and Prices: September 2008
2008-10-28
Info/Broken? - Nominal MA house prices fall to 2003 levels
Discuss - Nominal MA house prices fall to 2003 levels
Nominal MA house prices fall to 2003 levels
2008-10-27
Info/Broken? - Groups confirm deep plunge in MA SFH prices from Sep 2007 to Sep 2008 - Warren Group down 15.6% nominal, MAR down 13.2% nominal, both now in the $200K's
Discuss - Groups confirm deep plunge in MA SFH prices from Sep 2007 to Sep 2008 - Warren Group down 15.6% nominal, MAR down 13.2% nominal, both now in the $200K's
Groups confirm deep plunge in MA SFH prices from Sep 2007 to Sep 2008 - Warren Group down 15.6% nominal, MAR down 13.2% nominal, both now in the $200K's
2008-10-27
Info/Broken? - Frank to receive award for throwing subsidies at housing industry
Discuss - Frank to receive award for throwing subsidies at housing industry
Frank to receive award for throwing subsidies at housing industry
2008-10-25
Info/Broken? - Sep 2008 MA SFH prices fall 13.2% nominally from Sep 2007
Discuss - Sep 2008 MA SFH prices fall 13.2% nominally from Sep 2007
Sep 2008 MA SFH prices fall 13.2% nominally from Sep 2007
2008-10-24
Info/Broken? - Economic signs in Mass. point to a recession
Discuss - Economic signs in Mass. point to a recession
Economic signs in Mass. point to a recession
2008-10-24
Info/Broken? - Foreclosures: 2006-2008 for Middlesex North
Discuss - Foreclosures: 2006-2008 for Middlesex North
Foreclosures: 2006-2008 for Middlesex North
2008-10-24
Info/Broken? - FHFA August 2008 Index (PDF): New England only region up MOM (nominally), but down 4.43% YOY (nominally)
Discuss - FHFA August 2008 Index (PDF): New England only region up MOM (nominally), but down 4.43% YOY (nominally)
FHFA August 2008 Index (PDF): New England only region up MOM (nominally), but down 4.43% YOY (nominally)
2008-10-23
Info/Broken? - Massachusetts housing starts drop precipitously
Discuss - Massachusetts housing starts drop precipitously
Massachusetts housing starts drop precipitously
2008-10-23
Info/Broken? - House auctions, foreclosures soar in Brockton - Foreclosure deeds up 77%, but auction announcements skyrocket 132%
Discuss - House auctions, foreclosures soar in Brockton - Foreclosure deeds up 77%, but auction announcements skyrocket 132%
House auctions, foreclosures soar in Brockton - Foreclosure deeds up 77%, but auction announcements skyrocket 132%
2008-10-22
Info/Broken? - Foreclosure deeds up 72% in Mass. this year
Discuss - Foreclosure deeds up 72% in Mass. this year
Foreclosure deeds up 72% in Mass. this year
2008-10-22
Info/Broken? - Mass. foreclosure petitions spike from past months, up 18.6% from September 2007
Discuss - Mass. foreclosure petitions spike from past months, up 18.6% from September 2007
Mass. foreclosure petitions spike from past months, up 18.6% from September 2007
2008-10-22
Info/Broken? - Unemployment Mashup, MA vs. RI September 2008 - MA unemployment still lagging RI
Discuss - Unemployment Mashup, MA vs. RI September 2008 - MA unemployment still lagging RI
Unemployment Mashup, MA vs. RI September 2008 - MA unemployment still lagging RI
2008-10-21
Info/Broken? - Where Homes Are Selling Fastest - Wakefield makes top 10 list
Discuss - Where Homes Are Selling Fastest - Wakefield makes top 10 list
Where Homes Are Selling Fastest - Wakefield makes top 10 list
2008-10-21
Info/Broken? - Freddie Mac secretly paid Republican consulting firm $2M to kill regulation of self and Fannie Mae
Discuss - Freddie Mac secretly paid Republican consulting firm $2M to kill regulation of self and Fannie Mae
Freddie Mac secretly paid Republican consulting firm $2M to kill regulation of self and Fannie Mae
2008-10-20
Info/Broken? - State May Need To Brace For More Budget Cuts - Group To Release Report On Economy
Discuss - State May Need To Brace For More Budget Cuts - Group To Release Report On Economy
State May Need To Brace For More Budget Cuts - Group To Release Report On Economy
2008-10-20
Info/Broken? - Buyers take pass on Tom Brady's posh pads
Discuss - Buyers take pass on Tom Brady's posh pads
Buyers take pass on Tom Brady's posh pads
2008-10-19
Info/Broken? - The blight next door - As the mortgage crisis deepens, neighborhoods feel the pain as some homeowners just walk away
Discuss - The blight next door - As the mortgage crisis deepens, neighborhoods feel the pain as some homeowners just walk away
The blight next door - As the mortgage crisis deepens, neighborhoods feel the pain as some homeowners just walk away
2008-10-19
Info/Broken? - Building Flawed American Dreams
Discuss - Building Flawed American Dreams
Building Flawed American Dreams
2008-10-18
Info/Broken? - HSBC Mortgage forecloses on Ritz condo unit - Financial crisis expands to luxury homeowners
Discuss - HSBC Mortgage forecloses on Ritz condo unit - Financial crisis expands to luxury homeowners
HSBC Mortgage forecloses on Ritz condo unit - Financial crisis expands to luxury homeowners
2008-10-17
Info/Broken? - State fiscal problems may worsen
Discuss - State fiscal problems may worsen
State fiscal problems may worsen
2008-10-16
Info/Broken? - Home Prices Seem Far From Bottom
Discuss - Home Prices Seem Far From Bottom
Home Prices Seem Far From Bottom
2008-10-16
Info/Broken? - Feds grant $62 million for Massachusetts, NH foreclosure fight (Bay State gets $43 million)
Discuss - Feds grant $62 million for Massachusetts, NH foreclosure fight (Bay State gets $43 million)
Feds grant $62 million for Massachusetts, NH foreclosure fight (Bay State gets $43 million)
2008-10-16
Info/Broken? - Gov. Patrick to cut $1 billion and cut 1,000 from state workforce
Discuss - Gov. Patrick to cut $1 billion and cut 1,000 from state workforce
Gov. Patrick to cut $1 billion and cut 1,000 from state workforce
2008-10-15
Info/Broken? - Mass. short by as much as $1.5B - Patrick set to announce deep cuts today
Discuss - Mass. short by as much as $1.5B - Patrick set to announce deep cuts today
Mass. short by as much as $1.5B - Patrick set to announce deep cuts today
2008-10-15
Info/Broken? - October mortgages thus far down 34% from 2008, 75% from 2003 at Middlesex North Registry of Deeds
Discuss - October mortgages thus far down 34% from 2008, 75% from 2003 at Middlesex North Registry of Deeds
October mortgages thus far down 34% from 2008, 75% from 2003 at Middlesex North Registry of Deeds
2008-10-14
Info/Broken? - Local agencies fear worst as Patrick takes up budget ax
Discuss - Local agencies fear worst as Patrick takes up budget ax
Local agencies fear worst as Patrick takes up budget ax
2008-10-13
Info/Broken? - Financial meltdown tests Patrick, Mass. leaders
Discuss - Financial meltdown tests Patrick, Mass. leaders
Financial meltdown tests Patrick, Mass. leaders
2008-10-10
Info/Broken? - Bay State Mayors Gather To Discuss Cuts
Discuss - Bay State Mayors Gather To Discuss Cuts
Bay State Mayors Gather To Discuss Cuts
2008-10-09
Info/Broken? - McCain wants taxpayers to pick up the tab for people who bought houses they couldn't afford
Discuss - McCain wants taxpayers to pick up the tab for people who bought houses they couldn't afford
McCain wants taxpayers to pick up the tab for people who bought houses they couldn't afford
2008-10-09
Info/Broken? - Dealey: instead of labeling critics racist, Frank should reflect that it was his own actions that drove poor, black homeowners to financial ruin
Discuss - Dealey: instead of labeling critics racist, Frank should reflect that it was his own actions that drove poor, black homeowners to financial ruin
Dealey: instead of labeling critics racist, Frank should reflect that it was his own actions that drove poor, black homeowners to financial ruin
2008-10-09
Info/Broken? - SNL mock press conference on bailout
Discuss - SNL mock press conference on bailout
SNL mock press conference on bailout
2008-10-09
Info/Broken? - NARcasting The Future: October 2008 - Yun claims "momentum"
Discuss - NARcasting The Future: October 2008 - Yun claims "momentum"
NARcasting The Future: October 2008 - Yun claims "momentum"
2008-10-08
Info/Broken? - Barney Frank past quote on Fannie & Freddie: "I actually don't want to go too far in terms of making them safe and sound.  I'd rather roll the dice a little bit..."
Discuss - Barney Frank past quote on Fannie & Freddie: "I actually don't want to go too far in terms of making them safe and sound.  I'd rather roll the dice a little bit..."
Barney Frank past quote on Fannie & Freddie: "I actually don't want to go too far in terms of making them safe and sound. I'd rather roll the dice a little bit..."
2008-10-08
Info/Broken? - Barney Frank declares critics racist
Discuss - Barney Frank declares critics racist
Barney Frank declares critics racist
2008-10-08
Info/Broken? - WBUR/NPR debate: Do buyer agents really help consumers save money?
Discuss - WBUR/NPR debate: Do buyer agents really help consumers save money?
WBUR/NPR debate: Do buyer agents really help consumers save money?
2008-10-07
Info/Broken? - Harvard's Glaeser: Why We Should Let Housing Prices Keep Falling
Discuss - Harvard's Glaeser: Why We Should Let Housing Prices Keep Falling
Harvard's Glaeser: Why We Should Let Housing Prices Keep Falling
2008-10-07
Info/Broken? - Listen to NPR broadcast: Housing: What went wrong & how to fix it
Discuss - Listen to NPR broadcast: Housing: What went wrong & how to fix it
Listen to NPR broadcast: Housing: What went wrong & how to fix it
2008-10-06
Info/Broken? - Frank accused of conflict of interest - Boyfriend during 1990's was top exec at Fannie Mae
Discuss - Frank accused of conflict of interest - Boyfriend during 1990's was top exec at Fannie Mae
Frank accused of conflict of interest - Boyfriend during 1990's was top exec at Fannie Mae
2008-10-06
Info/Broken? - Economy creates surge in homeless Mass. families
Discuss - Economy creates surge in homeless Mass. families
Economy creates surge in homeless Mass. families
2008-10-06
Info/Broken? - Expert: Hub study at root of housing crisis
Discuss - Expert: Hub study at root of housing crisis
Expert: Hub study at root of housing crisis
2008-10-06
Info/Broken? - Facing Shortfall, Massachusetts Inquires About a Federal Loan
Discuss - Facing Shortfall, Massachusetts Inquires About a Federal Loan
Facing Shortfall, Massachusetts Inquires About a Federal Loan
2008-10-03
Info/Broken? - House passes revised bailout
Discuss - House passes revised bailout
House passes revised bailout
2008-10-03
Info/Broken? - O'Reilly Tears Barney Frank Apart Over Fannie and Freddie
Discuss - O'Reilly Tears Barney Frank Apart Over Fannie and Freddie
O'Reilly Tears Barney Frank Apart Over Fannie and Freddie
2008-10-03
Info/Broken? - Letter to The Globe lamenting strong bias against home buyers and cognitive dissonance in reporting
Discuss - Letter to The Globe lamenting strong bias against home buyers and cognitive dissonance in reporting
Letter to The Globe lamenting strong bias against home buyers and cognitive dissonance in reporting
2008-10-03
Info/Broken? - September 2008 vs 2007 at Middlesex North Registry of Deeds: Deeds down 8%, mortgages down 27%, foreclosures up 8%
Discuss - September 2008 vs 2007 at Middlesex North Registry of Deeds: Deeds down 8%, mortgages down 27%, foreclosures up 8%
September 2008 vs 2007 at Middlesex North Registry of Deeds: Deeds down 8%, mortgages down 27%, foreclosures up 8%
2008-10-02
Info/Broken? - Beantown Bust: Boston CSI and RPX July 2008
Discuss - Beantown Bust: Boston CSI and RPX July 2008
Beantown Bust: Boston CSI and RPX July 2008
2008-10-02
Info/Broken? - The Arlington Artifice: August 2008
Discuss - The Arlington Artifice: August 2008
The Arlington Artifice: August 2008
2008-10-02
Info/Broken? - Finance Mess: Most Execs Say Mass. Is in Recession
Discuss - Finance Mess: Most Execs Say Mass. Is in Recession
Finance Mess: Most Execs Say Mass. Is in Recession
2008-10-02
Info/Broken? - Redfin to offer Boston MLS searches without registration
Discuss - Redfin to offer Boston MLS searches without registration
Redfin to offer Boston MLS searches without registration
2008-10-01
Info/Broken? - Frank Not Free From Blame In Mortgage Mess
Discuss - Frank Not Free From Blame In Mortgage Mess
Frank Not Free From Blame In Mortgage Mess
2008-10-01
Info/Broken? - Credit crisis hits home - state scrambles for cash
Discuss - Credit crisis hits home - state scrambles for cash
Credit crisis hits home - state scrambles for cash
2008-10-01
Info/Broken? - Frank's fingerprints are all over the financial fiasco
Discuss - Frank's fingerprints are all over the financial fiasco
Frank's fingerprints are all over the financial fiasco

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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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