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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
2010-07-30
Info/Broken? - Boston Bubble Wrap: June 2010
Discuss - Boston Bubble Wrap: June 2010
Boston Bubble Wrap: June 2010
2010-07-30
Info/Broken? - Homeowners, renters may get more help - MA legislation would increase protections against foreclosures
Discuss - Homeowners, renters may get more help - MA legislation would increase protections against foreclosures
Homeowners, renters may get more help - MA legislation would increase protections against foreclosures
2010-07-30
Info/Broken? - 10 homes for $375K - Boston 2nd worst space
Discuss - 10 homes for $375K - Boston 2nd worst space
10 homes for $375K - Boston 2nd worst space
2010-07-30
Info/Broken? - This American Life: Household budget cutting stories (audio)
Discuss - This American Life: Household budget cutting stories (audio)
This American Life: Household budget cutting stories (audio)
2010-07-29
Info/Broken? - Savings from price reductions make housing tax credit look foolish
Discuss - Savings from price reductions make housing tax credit look foolish
Savings from price reductions make housing tax credit look foolish
2010-07-29
Info/Broken? - Report: Recovery slows in regions
Discuss - Report: Recovery slows in regions
Report: Recovery slows in regions
2010-07-28
Info/Broken? - Why Only Some Housing Markets Are Improving
Discuss - Why Only Some Housing Markets Are Improving
Why Only Some Housing Markets Are Improving
2010-07-28
Info/Broken? - US seeks to overhaul Fannie, Freddie
Discuss - US seeks to overhaul Fannie, Freddie
US seeks to overhaul Fannie, Freddie
2010-07-27
Info/Broken? - MAR: Jun 2010 MA SFH median up 8.2% nominal over June 2009, as alleged deadline for tax credit approached
Discuss - MAR: Jun 2010 MA SFH median up 8.2% nominal over June 2009, as alleged deadline for tax credit approached
MAR: Jun 2010 MA SFH median up 8.2% nominal over June 2009, as alleged deadline for tax credit approached
2010-07-23
Info/Broken? - Unfinished business - Can the American mortgage market survive without taxpayer support?
Discuss - Unfinished business - Can the American mortgage market survive without taxpayer support?
Unfinished business - Can the American mortgage market survive without taxpayer support?
2010-07-23
Info/Broken? - US home sales slump 5.1% in June
Discuss - US home sales slump 5.1% in June
US home sales slump 5.1% in June
2010-07-22
Info/Broken? - Bankruptcy filings up 25% in Mass.
Discuss - Bankruptcy filings up 25% in Mass.
Bankruptcy filings up 25% in Mass.
2010-07-22
Info/Broken? - Fort Point building plan scaled back
Discuss - Fort Point building plan scaled back
Fort Point building plan scaled back
2010-07-21
Info/Broken? - Boston Fed: Gloom, no boom
Discuss - Boston Fed: Gloom, no boom
Boston Fed: Gloom, no boom
2010-07-21
Info/Broken? - Congress moves to retroactively extend unemployment benefits
Discuss - Congress moves to retroactively extend unemployment benefits
Congress moves to retroactively extend unemployment benefits
2010-07-20
Info/Broken? - Mass. foreclosures increase 109% in June, set to exceed 2008 numbers
Discuss - Mass. foreclosures increase 109% in June, set to exceed 2008 numbers
Mass. foreclosures increase 109% in June, set to exceed 2008 numbers
2010-07-19
Info/Broken? - Bank offers struggling borrowers more aid
Discuss - Bank offers struggling borrowers more aid
Bank offers struggling borrowers more aid
2010-07-19
Info/Broken? - Economists: No "Double Dip," But Weak Recovery For Mass.
Discuss - Economists: No "Double Dip," But Weak Recovery For Mass.
Economists: No "Double Dip," But Weak Recovery For Mass.
2010-07-19
Info/Broken? - Downtown condo market sees uptick in foreclosure activity
Discuss - Downtown condo market sees uptick in foreclosure activity
Downtown condo market sees uptick in foreclosure activity
2010-07-19
Info/Broken? - Ex-Boston councilor's family put Plymouth property on market
Discuss - Ex-Boston councilor's family put Plymouth property on market
Ex-Boston councilor's family put Plymouth property on market
2010-07-16
Info/Broken? - No letup in foreclosures
Discuss - No letup in foreclosures
No letup in foreclosures
2010-07-15
Info/Broken? - Mass. home sales slump, may trigger more falling prices
Discuss - Mass. home sales slump, may trigger more falling prices
Mass. home sales slump, may trigger more falling prices
2010-07-15
Info/Broken? - Massachusetts employers add only 500 jobs in June
Discuss - Massachusetts employers add only 500 jobs in June
Massachusetts employers add only 500 jobs in June
2010-07-14
Info/Broken? - Massachusetts #5 in CNBC's top states for business in 2010
Discuss - Massachusetts #5 in CNBC's top states for business in 2010
Massachusetts #5 in CNBC's top states for business in 2010
2010-07-14
Info/Broken? - MA REALTOR(R) sentiment down in June - President Sears: "members believe the market will continue to improve"
Discuss - MA REALTOR(R) sentiment down in June - President Sears: "members believe the market will continue to improve"
MA REALTOR(R) sentiment down in June - President Sears: "members believe the market will continue to improve"
2010-07-14
Info/Broken? - Developer may exit Filene's project - City's deadline is approaching
Discuss - Developer may exit Filene's project - City's deadline is approaching
Developer may exit Filene's project - City's deadline is approaching
2010-07-13
Info/Broken? - Sampling of recent, local foreclosures and resales
Discuss - Sampling of recent, local foreclosures and resales
Sampling of recent, local foreclosures and resales
2010-07-13
Info/Broken? - MLSPIN: Mass. home, condo sales rise 20% in June, SFH nominal median up 8% YOY nominal
Discuss - MLSPIN: Mass. home, condo sales rise 20% in June, SFH nominal median up 8% YOY nominal
MLSPIN: Mass. home, condo sales rise 20% in June, SFH nominal median up 8% YOY nominal
2010-07-13
Info/Broken? - Money Magazine's best places to live: Newton #3, Waltham #28, Brookline #39, Weymouth #52
Discuss - Money Magazine's best places to live: Newton #3, Waltham #28, Brookline #39, Weymouth #52
Money Magazine's best places to live: Newton #3, Waltham #28, Brookline #39, Weymouth #52
2010-07-12
Info/Broken? - Foreclosure crisis phase 2: The negative equity dilemma
Discuss - Foreclosure crisis phase 2: The negative equity dilemma
Foreclosure crisis phase 2: The negative equity dilemma
2010-07-12
Info/Broken? - Boston Mayor Threatens Filene's Developers With Eminent Domain Power
Discuss - Boston Mayor Threatens Filene's Developers With Eminent Domain Power
Boston Mayor Threatens Filene's Developers With Eminent Domain Power
2010-07-09
Info/Broken? - Defaulting Homeowners Finally Pay the Price
Discuss - Defaulting Homeowners Finally Pay the Price
Defaulting Homeowners Finally Pay the Price
2010-07-08
Info/Broken? - U.S. 30-Year Mortgage Rates Decline to Record 4.57%
Discuss - U.S. 30-Year Mortgage Rates Decline to Record 4.57%
U.S. 30-Year Mortgage Rates Decline to Record 4.57%
2010-07-08
Info/Broken? - MA June Pending Home Sales Down for Second Straight Month, 16% YOY decline
Discuss - MA June Pending Home Sales Down for Second Straight Month, 16% YOY decline
MA June Pending Home Sales Down for Second Straight Month, 16% YOY decline
2010-07-08
Info/Broken? - Fannie Mae, Freddie Mac Debate Begins as Taxpayers' Costs Mount
Discuss - Fannie Mae, Freddie Mac Debate Begins as Taxpayers' Costs Mount
Fannie Mae, Freddie Mac Debate Begins as Taxpayers' Costs Mount
2010-07-07
Info/Broken? - Boston sellers cut prices average of $39K - $43K following end of $8K tax credit
Discuss - Boston sellers cut prices average of $39K - $43K following end of $8K tax credit
Boston sellers cut prices average of $39K - $43K following end of $8K tax credit
2010-07-06
Info/Broken? - MA foreclosure initiations slow, completions surge
Discuss - MA foreclosure initiations slow, completions surge
MA foreclosure initiations slow, completions surge
2010-07-06
Info/Broken? - Mass. business confidence rose in June
Discuss - Mass. business confidence rose in June
Mass. business confidence rose in June
2010-07-05
Info/Broken? - Walpole-based Mortgage Master Inc. must pay $585G fine
Discuss - Walpole-based Mortgage Master Inc. must pay $585G fine
Walpole-based Mortgage Master Inc. must pay $585G fine
2010-07-02
Info/Broken? - Middlesex North Registry of Deeds, Jun 2010: Deeds up 13%, foreclosure deeds up 620%, mortgages down 31%
Discuss - Middlesex North Registry of Deeds, Jun 2010: Deeds up 13%, foreclosure deeds up 620%, mortgages down 31%
Middlesex North Registry of Deeds, Jun 2010: Deeds up 13%, foreclosure deeds up 620%, mortgages down 31%
2010-07-02
Info/Broken? - Economic recovery faltering, data suggest - US jobless claims up, home sales down
Discuss - Economic recovery faltering, data suggest - US jobless claims up, home sales down
Economic recovery faltering, data suggest - US jobless claims up, home sales down
2010-07-02
Info/Broken? - Jilted condo buyers win suit - Harvard, MIT staff sought co-op
Discuss - Jilted condo buyers win suit - Harvard, MIT staff sought co-op
Jilted condo buyers win suit - Harvard, MIT staff sought co-op
2010-07-01
Info/Broken? - Harvard Grad Guns for Frank Financial Answers
Discuss - Harvard Grad Guns for Frank Financial Answers
Harvard Grad Guns for Frank Financial Answers
2010-07-01
Info/Broken? - May US pending home sales tumble to record low
Discuss - May US pending home sales tumble to record low
May US pending home sales tumble to record low
2010-07-01
Info/Broken? - Fed Made Taxpayers (Mortgage) Junk-Bond Buyers Without Congress Knowing
Discuss - Fed Made Taxpayers (Mortgage) Junk-Bond Buyers Without Congress Knowing
Fed Made Taxpayers (Mortgage) Junk-Bond Buyers Without Congress Knowing

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