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October 26, 2005
Boston housing...on the rise????
The Bay State Realtors picked a curious time -- given that interest rates are rising, and many housing markets are starting to soften -- to issue a report predicting that Boston housing was going to keep rising ever-upward in coming years. The report -- titled ``Refuting the Bubble'' -- claims Bay State home prices likely ``will continue to rise rather than decline in the coming months and years,'' according to this account in the Boston Herald. Karl Case, a housing economist at Wellesley College, was quoted as being at least mildly skeptical of the Realtor's conclusions. Among the headwinds are lackluster job growth, an exodus of residents to other areas, and a high housing price-to-income ratio. We have a raging debate occurring on this blog on the Washington DC housing market, but nothing on Boston. I'm curious what Bostonians are seeing in the local housing market.
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? Realtors' "Anti-bubble reports" out of synch with emerging buyers' market? from Counter Intelligence: The Real Estate Cafe Weblog
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Tracked on October 28, 2005 03:51 PM
Thsi was in Today's Boston Globe
"Mass. home prices fall in September Decline is the first monthly drop since February as sales slow"
October 26, 2005
The median price of a single-family house dropped for the first time in seven months as the pace of home sales weakened across Massachusetts in September....
Posted by: Gracie at October 26, 2005 05:45 PM
I rented an apartment in Brookline 2.5 years ago, and paid $1425. I moved out, and the new tenant is paying $1375. A similar size condo in the same building, but on the first floor, was up for sale this summer for $700k.
Rents are dropping.
"Over the next 10 years, according to Census Bureau projections, the number of people between the ages of 35 and 44 in the three southern New England states will fall 18 percent, compared to a 6 percent decline in the nation as a whole."
Given my experiences with rent now, there seems to be less young people to rent apartments in Boston. So maybe there will be less families in the future to buy basic single family houses in the Rt 128-Rt 495 burbs?
Posted by: PS at November 1, 2005 01:02 PM
All indications right now is that the market is soft. Inventory is on the rise, prices are coming down. If they were to make a movie of my last open house I would called it "Home Alone"
Posted by: John at November 7, 2005 04:06 PM
If you think Boston is too high come to Cape Cod. Baby boomers are retiring, want to return to Cape Cod. Price are the lowest now but come spring they will go up. I agree less family homes, but second and retirement homes will be on the rise. Invest in condos resell higher. Dale
Posted by: Dale Keijser at November 12, 2005 04:38 PM
I work for a prominent mortgage broker that handles a large chunk of the mortgages (re-fi's, etc..) in MA,NH,NY. Since the beginning of 2006 we have seen a sharp decline in all types of mortgages flowing through our office. Where we would normally see 40-50 (at my office alone) a week in 2004, we??e seen 10-15 weekly in Jan 2006 (last week we did less than 10).
There are some very nervous originators and agents who see what?? coming. They are already willing to take a loss (abet small) for the realistate they recently bought hoping to flip.
It's fairly obvious the bubble has popped and we are just at the beginning of the downward spiral. It?? my personal belief that the reports of a slow steady decrease in prices are simply to stop people from panicking. The fall most likely will be sharp and sustained for 2006 and most likely 2007.
Posted by: John at January 27, 2006 11:21 AM
I've lived in Boston since 1981. I watched the whole housing boom in the late eighties and watched houses lose 50% of their value in the first half of the 90's. I was renting the bottom floor of a two family house in Jamaica Plain. The landlord lived upstairs and he kept trying to sell the house for what a realtor told him he could get for it in the late eighties--$260,000. One day, a realtor came down and asked me if I was interested in buying--for $139,000. I was still in school, so I couldn't do it. But I'm telling this story for the benefit of those who think that prices don't ever go down in housing. They do. And what makes Boston particularly prone to boom and bust times is the constant influx of young adults who don't know the history of Boston, people who will believe a realtor when they say, "This is a steal--buy it before someone else gets it!" If any of these new immigrants would have just taken the time to research house values in Boston over the past 10 years, they would have seen that there has been a tripling of real estate prices (and more). Anyone who has lived here since 1990 knows that Boston almost tore down the Citgo sign because the city couldn't afford the electricity to run it.
It's a crime what's happened to Boston. When this housing bubble bursts, I feel bad for all the working class people who felt they had no choice but to pay incredible prices for homes in the neighborhood they grew up in, but I will feel that justice has been served to all those who willingly played the game to pull themselves up to a higher level on the backs of those who could least afford it. Maybe this time, people will learn that it's just unethical to profit off a basic need, especially when it's they who are losing the roof over their head. Nothing like hard times to grow a little empathy for those who are less fortunate. And all you speculators--don't even criticize big oil for price gouging. What you did was no less harmful. So--how are we going to fi x this mess? How are we going to be the fair and equitable society are founding fathers (and mothers) wanted us to be?
Posted by: Terri at May 7, 2006 11:12 PM
The rule of thumb is:What goes up, must come down.
Unless Boston area employers are willing to triple everyones salaries home sellers have no other choice but drop the prices. And if it takes a long time to settle the narket it will be worse since for years now young people are moving out of MA, and there are many other cities in US that offer affordable housing with stromg economy and mild climate.
They should not have let the balloon go this far on everybody's expense.
Posted by: Eti at June 29, 2006 03:15 PM