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Boston house prices drop by record amounts
By adamg on Tue, 01/27/2009 - 10:08pm
Redfin Boston posts November numbers from the S&P/Case-Shiller Home Price Indices, which show that in November, prices dropped like a rock, unlike past, gradual declines. Even with the plunge, Boston values have still gone down less than prices in other major metropolitan areas:
... It will be interesting to see if this marks the start of a new trend or a just one-month aberration. ...
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Comments
grimacing
This doesn't surprise me.
I'm still smarting from what I saw on one of the online home values sites (not Zillow, but another one), which showed my little JP condo taking about a 10% hit in value from the 2003 buying price.
Thank goodness I enjoy my place a lot and really like the neighborhood...
Yeah, funny thing about houses
They're not just investments - you can actually use them in your daily life :-).
yup!
As opposed to my retirement account, which just sits there and declines. But that's a different story that I'd rather not revisit so long as I'm within walking distance of sharp objects in the kitchen.
I'm glad I never saw my place as an investment to flip. I knew as soon as I moved in that I was fortunate to have a nice little home for myself. Nothin' fancy, but home.
Bring on the Plummet
No harm wished upon those who bought near the top of the market, but in a selfish sense, I'm hoping that prices in town come down to sane levels.
Prices in Cambridge, for example, are still ridiculous. This works for the wealthy and the poor, but not for a middle class.
I agree
The housing market got ridiculous, completely out of control, and it's still not affordable for many people.
I bought in 2003 because I had hit my 40s, finally paid off my law school student loans, and was able to get a good interest rate. Though I'm hardly a housing market expert, even I knew that I was unlikely to buy something that would skyrocket in value. By that time prices had already gone too high. Applying hindsight I should've bought earlier, but on the other hand I'm really happy where I live, so I'll take that good fortune as a blessing.
Had the housing bubble been a "normal" one, then its bursting would've opened up buying opportunities for more people. But this subprime market debacle completely, utterly screwed the pooch, taking down the entire economy with it. The resulting depressed wages and job losses mean that fewer people are able to buy even at lower prices.
Yeah we hit a point where
Yeah we hit a point where the average person could not buy an average home... The question of who is buying these places, and the bubble exploded when everyone realized that prices were too high and others couldnt cash in their sub prime loans for new sub prime loans at the end of five years.
Im not a housing expert, or an economist but I would assume that in order to sell something there needs to be people in the marketplace willing to buy that item from the price you want. That being said the "experts" should have known that prices were too high just by looking at census data. Sure some areas could suck up people who make more then the current average person, but there are only so many of those people running around.
even before
Even before the subprime market was driving housing purchases, too many people with moderate incomes were taking out larger standard mortgages than was good for them because the prices had gone so high. Unfortunately some of the those folks will get caught in this downtown as well.
When I was buying in 2003, the frenzy was close to but not quite at its peak. The crap that people were putting on the market at higher & higher prices was amazing. "Gut rehabs" that looked more like patch jobs with a coat of paint, "near public transportation" only if you're a marathon walker, etc. etc. I know some of this is normal real estate speak, but it was way outta hand, and there was this desperation that if you didn't buy, you'd somehow never ever own. It become irrational.
Thankfully I didn't get caught up in all that, trying to stay within my means -- fortunately I inherited from my Mom some of her Depression-era caution with money -- but I recall friends & acquaintances who presumably made a little less than me looking at places a lot more expensive.
What I love is when people
What I love is when people buy multi apartment homes, and the standard rents in the area dont cover the mortgage, or even come close. I knew someone that convinced himself that if he gutted the kitchen and put in stainless/granite and put in hard wood floors the apartment in the bad neighberhood that was going for 900 a month would suddenly be worth 1,500 a month. Im sorry to report that when you multiple that logic by three and add in that if you buy high, well it doesnt work out well. The poor sap found out the hard way that its not just quality of apartment, its location as well. I loved the apartments and would have rented one, but the house next door is boarded up and the other houses on the street were not much better (plus I couldnt afford his rents!) I feel bad that he lost it all, and Im sure vultures will rip all that flooring and piping out while its in the bank hands, but its a learning experience I guess.
It’s hard to pick just
It’s hard to pick just where it started and what caused it, but I’m guessing the downturn and tanking of housing was caused more by investors realizing they had no freaking idea what the value of the debt securities on their books were, but they did know what they paid.
It pretty much instantly froze the credit markets at a time when loans defaulting started to rise.
If those securities were rated what they really should have been, defaulting on mortgages would still have been a problem, but one that wouldn’t have been like a damn breaking over into other areas of the economy.
I near pooped my pants when
I near pooped my pants when I got my property tax statement. The city devalued my place at 40K less than it had the previous year. The upside is that really lowered my tax bill, which is now paid in full something like 3 times over. As I'm not looking to get out any time soon, it's all good.
I don't look at the 401K. Nothing good can come of that.
JUst be careful for the
JUst be careful for the upswing when they reevaluate the taxes for the next fiscal year...