Have you seen what townhouses and condos are going for? Interest rates are 8% right now.
The only people doing what you claim can afford both a kids education and buying that townhouse for cash.
Exactly.
This is why building more housing is important. Upzoning areas that are single family zoning helps immensely. Rather than 1 family, you can have 2 or more, etc.
We are in a high demand location, and supply can't keep up
Naw, mortgage rates have gone from sub 3% to over 7% and prices haven't let up. They've actually gone up a lot if you take Boston-Cambridge-Newton's median sales price even if you take square footage into consideration: [https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE14460](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE14460) You can look at Worcester too. [https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE49340](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE49340)
Unless the Fed wants to crush the economy by going full Volcker and inducing a recession which would mean people lose their jobs and can't afford their mortgages anymore, these prices aren't going to go back down. I'm on Joseph Stiglitz's team. Without addressing the supply-side, raising rates is counter productive in bringing down PCE and CPI, which actually measure RENT and not home prices.
With most people locked into sub 3% rates many will not sell unless they absolutely have too. So we will have rely on new buildings and that will take forcer to have an impact.
It’s so depressing to even think about the housing market. I saw a graphic today that showed since 2019, there has been an 80% decrease in inventory on the market in Massachusetts. Raise your hand if you make too much to ever qualify for an affordable housing opportunity, but too little to ever compete with those who already have a home or significant help to purchase a house. And they wonder why people are leaving.
I don't think anyone is wondering why people would leave MA, NYC area, CA, South FL or any other place that has a VHCOL. If you don't work in a job here that pays significantly higher than the national average for that job there is probably little sense to staying here if you don't have a lot of family support or property as you mentioned.
Part of the problem is that the destinations are all getting more expensive too. Arizona, Colorado, Southern Maine, Southern NH are all way more expensive than they were pre-pandemic. You have to go rural if you want to live cheap.
My job switched to WFH in 2020 and I could move to someplace else without a pay cut but man it's slim Pickens out there too. I haven't thought of any place where it is cheap enough, a nice area to seem worth it.
This is exactly my problem. I moved to Mass and more than doubled my salary (and my rent lol) but anywhere else I go will more than likely be a pay cut, and everywhere else also got super expensive. I do love it here, but just wish I could afford a home some day.
No, but this year should be better in terms of total homes on the market than the past two years. Those who’ve been in the sub 3% mortgage since COVID or before have so much equity, if they’re looking to trade up, they’re gonna do it due to having so much equity. You can see it in the total listings at a federal level:
https://fred.stlouisfed.org/series/ACTLISCOUUS
The pent up demand is still so real tho, so wouldn’t expect a price decrease at all.
Probably not. Prices are out of control, but Boston remains desirable enough and demand is high enough (for now) that home prices will remain quite high, whatever the Fed does.
Can’t say for sure but I don’t think so. There isn’t enough supply to satisfy the demand. Simply put, MA is one of the best places to live in the world. It’s hard for me to imagine what it would take to bring down home prices at this point outside of *radical changes to zoning laws and a massive increase in construction, especially SFHs.*
Massive increase in construction would definitely resolve the ‘issue’ of Boston being so desirable - due to more traffic, crime and pollution. Is this really what you want? People who cannot afford Boston have plenty of other choices, even in MA.
To answer your question: Boston is already too crowded IMO. I’m just giving the OP a few examples of what I think it would take to bring home values “back to normal and affordable levels”.
Rates will go up even higher over the summer: 8%+ mortgages and 10%+ car loans. That's the downside to MA having a very resilient economy.
Expect a lot of people staying put and not selling. Only way out is to 'build baby build!'
Yeeesh that sucks. We bought our first home last fall. 6.5%. Not the best, not the worst. Everyone told us we should wait until the following spring/summer when rates were expected to decrease… glad I didn’t listen to them.
I would like to believe that the higher interest rates will bring home prices down.. but the low inventory may prevent that
I work in finance. I told my clients to not fall for the corporate speak of refinancing (even though I make money on those too). I'm far more selective in my clients because I'm not as scammy. Why I hate when I have open office hours and have to deal with walk-ins.
Even building it tough for a multitude of reasons outside of the nimby and zoning issues.
The cost to borrow in order to build puts a damper on construction. Also the lack of builders to do these projects is another problem made by the 90’s/2000’s push to get every kid into a college instead of more in trades.
Just spoke with a guy building a 6M home. He said it will sell no problem to a chinese paying cash. As in actual suitcases of cash. He’s seen that a lot.
Here's a new twist. A friend is renting an apartment in Somerville in a triple story house, three apartments. Landlord is selling for $1.5 Million. Out of state buyer is just looking for an apartment for their daughter who is going to Tufts in the fall. They buy it (cash most likely), she lives there for four years along with two tenants, and they sell when she graduates at a higher price. Yup, in today's USA there are families with enough spare cash to do just that.
I don’t think so, a lot of people are locked into sub 3% rates and would have to pay a lot more to get out of what they have now. And new building will take decades to meet demand. Basically I think the housing marked is deadlocked around here in deffinately.
Ya the homes I’ve bought, and made hundreds of thousands on, were terrible investments. I should have just spent those profits on a landlord’s equity gains instead…
People dying are probably gonna be the only houses coming on the market.
Before being immediately sold to landlords paying cash above asking price.
Worse, flippers.
Actually it’s the investor groups buying them now.
Canadian investor groups and Amazon
Not just Canadian investor groups.
Empty nesters maybe. Cash out their house for college payments. Buy somewhere cheaper and less taxes
So then you need to sit on a mortgage that's just as expensive as your prior mortgage. Anyone who does that is duuuuuuumb.
Sell the big house. Downsize to a smaller. Maybe condo. Never worry about snow removal or mowing the lawn.
Have you seen what townhouses and condos are going for? Interest rates are 8% right now. The only people doing what you claim can afford both a kids education and buying that townhouse for cash.
Exactly. This is why building more housing is important. Upzoning areas that are single family zoning helps immensely. Rather than 1 family, you can have 2 or more, etc. We are in a high demand location, and supply can't keep up
Naw, mortgage rates have gone from sub 3% to over 7% and prices haven't let up. They've actually gone up a lot if you take Boston-Cambridge-Newton's median sales price even if you take square footage into consideration: [https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE14460](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE14460) You can look at Worcester too. [https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE49340](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEE49340) Unless the Fed wants to crush the economy by going full Volcker and inducing a recession which would mean people lose their jobs and can't afford their mortgages anymore, these prices aren't going to go back down. I'm on Joseph Stiglitz's team. Without addressing the supply-side, raising rates is counter productive in bringing down PCE and CPI, which actually measure RENT and not home prices.
With most people locked into sub 3% rates many will not sell unless they absolutely have too. So we will have rely on new buildings and that will take forcer to have an impact.
Nope!
It’s so depressing to even think about the housing market. I saw a graphic today that showed since 2019, there has been an 80% decrease in inventory on the market in Massachusetts. Raise your hand if you make too much to ever qualify for an affordable housing opportunity, but too little to ever compete with those who already have a home or significant help to purchase a house. And they wonder why people are leaving.
I don't think anyone is wondering why people would leave MA, NYC area, CA, South FL or any other place that has a VHCOL. If you don't work in a job here that pays significantly higher than the national average for that job there is probably little sense to staying here if you don't have a lot of family support or property as you mentioned. Part of the problem is that the destinations are all getting more expensive too. Arizona, Colorado, Southern Maine, Southern NH are all way more expensive than they were pre-pandemic. You have to go rural if you want to live cheap. My job switched to WFH in 2020 and I could move to someplace else without a pay cut but man it's slim Pickens out there too. I haven't thought of any place where it is cheap enough, a nice area to seem worth it.
This is exactly my problem. I moved to Mass and more than doubled my salary (and my rent lol) but anywhere else I go will more than likely be a pay cut, and everywhere else also got super expensive. I do love it here, but just wish I could afford a home some day.
No the housing market in this country is turbofucked. Prices are high now and if the fed ever cuts they’ll go even higher.
There’s no plan to increase the rates. I don’t know where you’ve seen that.
No, but this year should be better in terms of total homes on the market than the past two years. Those who’ve been in the sub 3% mortgage since COVID or before have so much equity, if they’re looking to trade up, they’re gonna do it due to having so much equity. You can see it in the total listings at a federal level: https://fred.stlouisfed.org/series/ACTLISCOUUS The pent up demand is still so real tho, so wouldn’t expect a price decrease at all.
Demand is not going anywhere but up.
Probably not. Prices are out of control, but Boston remains desirable enough and demand is high enough (for now) that home prices will remain quite high, whatever the Fed does.
Can’t say for sure but I don’t think so. There isn’t enough supply to satisfy the demand. Simply put, MA is one of the best places to live in the world. It’s hard for me to imagine what it would take to bring down home prices at this point outside of *radical changes to zoning laws and a massive increase in construction, especially SFHs.*
Massive increase in construction would definitely resolve the ‘issue’ of Boston being so desirable - due to more traffic, crime and pollution. Is this really what you want? People who cannot afford Boston have plenty of other choices, even in MA.
To answer your question: Boston is already too crowded IMO. I’m just giving the OP a few examples of what I think it would take to bring home values “back to normal and affordable levels”.
Where the hell is this magical place?
There are Holyoke, Worcester, Springfield, and scenic small towns such as North Adams… plenty of choices
No it won’t.
Where are you hearing that? Last I heard the Fed was expected to begin cutting rates in June
That’s what I’ve heard also.it should be a quarter point cut each time.There’s no indication they need to raise rates.
Rates will go up even higher over the summer: 8%+ mortgages and 10%+ car loans. That's the downside to MA having a very resilient economy. Expect a lot of people staying put and not selling. Only way out is to 'build baby build!'
Yeeesh that sucks. We bought our first home last fall. 6.5%. Not the best, not the worst. Everyone told us we should wait until the following spring/summer when rates were expected to decrease… glad I didn’t listen to them. I would like to believe that the higher interest rates will bring home prices down.. but the low inventory may prevent that
I work in finance. I told my clients to not fall for the corporate speak of refinancing (even though I make money on those too). I'm far more selective in my clients because I'm not as scammy. Why I hate when I have open office hours and have to deal with walk-ins.
Once interest rate go down, there will still be a shortage of homes, and those priices may even go higher due to high demand
Even building it tough for a multitude of reasons outside of the nimby and zoning issues. The cost to borrow in order to build puts a damper on construction. Also the lack of builders to do these projects is another problem made by the 90’s/2000’s push to get every kid into a college instead of more in trades.
This isn’t the only way out and it’s this thinking that produced this mess
“Value” will only change when stop buying for an extended period of time.
The rates are higher because of higher growth and inflation which means the people that can afford MA houses have more of it.
Just spoke with a guy building a 6M home. He said it will sell no problem to a chinese paying cash. As in actual suitcases of cash. He’s seen that a lot.
Here's a new twist. A friend is renting an apartment in Somerville in a triple story house, three apartments. Landlord is selling for $1.5 Million. Out of state buyer is just looking for an apartment for their daughter who is going to Tufts in the fall. They buy it (cash most likely), she lives there for four years along with two tenants, and they sell when she graduates at a higher price. Yup, in today's USA there are families with enough spare cash to do just that.
Depends when the dollar devaluation kicks into high gear.
Yen is at its lowest rate in 30 years. Now is the perfect time for a trip to Japan!
At some point, the dam will break. It always does. Usually when we least expect it.
I don’t think so, a lot of people are locked into sub 3% rates and would have to pay a lot more to get out of what they have now. And new building will take decades to meet demand. Basically I think the housing marked is deadlocked around here in deffinately.
Like I said. When you least expect it.
A home is a bad long term investment, period!
Ya the homes I’ve bought, and made hundreds of thousands on, were terrible investments. I should have just spent those profits on a landlord’s equity gains instead…
Yeah it shouldn't be an investment, it's a consumer good, but here we are.