Red meat for the doom and gloomers

Bargain hunters will not come out until there are bargains to be found!

I take offense at beeing called "a doom and gloomer" just because I want to have an affordable house for my family.

I think buyers are just getting a little smarter/in touch with reality. Despite the drastic downturn in the ecomonic environment, there are still people in Boston out there ready or willing to buy -- my guess (and I may be biased/out of touch since I am not a real estate agent and am no longer in the market to buy) is that some of the slowdown we are seeing in the downtown market is due to the condo frenzy dying down, especially since people are realizing the harsh reality that their investment won't be yielding a 20% return over a couple years, like in years past.

you the man chili

keep firing those zingers right down the pike...

And if it doesn't pay off for these speculators, I suppose we'll bail them out too?

Already falling prices and sales; the credit crunch; the suddenness of the financial collapse in September and October; the fact that it is the "off-season" for real-estate....given all of this contributing to the worst environment anyone can remember, should it really be surprising that November set new lows? I don't think so.

Should we all find a high roof and jump straight off? No, I don't think so. Eventually, maybe this year, maybe 2010 or 2011, confidence will return, unemployment will stop getting worse, fear will recede, people will see bargains, and they'll start buying houses with all that stored up cash. And when that happens overhang will decline -- I suspect very quickly, given how little building there is, but I have no numbers). Housing will return to something resembling normalcy, that is, how it was pre-2001 (to pick a date).

And that's it. Nothing more to be said. No one can tell you when it will all happen or in what way the numbers will dip and climb to reflect it, but it will happen. It just requires patience. So sayeth Solomon. ;-)

The chickens have come home to roost. Housing prices were artificially much too high - it had to end. Many got in over their heads with no regard for financial responsibility. No symphathy here from that group. It's too bad those who were prudent must no help bail them out. Those who made their fiscally irresponsible beds should sleep in it - all by themselves.

Doom and gloom is totally inappropriate, how about people who have a good perspective on where house values should be. Also what is doom and gloom about lower prices?

low food prices - good
low clothing prices - good
low fuel prices - good
low home prices - gloom and doom?

$275,000? Thats still almost double of what those houses sold for in the late 90's. You get decent, (not fixer-uppers) around that price and we'll talk. Or maybe lets even get closer to that National average.

Alex - You are what you are. You can have whatever excuse you choose not to buy but, there are bargains out there. Step up to the plate and buy something.That is, if you have the ability . It is a great time to buy.

Alex you are offended? Please, guess it doesn't take much. Very sensitive these days Alex

In a way, this recession is a lesson for all of us to learn to live with less and be thankful for what we've got. Consumerism has run rampant for so long that the "wants" have become the "needs" and people were getting in over their heads to fill their homes with things they didn't need and couldn't afford. That said, there are plenty of people who never had basic needs met in the first place, and the recession especially puts those people at risk. It is the working poor who are suffering the most and should be helped the most, not high paid executives.

Bargain hunters, how about buyers who just have realistic pricing expectations? The media calls them "bargain hunters" because they don't feel like over-paying like every fool who did in the last ten years, for a leveraged, non-income-producing, illiquid, relatively high maintenance asset? Sounds like realtorspeak to me....

"Doom & Gloomer" is really just another way of saying rational. C'mon dude! Just cuz people think prices have to get back to historical ratios post-bubble doesn't make us apocalyptic. Jeez.

Didn't hear people griping about $4.00 gas (which also proved to be driven purely by speculation) described as "Doom & Gloomers"

Heck, I hope real estate prices DON'T fall anymore, but my wages increase 100% in 5 years instead. If that makes folks happy, then I'll take that instead.

Funny how the doom and gloom is becoming reality. And the worst is probably yet to come.

I second that, Alex.

The type of property that the article indicated are being bought by developers and speculated are not ones that would qualify for convential mortgages so they are not taking inventory that typical buyers would go after.

Not to be an optimist or a pessimist, but here are a few points. First the positive: Buyers are wisely waiting for the 4.5% rates that should be coming in the stimulus package, and why wouldn't they? This compounds the typical November/December slowdown. Many places, like Brookline and the South End do not have high inventories and are poised to have a solid spring. The stimulous package, the new year, and the new president should help restore confidence. Now the one big negative that may engulf everything: unemployment and the threat of unemployment may doom anything positve that is going on.

I, too, want to be able to buy a house. There is no reason for anyone to enter the market until prices are affordable. I bought a house in Boston in 1994. When I was looking back then it was not unusual to see houses for $100k and UNDER. Yes, folks, there is no reason to jump back in until prices are affordable.

face it, now is a terrible time to buy, but the realtors and mortgage brokers on these blogs will continually say "rates are down, buy now", like a bunch of bleating sheep....

I suppose we need to make up a name for those who argues against lower prices or just wishes it were not so. Anyone?

Hi Everyone!

Hey did you all read Jonathan Ford's blog? Amazing news about the downtown city center markets!! Case in point: the average price in the Back Bay has held steady during the past few months, as compared to last year! The average price on Beacon Hill? It's gone UP, in fact it's cracked the $1000/sqft mark!!!

Incredible, amazing news. Yup, as I've said all along and have been proved correct time and time again, Boston is immune! The sky might be falling outside of town, but down here, we're rockin' and ROLLIN!!!

Happy New Year everyone! May 2009 be as blockbuster a year as 2008!!!

Happy New Year! Who cares about Beacon Hill really? Well, somebody does, clearly, but how many people?

Prices grew like mutant beanstalks into 2006 riding on the top of a huge bubble. That was the time to sell if you were looking to step up. But if it's now the end of 2008 and you're still lamenting the disappearance of your paper gains--sorry, you missed your chance to sell during the tulip frenzy.

So, I'm sitting here, waiting to buy with 20%+ cash down. But I'm looking at the $400,000 houses, and they're either teardowns or extensive fixer-uppers. So, I'm just going to sit tight until the nice looking, ready to move in $500k to $600k houses drop another 25%. That is, waiting for sellers to come back in touch with reality.

Mass housing prices will drop another 20%. And thats optimistic. Mass. municipalities that continue to raise taxes based on false home values will go into receivership. When people start putting homes back on the market in the spring, price will spiral down. To many houses on the market, not enough qualified buyers. A steep and deadly slope.

I am so glad that I sold my home before the ceiling dropped and then became a GA peach. Yes, weather here cold enough for fleece coats, hats and gloves but not nearly as bad as what the Greater Boston area is experiencing. Yes, the job situation is bleak but it is true all over our country. Real Estate should be a haven to raise your family in &/or live your dreams. But the no money down/qucik loan approval programs put a lot of really unqualified people into homes that they could not afford and maintain. And real estate market is in a glut of oversupply and spec. homes witjh builder/developers suffering and buyers hesitant to move into new developments in fear they won't be finished. One thing Boston has which will be its always shining attraction is the proximity to the ocean, islands, and gateway towards the Cape. It is a fabulous place to live in if you can afford it....

The NYTimes recently graphed the last couple decades of house prices. It was a reminder of how short a time prices have been at these high levels ... even with all this talk of dramatic drops, we are only back to about where the national average was in 2003! Looked at that way, there is a long way to drop, to get back in line with people's incomes.

You want doom and gloom? Those that could only get into a house by way of a 5 year ARM in 2005 and 2006 are still looking at a couple of more years of resets. Ouch.

Merry Christmas everyone.

Housing prices rose two hundred percent. In the same period, average wages rose 30%. What do you expect would happen? We are still no where near where prices should be. I'm watching people buy today's bargains, but am thinking that these "bargains" won't be such bargains next year. Who knows how low prices will go now that job losses are accelerating. Do you want to chance it?

Sunshine and Lollipops, do you know how many other cities claimed to be "immune" because everyone wants to be there. Well let's start with the following. Las Vegas, San Diego, Miami, San Francisco, Tampa, etc. Tell me ho those markets are doing now? Clearly you are a realtor or nervous (highly-leveraged) owner in the Beacon Hill Market. I am sure you will cheerlead this market all the way down, grasping at any remotely positive appearing data just like David Lierah, and Lawrence Fun Yun of the NAR. You should take your meds before you post.

The good thing about buying a house is that you can live there! It is not like buying a stock or mutual fund. If you need/want to buy a house and you can find one that you like that is affordable then why not buy it. If you can't then don't. There is so much benefit to buying and owning a house that you really enjoy that is not related to the investment side of the equation, that it seems silly to wait around to try and get a little more of a financial advantage. Buy a house you can afford at the time you need a house and it will all work out in the long run. Good luck trying to time the market - it is a fools errand.

Alex said: I suppose we need to make up a name for those who argues against lower prices or just wishes it were not so. Anyone?

Realtors. (*rimshot*)
Unaffordable housing activists.
Newspaper ad beneficiaries.
Greater fools.
Grinches (because they don't want housing to be affordable for their children or any future generation).

I agree with you, Alex. I take offense to being called a doom and gloomer simply because I want housing to be affordable again, relative to historical income relationships.

Most of the value of a house is the value of the land. Really, check out the tax assesments or an insurance bill on these properties . There is less available land than there was 20- 30 years ago [because there are so many more people]. Due to supply and demand, prices should increase over time. This is normal. No matter how much of a "fixer", the land always holds most of the value.
A lot of you people need to educate yourselves before you even think about making a long term committment. Anyone who thinks they should be able to buy a piece of land for 1990 prices is likely to end up just like the folks who have driven down the market with their foolish speculation in the last few years.

sunshine, you should sell right now. places like that and manhattan that have been immune will suffer the nastiest drops..50-60%.

the rest, 30% more and some relief. but the market wont bottom until 2012-2013 with stock market bottom. learn to live a little differently.

"I suppose we need to make up a name for those who argues against lower prices or just wishes it were not so. Anyone?"

They already have a name. They're called realtors.

7-8 months ago I bought a small basement condo in a prime location that needed updating. mainly becasue it was the cheapest I could find in a prime rental area. Per my calculations, the total payments including mortgage payment, taxes and condo fees were about the same as I would pay in rent for a similar unit. The numbers worked only in this case, of ALL the others I looked at since mid 2006.

Now, I see apartments better than mine renting for less that my monthly costs on the SAME street. So, my suggestion, rent and not buy, until numbers are only slightly higher thanwith renting

Doom and Gloom? Where? I get Banker and Trademan magazine and all you have to do is read the transactions list to see people buying.

As a Realtor I do not take listings that are over priced and I do not show house to people that are not pre-qualified. I do not waste my time.

I am also working with alot of Banks to help sell their foreclosures. To all of the people waiting for the "bargains", please keep waiting. I own 18 rental untis that bring a very nice monthly income. I love renters.

Housing still hasn't hit my "magic number" yet. It's getting closer, but it's still not there yet. Maybe in a few months.

Not doom and gloom but working 2 good paying jobs and getting a good property in a good neighborhhod and not losing any sleep at night....till the mortgage is paid off.

Sunshine & Lolli's , your over usage of exclamation points is indicative of your general state of insanity. Check your history books & you will see the back bay and beacon hill have gone through boom bust cycles in the past, and they will do so again. You are seeing the highest price you will see for at least the next ten years in these neighborhoods, so I'd advise selling if you still can. Having lived in Back bay, Beacon Hill, South End, Brookline, and J.P., I would say that back bay & beacon hill are the most boring and uninteresting neighborhoods of the bunch. Maybe cause its filled with vapid medicated status hounds who ecstatically proclaim their own net worth out of a general void in their quality of life.

people have to have jobs first...

According to US Census data, 1990 median home in MA was $165K and median household income was $37K. That is a 4.41 ratio. in 2000, median home in MA was $185K and income $50K. That is a ratio of 3.68. This month it is $277K to $64K. 4.33 ratio. You have to go back to the 70's for a 3 to 1 ratio. Also, an interesting note, from 1990 to current median prices is exactly 3% avg. annual growth over the 18 year period. That is inflationary rates, no? Also median income has risen 3.1% avg annual growth over same time period. I am interested to hear the real rationale behind this magical 3 to 1 home to income figures. Unless the census data is wrong, it looks like MA hasn't been at that since the 70's. That is an entire generation. Was an entire generation suppuse to wait to buy a house??Please correct me if I am wrong with these stats. Happy holidays!

We bought a modest 4 bedroom ranch in Dedham in August 2007, at this point we are actually relocating out of the country in June and are going to sell. We aren't moving because of the economy, but also don't want to sell at a massive loss. The house is close to everything--imagine finding a 4 bedroom in great condition 20 minutes from Downtown, with great schools and a big yard and absolute peace/tranquility...still reading? How about $325,000? Still reading? We put a lot of sweat equity into the house, but we are not greedy and exceptionally motivated...The catch is that you buy it now and we rent it until mid-June when we move. We w

sunshine and lollipops is a realtor who has been posting here around a year or so.

I don't really think of myself as a gloom and doom person. I think of myself as a math person. I loved real estate when it was lovable, but that doesn't mean I have to love it when its an awful investment.

For those above who think that now is a great time to buy, a half price ticket on the titanic is no bargain.

That said, November/December numbers are thin data, and I personally wouldn't take them too seriously either way. The spring market will be great data on the other hand....

The “reality” is people were willing and able to bid on homes that they had no business in bidding on and are now in the midst of foreclosure or near it or barely making “making ends” meet. Now that has caused the rest of us, those with cash on hand and who can afford a home are not willing to part with the ole mighty buck because the fear’s of foreclosure, losing their job as the dollar weakens against all other currency in the world and not knowing if the housing market will rise or fall further at this point, why would anyone buy property now? Just because there is a so-called “bargain” out there doesn’t mean you need to “step up to the plate” or “get into the game”. These metaphors are exactly why people are in the predicaments they are in now because they stepped up and are no behind in the count. I am far from being an economist but I can guarantee two things, more foreclosures will appear in the following years and the economy will get worse because “spending” is at a low and will continue to drop.

Doom and gloom = Perhaps too strong of a comment
Bargains to be had = True but “bargain” to whom?
Paying the bills and worrying if you have a job = REALITY

John Glenn said: it seems silly to wait around to try and get a little more of a financial advantage

This is the biggest purchase of your life that we're talking about. Something that will take *30* years to pay off. Waiting could very well save you *years* worth of salary and hence extra work. Making price a deciding factor in your timing is by no means silly - it's the responsible thing to do.

Massachusetts housing prices are going down another 85%, believe it! Anyone who buys now is a sucker and a rube. Just wait, soon there will be a confluence of cataclysmic events (obvious to me if not others), sending prices into a downward spiral and leading to first another 40%, then a further 45% decline by the end of next year. To put my money where my mouth is, I have $15.82 in my savings account. There's a particular home in Wellesley I have my eye on, and when the price gets to below $50 (down from $1.2 million!) I'm going to jump. But not before! I'm not going to be one of those fools who thinks a 20% decline is the end. No friends, I'm waiting for the bottom, and that means 1954 nominal prices. If you calculate the various ratios it becomes clear that my GRANDFATHER overpaid when he spent $8,000 on his first house! Not me though. The rest of you, take heed!

Someone has mentioned Japan. A bunch of relatively small islands with the population of 130 million. Noone makes new land there either and yet their housing downturn is legendary. I don't think it is correct to assume that if something is in limited supply it cannot be overpriced. I think just the opposite is true. Limited supply leads to frantic buying on the belief that the supply may run out before you get there. I mean, look at oil. A finite type of product that was $147 a barrel just a few months ago.

"....it seems silly to wait around to try and get a little more of a financial advantage. Buy a house you can afford at the time you need a house and it will all work out in the long run."

Well, it matters a great deal to me whether my family will be spending 30% of our income on housing or 40% or 50%. That is a question of quality of life. And in the long run? Someone said "don't worry about the long run. In the long run we all will be dead."

Yikes. I can't believe all the people on here that are taking Sunshine & Lollipops seriously. He is being sarcastic. Very sarcastic. I love his posts.

ANYONE who bought in the last 10 years is responsible for the out of control home prices. Greed Greed Greed! They deserve to lose everything they've invested. Then I can waltz in and buy their foreclosed colonial for pennies on the dollar!

Dear "hung wang"

Lower prices on everything might seem good- but that also will effect WAGES.
That's what a "deflationary spiral" is. If you want to buy a house for a 1990 price you might be making a 1990 paycheck.

When this is all over, probably by 2015 or so, if you have $7500 in the bank you will be considered a wealthy person. We are far, far from a bottm in real estate, gasoline or any other of the acoutrements of America's bloated suburban life style.

When this is all over, probably by 2015 or so, if you have $7500 in the bank you will be considered a wealthy person. We are far, far from a bottm in real estate, gasoline or any other of the acoutrements of America's bloated suburban life style.

Alex - Anyone who would advocate buying a house must be a communist or worse, a realtor! Lets make sure we throw around the most incendiary names we can. We should have no discussions of "buying houses now" on the real estate Blog. That would be crazy talk. The only opinion that should be allowed to carry any weight is that of those who very vocally (and desperately) hope prices will drop more catastrophically and are hoping to help make this come true using every bit of ability they have.

John Glenn - You are absolutely correct. Factor in where you think prices will go, but also where you and your family will be and decide what you can afford. If you think you would be better off waiting, that makes sense. _If_ you can afford it now and want it now, go ahead. As a warning, however, I've been told (on other blogs) that buying houses you _can_ afford is the road to ruin and that you should plan your foreclosure now. :)

Mr. Dedham needs a wake up call.

First, not too many people are going to purchase a house, say in January, and wait to June to move in! Good Luck!

Second, I live in Dedham. The Center sucks; traffic choked and just horrible. Unless you are talking about private schools, the schools in Dedham are not that great. Third, The Town is one of the most corrupt "Good Old Boy Network" places to live that I have ever seen. My husband and I rent and are hoping to purchase a house in a few years but not in Dedham.

Dedham = High Taxes, Low Services

Three interesting observations from another person who's bearish on the Mass housing market.

1. A Bloomberg article that highlighted how much more expensive rates are for jumbo loans (about 2% more than conforming loans) - a lot of housing purchases in the Mass area need a jumbo loan

2. The Globe article from the 12/26 paper where it talked about the number of 80/20 loans in the state.

3. From the same article in point two - the Federal Reserve estimates that 10% of all homeowners in Mass are underwater on their mortgages. I'd guess that number has risen since the research was done.

All in all this in my opinion points to that unless you have to, why on earth would you buy or sell a home in Mass right now? Also it seems to point to that fact that the "recovery" will take much longer than most people think.

"Alex - Anyone who would advocate buying a house must be a communist or worse, a realtor!"

BV - I am advocating fundamental fairness which is: a middle class family must be able to afford a middle class home without it being an undue hardship. You guys advocate exactly the opposite. Fix the prices and keep the paper profits in the hands of current homeowners and let all the others go screw themselves 'cause they were not smart enough to buy on the way up. You know what? Now I am starting to wish the prices crash as far as possible to wipe those smug grins from the faces of real estate speculators (to the extent they are still capable of grinning). Turning a basic necessity into a fodder for a Ponzi scheme is simply criminal. Asking for a taxpayer bailout after gorging on all that debt is simply repulsive.

I think instead of calling yourself 'accidental lanlord' that you should really call yourself what you are...

Person who bought into the bubble along with other sheeple who has chosen to be a landlord because they are waiting for the value (that wans't really there in the first place) to come back...

whew! Never mind, just keep thinking your being a landlord was an 'accident' instead of just a series of bad choices..

be careful what you wish for...severely dropping house prices across the board may sound nice, but it will lead to further dropping in consumer spending and increased layoffs...no doubt about it...whether you buy a house for $300K or $200K, being unemployed won't pay the mortgage either way...also wages will get depressed as well for years to come as companies try to coupe with major cash issues...stocks will further drop, eroding more value...it is really not a desirable outcome for anyone....that includes international as they have the exact same issues as US...this is not just an American problem by the way...

First, I have to compliment Scott V.V. for his blog entries. It takes courage to post balanced blog entries against the current of his own paper the Globe, which puts out ridiculous cheerleader stories like the one about the Mandarin condos not falling in value along with 100% of the rest of real estate in the Commonwealth. Keep up the good work Scott! It is a bit sad to see legendary papers like the Globe becoming less respected than new media like bloggers because they appear to be giving in to conflicts of interest in how they slant reporting.
Second, I agree with the postings that there is a long way to fall. Take a look at some of Paul Krugman's recent articles. On NPR Krugman said that the bubble is of historical proportions. He stated that trying to hold home prices up is like trying to hold back the tide. Prices will drop another 20% nationally and regional areas maybe more (like Boston). I tend to believe Krugman more than NAR.

Anne in the great real estate bubble of 1926 (in Florida), the pitch of the day was "we are running out of land", it was the same pitch in Las Vegas from 1995-2005. You can actually give every man, woman, and child in the U.S. a 1/4 acre of land and you would still only fill up 1/2 the state of Texas. There is no land shortage ANYWHERE in the U.S., there is a shortage of reasonably priced land though. The "running out of land" argument is a total joke... I am not sure why many on thi sblog are real estate bulls, unless you make your money peddling over-priced real estate or you are leveraged up like some piss-poor African country.

Hung Wang - NO one is saying we are running out of land as a whole. However, it is true that within 128, especially in the better towns), there are few if any large tracts of build-able land. If you go out to Franklin and places like that, the story is different. Please take a look and tell me if you agree or disagree? It is fine to say this is a non issues, but first please tell me if this is true or not. If you don't agree with this, then any additional discussions on the issue cannot be had, because we don't agree on the premise.

Alex, then why are you trying to insult people, if you are only advocating fundamental fairness? Fundamental fairness would suggest that we not dismiss anyone here! I am not a real-estate speculator (unless you consider buying a house for my family speculation, in which case you would _like_ to be a real-estate speculator too) nor do I hope you cannot buy a house.

45% America bought a home in the last 5 years...65% of America owns homes...35% of America (which is actually historically very low) always don't own homes...I find it amuzing that folks are calling everyone that bought homes in the last 10 years IDIOTS!! You are basically calling every home owner an idiot...home onwnership has always been a wise thing...not an idiotic thing...don't confuse the fact that you can't afford a house as the reason that you did not buy vs. you are some genious...if you are so wise, how come you can't get a better job to afford a home??? Just curious?? Don't profess your intelligence over eveyone else. You are hitting a good time to buy. I hope you keep your job and can afford it. I really do. In a few years, be very thankful that you made it hrough this tought time. Stop calling yourself smarter than the rest of the world!!

BV - Calling someone a real estate speculator is an insult, whereas calling someone a doom and gloomer is completely fine. The whole premise of these blogs and the national discourse on CNN, NPR, etc., seems to be that this country is populated exclusively by existing mortgage borrowers. What's good for existing mortgage borrowers is good for the country. However, I submit to you that perhaps those who are potential buyers are vastly more important for the recovery of this economy than the existing home owners. The reason is simple - new buyers will generate the much needed activity, whereas the existing home owners want to conserve their own profits forcing potential buyers to pay more and more dearly for this bacis necessity called home. Potential buyers need lower prices. Existing owners want to fix the prices and call on the government to help. The frustrating part is that the government sems to be buying this. This frustration is reflected by many posts on this and other blogs. Dismissing you or anyone else is not my intention. However, when I go vote next time I will vote against any politician trying to fix home prices. That's all I can do, anyways.

#50 and others - do you really believe this or are you just that ignorant? I mean, I bought 1 year ago because I needed a place to live, the market had fallen a bit, and I planned to be in this home for many, many years. So the market sank further and my house is worth less. I spend less than 24% of my total income on payments, so I'm okay. Why does everyone think that just because someone bought in the past year or so that we are stupid or greedy??! I mean, life goes on. I am very concerned about the economy, but if you use sound judgement you have to live your life.

Alex -- I respect you opinion as represented in #64 and your future actions to help you and your family's plight, though I disagree with your assessment of the current situation and the desires of current homeowners. We love our house and are very happy, and I hope you can be happy too. Again, good luck!

Alex...you are missing the bigger picture...the Government is not fixing home prices...70% of the US Economy is driven by consumer spending...consumer spending drives the creation of jobs....the more jobs afford more people to then spend or buy homes...consumer spending is driven by consumers confidence that they have some money to spend....the more housing prices drop, the less money to spend for a majority of America...this increases unemployment and the chances for many first time buyers to loose their jobs...thus counter productive for many first time buyers...we should be looking at ways to raise the median income in America...the gap between middle income and the top is 10 times wider than it was 30 years ago....that is the side of the math problem that needs to be fixed more so than just home prices...

But Bill I am smarter than most people. I own 9 pieces of real estate (all unencumbered) in some of the best markets in the world. Hawaii, Turks & Caicos,
and Scottsdale, AZ. My goal here is help people avoid being hurt by the useless shills in the Realtor/Mortgage industry. Anyone with a brain could have seen this developing over the years, initially with the change in the treatment of capital gains
on primary residences in the at 90's, EASY/STUPID credit access over the last ten years, and the securitization of mortgages over the last 18 years, removing much of the accountability neeeded in the mortgage industry. This is a bad time to buy.

#67 - I get the consumer spending being the main driver of the economy. However, we draw different conclusions from the same fact. In order for consumer spending to increase consumers must have enough disposable income left over after basic stuff such as housing. For a while, this basic economic logic was masked by rampant lending. However, now that it is no longer an option what's left? Consumer spending is still imperative for the recovery, I agree. However, higher home prices lead to belt tightening for the rest of us because I have to put away more money for a downpayment and dedicate ever increasing portion of my family income to mortgage payments. If banks are not willing to finance my spending anymore I need to look to lower prices on necessities such as housing and gas as a source of extra money. Further, if prices go down sufficiently to generate demand people will start buying homes. When the volume of deals on the market increases the construction companies, the home improvement people, the brokers, the lawyers, the bankers, the appraisers, the inspectors, etc., etc. will go back to work generating jobs and incomes fueling the economic recovery.

The problem with your scenario, as I see it, is that it still relies on the home as being an ATM for consumer spending. I think it is pretty clear by now that the economy is not going back to that model any time soon.

#68 (Hung)- Clearly now I understand you are a real estate investor and not someone to look at buying a first home. you are looking to score the same way rich real estate investors did in the 80's and 90's...You probably have enough liquidity to purchase homes with little financing required...therefore you hope for housing to plummet and you can come in a buy it cheap...you can't make enough money of housing prices now, so you need them to go down...no doubt, buying a home for real estate speculation is not ideal at the moment...your missing the basic reason for home purchasing. Families need places to live!!

#69-Alex-First time buyers are a smaller portion of the economy...by the way, everyone that buys is a first time buyer at one point, so I am not discriminating against first time buyers...we've all been there...I feel your pain...A home is a long-term investment...if you are a flipper or someone that is looking to climb the property ladder quickly, the best of those days are clearly behind us...I am not saying that a home is an ATM machine....I never suggested that...as home prices relate to interest rates and incomes, first time buyers are better off now then most time periods over the last 30 years...looking at personal cash flow...that is all that I am saying...people have had it a lot worst historically...

Bill - you may be right. I wish that the issue was framed more along the lines of what is best for the economy. Right now, it appears, the national media is surprisingly uniform in taking a position that we must keep the prices where they are in order to help struggling homewoners to stay where they are. I would, actually, like to see some analisys to support that that's what the economy needs. The homeowners represent the bigger portion of the economy, true. That still does not convince me that higher prices is better for the consumer spending. What is the source of extra cash for consumers to spend into the economy if the prices stay where they are? Taking loans against the equity? Where are the extra jobs going to come from? I personally believe that falling housing prices is our way out of the economic crisis. Are there figures available to convince me otherwise?

Well once again, I have been proven right!

Did all you gloom & doomers read the latest article this past weekend about increased prices and sales in Boston's Back Bay? Yup, that's right, as I've been saying over and over and over again, the downtown Boston condo market is absolutely on FIRE, with no sign of let up! I can't tell you how many buyers I have waiting, all of whom are clamoring for listings. It's completely insane! My phone will not stop ringing. People are going crazy, desperate to get in on the downtown city center condo market. And why? Perhaps it's because as I've said time and time again, discerning buyers wish to park their vast resources in a safe place, namely real estate in blue chip neighborhoods, safe from the vagaries of the stock markets.

And yet, when I spread the good news about how Boston Proper is immune from the recession and the real estate crisis happening in less desireable parts of the state, people call me a cynic, or a satirist, mocking the endless All Good News attitude of realtors. Hung Wang above called me crazy! When will you people realize that I'm right, and that I've been right all along? I speak the truth, dear readers! I hate sounding like a broken record, but I feel it's my duty to counter the bad news bears around here who constantly slather their gloomy gravy all over our mashed potatoes.

So I'll say it again, and again, until people get it: Boston is immune. Boston is thriving. There's no recession here and there won't be! Prices: up! Sales: up! Demand: UP UP UP! Call me a fake, call me a statirist, call me what you want, I'll be LOLing all the way to the bank! Tra la la!

#68 Hung - Everything is so clear now. All of your posts, everything. Bill had it right that you are a real estate investor, not a home buyer. Maybe now is a bad time to speculate on the 10th, 11th, or 12th property for your portfolio. Does that necessarily translate as to whether now is a good time to buy for your family's home? I don't know, but the question certainly doesn't even apply to you.

Let the record show, I have absolutely no intention of buying any more real estate of any kind, regardless of what happens with prices. I am trying to help people here from the shameless promoting of the realtors/mortgage officers that helped people get into trouble the last ten years or so. I have several good friends who have gotten killed buying PRIMARY RESIDENCES, because they trusted the advice of a broker who said "real estate always goes up", "buy now or be priced out forever", or a loan officer who said, "don't worry about the rate, you can refinance in two years", blah, blah, blah...

One more thing, I would have to be a total idiot to believe I could influence the direction of a market as large as the residential real estate market in the Boston area, by posting on some blog...

Alex. i don't know if I am right or wrong with regards to where the market is going...I am not a fortune teller...I am just trying to shine some light on why home prices falling off a cliff is not the most optimal scenario for an economy...also things are not that bad considering the historically low intererest rates for families that are talking about long term places to live...from what I know, MA hasn't seen this magical 3 to 1 median home to income ratio in over 30 years...I don't see the rationale that we are going to a 3 to 1 ratio...if we do, then this generation is going to be the luckiest generation in history...3 to 1 ratio and sub 5 interest rates? Pretty good!!

A satirist, Lollipop fairy? You may be many things, but that, you are not. If you are, then somewhere the greats, including Stan Freberg, Dave Barry, and Seth MacFarlane, are rolling over in their graves.

Oh, another thing: did you say you have blue chips? Can I have some of them, I'm very hungry.

Also, I think he actually called you "cwazy".

About the year: I had my best ever. You? Hooray for us!

I'll lift a glass of absinthe to honor you just before midnight on the 31st. Then, after midnight, I'll smoke 11 and 1/2 marijuana joints to celebrate the New Year. I've got my $100 bill already in my wallet.

Best year EVER coming up!!

John, as you well know, Sunshines kept her tune since when it was the zeitgeist. I don't think she's a satirist, I think she's a serious real estate agent.

Anyone else notice that the biggest bears on here are those of us who were professional real estate investors and developers? Clearly we professionals are nuts. Or attempting to sway the market based on this blog...

Or is there another reason? I love how the answer is usually that we were bitter that we couldn't afford a place, when the evidence is we owned many.

In truth, if things overshoot at the bottom I'll back up the truck and be happy, no doubt, but I really don't think my postings on this blog will affect the market - heck, I've not managed to convince anyone who didn't already agree with me.

Charles - you are probably right about everything. You (I gather) owned many pieces of property as investments. Therefore, you should sell low and buy high. Duh! This is how you make your money.

People might poo poo you if you try to reduce purchase of a home (in which you hope to live, raise kids, play, grow old etc.) to a mere financial investment decision. Sure, finances are part of it, but not 100 %. Don't you see that they are different? Most of us make our money working in companies or whatever. When home prices go down we lose money, but we still do everything else. We still work, live, raise kids, etc. When you are a real-estate investor, and prices go down, your lively hood is gone. So you see it the same way a stock broker might see pork futures...merely as an investment.

So yes, I love hearing what you have to say, but yes, it has to be qualified by what your chosen profession is. When you ask me about pharmaceuticals, I will have different insight from you because that is my chosen profession. Not better or worse insight, just different. And if I tell you that a drug is over hyped, you may still need to take it if it is the best one for you, despite the cost.

i hope you understand that I mean this respectfully, and do not think you are crazy.

Buying low and selling high is good for everyone, not just professionals. Money overpaid for real estate is money that could otherwise be spent on kid's education. Or many other things.

I don't think kids have to live in an "owned" house to be successful. My parents owned houses at times, and rented houses many times. Both my brother and I have multiple degrees from well regarded Ivies despite the rentals and the moving - its the family that makes the kids, not the form house ownership is held in.

I'd be rather pleased if real estate started going up again personally. Tough to be an investor/developer in this market. But my father was an economics professor, so I got indoctrinated rather thoroughly with the idea one shouldn't waste one's money. I can't help proselytizing a bit on the subject.

Clearly those of us who are in that business have an interest in real estate going down (as long as it goes up again!) Just as real estate agents have an interest in transactions. But I really hope none of us think we are influencing anyone on this blog, though we are no doubt reflecting our natural prejudices. For me, it's keeping my head in the game. And as for whether I'm right, I put my predictions down, and can be called on if they are wrong (hasn't happened so far)

#58: Woah just me, nice one! You really got me there! Let's review your post: You're smart. I'm dumb. You're savvy and knowlegeable about (well gosh, let's just say about everything). I'm a "sheeple"....which is, I guess, a person who follows the herd, sheep-like.

I mean, when I think about it, you're so very RIGHT. I mean, I got married in 2002 and bought a HOUSE in 2003. I mean, what kind of blooming IDIOT buys a HOUSE!? HAHAHA...whew....boy what a sheeple I was!

What I should have done is consulted you! Because you could have told me in 2003 that prices were so inflated that buying a house -- even one you could afford! -- was folly, and that we would soon be entering the worst housing price deflation since the Depression. See, if they'd have put you on television for us doddering sheeple to listen to, we'd have saved ourselves an AWFUL lot of trouble.

Next time buddy, next time. I don't make a move without tapping into your genius. Believe it!

DedhamStinks,
You're entirely right about the corruption in Dedham. We experienced that personally. It is like everyone here has something on each other.
I'm creating a social network site called CITADEL on Dedham (see dedhamtaxes.ning.com) to address this problem, specifically by exposing Dedham's regulations and taxation in detail..