Back to the good old days of 2000?

It's about time we get back to a real market...and believe it or not, 1998 was probably the last time we were in any realistic market based on what incomes could afford, not what crazy mortgages could afford or what being house-poor could afford.

The bubble in Boston actually began several years before 2000. Furthermore, prices will almost certainly over-correct to levels below "normal" before they bottom (this is how markets work).

A return to prices circa 1997 adjusted for inflation is a no-brainer... A return to 1997 prices in nominal terms (not adjusted for inflation) is probably more like it.

I still say we're headed back to the godd old says of 1997, real estate in Boston is still grossly overvalued as it was in 2000...

What we do in Carmel and Monterey, California (where homes are at least 2X or 3X what they are around here) is to have our Realtors find out for us what the present seller paid for their house and how long they've owned it.

From our searching in Dover, Sherborn, Medfield et al, we still see many Sellers trying to get over 50% more than they paid for their home in the mid-90's or close to 25% more if they bought the home between 2002 and 2007.

We figure that since there doesn't seem to be a flight of millionaires from across the U.S. or from around the world flocking to MA. (as they did from Hong Kong throughout the S.F. Bay area after 1997), together with the recent spike in notices of foreclosure being sent out, then it will pay to see how this unfolds by the end of the year. Without a big drop in unemployment, rising salaries and new, high paying jobs being created, the present situation reminds me of Southern California in the early 1990's, when real estate prices went bust and stayed flat for 6 years.

It's more like 2004 in my neighborhood.

It's funny/scary/sad how fast a decade flies by.

I am so happy that our family was able to buy a great house in a wonderful neighborhood now. We were priced out for so long and now with all of the foreclosures it was perfect for us. I hope everyone can take advantage of these bargains!!! Thank god we were not dumb enough to buy at the top of the market.

Dear Median Home Price,

I'd like to introduce you to Median Household Income. You too obviously need to meet.

The Boston real estate market still has a LOT of correcting to do before THIS first time home buyer will buy.

Best, JJ

I don't see how anyone here can say that home prices are going to revert to what they were in the late 1990's. Given how many people bought during the boom years, that incredible loss of equity would almost certainly bring on Great Depression II.

The government isn't going to let that happen without taking steps to try to stop it.

Please someone please look at the value for any house for massachusett in zillow.com and then tell me if we're back to pre bubble level or not.

I'd like to see a series on how to buy a home, or more importantly, how to buy a home in a strategic manner. All the steps a buyer needs to take and to have their Realtor take on their behalf (if they use a Realtor).

I believe most buyers, first timers especially and even "seasoned" buyers (since they haven't bought a home in quite a long time and the game has changed) are still in the dark. As an example, I ran into buyers at an open house (over $2M) in a Metro-West town several months ago. They wound up buying the home from the listing agent in under 3 weeks, so that agent represented both sides. They only received a 6% discount off of original asking price, in this market, which is slow for over $2M homes. This was a home purchased in the mid-1990's for under $1M! The Listing agent is happy as she received 5% of a nearly $5M sale.

Anyone can see all the mistakes they made - using the Listing Agent and not getting their own representation which resulted in a very bad financial outcome. It must be nice to have money to burn, but to probably pay $1M too much is a little steep.

Great stuff! Affordable housing is so much better than expensive housing. I was an associate at a major law firm with great salary and bonuses and I felt that the prices keep running away and away. No matter what raises I would get the prices would jump at faster rates still. Now I work for the government and, yet, I was able to afford a pretty nice condo. No more bubbles please.

Erica-
People who were in the market for homes and bought prior to the recent plunge in prices were not necesarily "dumb." That's so insulting. You said you didn't buy because you were "priced out," not because you had some kind of amazing ability to see into the future.

G-Man here!

"Unemployment, unemployment, unemployment" is the new mantra of real estate prices.

Do you hear that loud, sucking sound? 'Tis that of mortgages going in to default, sadly, by the unemployed who can no longer pay their mortgages! The resulting foreclosures are being snapped up by bottom-feeders and investors, and this buying is being cheerily reported as "rising home sales."

I'm with Erica! We just bought a nice little house in a beautiful location with great schools. Our monthly mortage/tax/insurance payment is the same as renting an apartment of the same size in Jamaica Plain. No more Boston schools!!!! We paid $90,000 more than the seller did in 1996, but adjusted for inflation (http://data.bls.gov/cgi-bin/cpicalc.pl) it's about 7% more.

I know all real estate is local, but here goes -- houses in my neighborhood (Roslindale) sold for under $200,000 in 1997. These were large, single family Victorians. They've been bought, updated and maintained since then, and the entire community has been improved. Condos (mostly converted from 2- and 3-family rentals) aren't selling for those prices now, let along single families. Anyone waiting for 1997 nominal prices is going to be sitting on the sidelines a long time. Ain't going to happen. In the meantime, (some) people are passing up the first affordable opportunity in a decade. Not a real estate agent -- just being realistic about what I see in the communities near me.

Land and home values in the NE area are still double as much as they're really worth, despite what all the "expert" appraisers think. I'll continue to pocket my hard earned money, rather than dumping 500 grand on a 2 bedroom 1 bath .3 acre lot, POS home in an over-rated neighborhood with over-rated schools.

Do yourself a favor and do not support this economy, do not support real estate, and do not give your hard earned money to a bunch of thieves. Banks will continue to issue subprime McMansion loans out to the degenerates of this country and we will have a repeat of 2008. The bubble is already starting to reinflate, give it a few years, it will explode again, and your hypocrite Obama will do his best to support his friends on Wall Street once again.

John Hung, IME the values shown on Zillow are neither terribly accurate nor up to date.

I also agree with KittyKat. Most homes are owned by people who can afford their mortgages. Those people won't sell for 1997 prices, so if that is what you are waiting for please don't hold your breath.

Chris, maybe you are looking for homes in communities that aren't right for you. There are many communities around MA in which you can buy a nice home (but not a brand new McMansion) for less than $500,000.