Behind Greater Boston’s lofty home prices, rising income
This stat in a Globe story yesterday on poverty in Western Massachusetts jumped off the page at me.
The study paints a stark picture of two commonwealths, in which the gap between rich and poor, east and west is growing. For example, the inflation-adjusted median income of affluent families in Greater Boston has grown 54 percent since 1979, to $230,000 from $150,000 a year, largely due to high-paying technology jobs.
This paragraph goes a long way to explain a phenomenon that often stumps both newcomers to the Boston area's high-priced housing market and veterans as well. Given declining population, an epic real estate downturn and national economic troubles, how did housing prices get so high here and why have they been so stubborn coming down?
The emergence of the high-tech and now biotech industries helps explain some of this, bringing in wealthier professionals who have been able to outbid many middle class and blue collar families for aging homes. I would add to that the financial services industry - despite recent setbacks it has also been a wealth importer too.
I don't have the study referenced in the story - I will be calling over to the University of Massachusetts later today to get a copy.
The story itself points to an issue that has been building for years - the gap between falling incomes in Western Massachusetts as factories have folded with rising wealth in Greater Boston.
Housing prices have been following suit. In Cambridge, the epic-center of the tech/biotech boom, the median home price has risen by more than $40,000 over the past year to $757,500, The Warren Group reports. By contrast, in Springfield, home prices have fallen nearly 20 percent over the past year to a median sale price of $111,300, according to the real estate publisher and data firm.
