Check out this latest study detailing the huge wealth hit families across the country took during the Great Recession.
Median family wealth plunged 38 percent from 2007 to 2010, down to $77,300, according to a new Federal Reserve report.
While three quarters of this plunge can be attributed to the decline in housing prices, median wages dropped 7.7 percent during the same period.
In fact, for middle-income families, the drop in earning power varies even more widely from 7.7 percent all the way up to 13.6 percent.
For the average family, overall wealth has fallen back to early 1990s levels, this Times article notes.
What does this all mean for the real estate market now, struggling to emerge from a years-long slump?
Well there actually could be a silver lining to the big wage and asset declines of the past few years if they help keep real estate prices in check in bubble prone Greater Boston.
Yet while the numbers were not broken out, the Fed study notes that wage declines were the steepest in the South and Midwest, not in the Northeast and West.
The Boston area's cutting edge innovation industries - life sciences and high-tech - continue to import a relatively small but steady stream of highly-paid specialists and executives.
That has helped drive demand, especially as construction of new homes has lagged now for decades inside the 495 beltway.
That said, there are a lot hurting homeowners out there, including right here in Greater Boston. And buyers, with a few exceptions, are certainly not flush, especially if they have one declining asset (home) they have to unload before buying another.
Will this massive overhang of debt and vanished real estate values be enough to prevent another real estate bubble from forming in the Boston area? Probably not, but if it can delay it a few years, that at least would be something.
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