Beantown Bust: Boston Home Sales and Prices January 2011

Recently the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for January showing that single family homes sales declined 32.4% from December but increased 13.1% above the level seen in January 2010 with detached single family median home prices falling 5.2% below the level seen last year.

Condo sales, on the other hand, declined on both a monthly and annual basis dropping 35% from December and 5.2% from January 2010 while median selling prices declined 3.9% below the level seen a year earlier.

The S&P/Case-Shiller (CSI) Boston index indicated that area single family home prices declined 0.14% between November and December 2010 and registering a year-over-year decline of 0.81%, the third consecutive annual decline.

As for condos, the Boston condo CSI indicated area unit values declined 0.75% between November and December 2010 with values showing a year-over-year decline of 1.20%.

Single family home inventory rose 4% over the level seen in January 2010 with the monthly supply sitting at a whopping 11 months while condo inventory declined 5% but showed an even worse 11.1 months of supply.

Single family homes stayed on the market for an average of 143 days while condos stayed an average of 151 days, both values significantly higher than the level seen last year indicating that the sales pace is continuing to slide.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current home price movement.

Beantown Bust: Boston Home Sales and Prices November 2010

Recently the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for November showing that single family homes sales slumped 5.5% on a month-to-month basis from October leaving sales a hideous 31.5% below the level seen in November 2009.

Similarly, condos went flat from October but declined a whopping 38.7% below the level seen in November 2009.

The S&P/Case-Shiller (CSI) Boston index indicated that area single family home prices declined a notable 1.23% between September and October 2010 with values registering a year-over-year decline of 0.23%, the first annual decline in eleven months.

As for condos, the Boston condo CSI indicated area unit values declined 1.00% between September and October 2010 with values showing a slight year-over-year gain of 0.33%.

Obviously the government's sham housing tax gimmick worked to drive sales last year and further, in the absence of this scam, scores of hapless Bostonians have crept back to the sidelines all downhearted, empty pockets... no deposit... no government freebie... no phony baloney house purchase.

Where the trends will go from here should be pretty obvious... back to the weak "organic" trend that preceded the government's malfeasance... subdued home sales and lower prices.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current home price movement.

Crashachusetts: Home Sales and Prices April 2010

It’s been a while… For sake of brevity I have been trying to consolidate all my Mass-related housing posts into one comprehensive post but there is just too much data (condos, singles, RPX, CSI, MAR, etc.) so I’ll just do my best with whatever is the latest data point.

Also, it’s important to note that both the Warren Group and Radar Logic have gone offline as free data services so gone are my Arlington critiques and Boston RPX CSI mashup… such is life.

Today’s Boston Globe headline must read something like “Boston is Back!, Home Sales Leap with Nothing But Clean Sky’s Ahead” as the Mass Association of Realtors (MAR) pump their April sales, price and pending sales data but the fact is, the ridiculous housing trends seen in the Boston metro area for the last year have more to do with the tax gimmick and a false sense of stability than with any fundamental healing of our market.

Home prices are still too high in the Boston metro market and now that the charade of government meddling is largely complete (…though we still need to see higher interest rates and less foreclosure mitigation), we will likely soon find out how fundamental the supposed stabilization truly is.

In any event, the MAR released their April sales and price report showing that sales of single family homes surged 43.8% on a year-over-year basis while condo sales exploded up 63.9% over the same period.

The single family median home price increased 7.3% while the condo median price 6.8% on a year-over-year basis.

As for the Boston area S&P/Case-Shiller data, prices (on a non-seasonally adjusted basis) increased 3.83% on a year-over-year basis in March bringing the peak decline to 17.01% since the fall of 2005.

As it is altogether likely that one of the major unforeseen consequences of the government tax scam will be less future sales, now is the time to really focus on our market to get a sense of which way housing is truly trending.

Crashachusetts Existing Home Sales and Prices: December 2009

Yesterday, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for December showing that single family homes sales jumped 14.6% on a year-over-year basis while condo sales surged 31.7% over the same period.

Single family median home value increased 10.9% on a year-over-year basis to $305,000 while condo median prices increased 10.9% to $255,000.

Again, these results are indicating not only that the government’s ludicrous subsidy of residential real estate (the market, the industry and Realtors) worked to drive a significant number of sales, but that housing fever is still alive and well.

This should come as a truly disappointing blow to anyone who has the audacity to think that a healthy and significant correction in prices is actually a necessary step in the process of healing our distorted and high cost of living area.

What gives the government the right to attempt to create a floor under housing, an asset/service carrying likely the single greatest cost any typical household has to bear?

If market forces would naturally drive down sales and prices making the cost of living more affordable why should government and industry groups like the Realtors interfere?

But, federal meddlers and conniving interested parties don’t think in those terms… they support prices out of a bias in favor of property owners on the upper end, they create and support public housing projects for those on the lower end… and what of those in the middle?... you get to foot the bill one way or another.

So the beat goes on… Buyers snap back to a behavior we all now know caused tremendous distortions and costly excesses, the Feds feel satisfied that they bought enough votes to secure their next election and Realtors line their pockets with commission loot that is now the direct transformation of your tax dollars.

What have we learned from this whole ordeal? … likely nothing.

But in any event, this surge of activity can only run so long… contrary to popular belief, there is not simply an endless supply of sidelined buyers just ready to snap up the next government tax gimmick.

Eventually even these sneaky devices will fail to stimulate the lemmings and the natural market force will show its true character.

Whether Mr. housing market will come out of this distorted period depressed and dejected or spry and agile is anyone’s guess but, given the latest results and the recent extension of the federal governments housing policy, we should be prepared for another season of distorted sales volume.


As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current home price movement.

Key Statistics from the Report:

Single Family results compared to December 2008

• Sales: increased 14.6%
• Median Selling Price: increased 10.9%
• Inventory: declined 14%
• Current Months Supply: 7.2
• Current Days on Market: 125

Condo results compared to December 2008

• Sales: increased 31.7%
• Median Selling Price: increased 10.9%
• Inventory: declined 16%
• Current Months supply: 5.6
• Current Days on Market: 136

Beantown Bust: Boston CSI and RPX December 2008

The S&P/Case-Shiller (CSI) Home Price index together with the Radar Logic (RPX) for Boston represent the most accurate indicators of the true price movement for both single family homes and the entire residential real estate market as a whole (singles, multi and condos).

For December, both the CSI and RPX showed continued weakness with the CSI declining 7.01% on a year-over-year basis while the RPX dropped 19.08% over the same period.

Further, both reports indicate that area home prices have suffered significant peak declines with the Boston CSI showing a decline of 16.11% since the peak set in September 2005 while the Boston RPX shows a 32.44% price decline since its peak of June 2005.

Recently S&P introduced a new line of data series that specifically track condominium prices in five select markets including Boston which showed that in December Boston condo prices declined 6.13% on a year-over-year basis and 13.77% on a peak decline basis (see chart below).

In all likelihood the dramatic declines to consumer confidence and increases in unemployment will work to place significant downward pressure on property prices for the foreseeable future.

As you can see from the chart below (click for larger), although the RPX captures a greater degree of seasonality, both series are very strongly correlated.

The December results confirm that the typical seasonal pattern is firmly in place as all indices head lower on a downward trend that generally bottoms in mid-winter.


To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the normalized price movement, annual and peak percentage changes to the Boston CSI home price index from the 80s-90s housing bust to today’s bust.



The “normalized” chart compares the normalized Boston price index from the peak of the 80s-90s bust to the peak of today’s bust.

Notice that during the 80s-90s bust prices took roughly 46 months (3.8 years) to bottom out.

The “annual” chart compares the percentage change, on a year-over-year basis, to the Boston CSI from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines”.

The “peak” chart compares the percentage change, comparing monthly Boston index values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

The final chart shows that the Boston housing market has been, in a sense, declining steadily since early 2001 when annual home price appreciation peaked and the intensity of the housing expansion began to wane (click on following chart for larger version).

It appears that that the main thrust of the housing expansion occurred “in-line” with the wider economic expansion that was fueled primarily by the dot-com bubble and that since the dot-com bust, the housing market has never been quite the same.

The Arlington Artifice: November 2008

This recurring monthly post tracks the latest results of the housing market seen in Arlington Massachusetts.

I choose Arlington as a result of the Boston Globe’s recently published and absurdly anecdotal and ludicrous farce about the town’s “hot” housing market.

The ridiculous tone and outright mishandling of the housing data by the Boston Globe “reporter” would almost be comical if it weren’t for the fact that the Globe’s editor, Martin Baron, ALSO blundered seriously when he responded to my email about the discrepancies.

Baron attempted to justify the articles contents and in so doing, he disclosed his disgracefully poor and obviously unsophisticated abilities with even the most basic economic data.
The November results again confirm that Arlington is by no means a “stand out” amongst its neighboring towns as Baron suggested in his email and, in fact, is following along on a path wholly consistent with the trend seen in the county, state, region and nation.

Why would an editor of a nationally recognized newspaper think that a single town would continue to function as an isolated bubble amongst a backdrop of the most significant nationwide housing recession since the Great Depression?

As I have shown in my prior posts, this data when charted and compared to other towns in the region proves there are absolutely no grounds to call Arlington’s market exceptional.

The most notable feature of the recent results is unquestionably the low number of home sales with only 231 sales for the entire year to date, the lowest readings since the recessionary period of 1990.

Another important point to remember is that when sales decline dramatically the median selling price can jump wildly up or down since the small number of sales provides a small set with which to determine the “middle” selling price.

The following chart (click for much larger version) shows a history of Arlington’s November median sales price since 1988 along with the annual outcome.

Regular readers will notice that the “year-to-date” median selling price, a more accurate median indicator, has declined significantly from where it stood earlier in the year as the number of home sales have slowly accumulated and now stands at $475,000.

My expectation, now that we are in the weakest season for home sales, is for the median selling price to slide well below $470,000 by the end of the year.

The next chart (click for much larger version) shows that annual home sales in Arlington have fluctuated in a range between 233 and 381 over the last 21 years with the peak selling year being 1998.

This is not such a surprising result for those that have observed Arlington’s real estate market over the last two decades.

Arlington experienced tremendous growth during the 90s internet boom as young families sought its desirable location and outstanding (presumed…) school system.

Now though, it looks as though Arlington is, more or less, a perfect representation of a town struggling with our secular bear market economy.

Its housing market has essentially been eroding since the peak of the internet economy and not even the unusual conditions of the housing bubble could bring back the outstanding growth experienced during that era.

In recent years, Arlington has found itself falling behind with state cutbacks and lower property tax revenues leading to public funding stress and particularly the postponement of the much needed renovation of two dilapidated schools.

Further, the MCAS scores (a much followed measure of academic achievement of lack thereof) of some of the towns elementary schools have been in decline for multiple years with at least one Arlington school being designated for the development of a “year 1 improvement plan” by the state department of education.

With the economy headed into likely its worst recessionary years of the post-WWII period, it will be interesting to watch how this firmly middle class suburban town copes.

The final chart shows how the year-to-date median sales price and combined sale count for Arlington, Bedford, Belmont, Cambridge and Lexington have changed since 1988.

Notice again that as sales have mounted for the year, the median values are looking generally flat to trending down.

My expectation is that all the towns except for Cambridge (which will likely be flat to modestly up on record low number of single family sales) will have lower medians than 2007.

In review, the data shows that there is nothing exceptional about Arlington’s housing market proving clearly that the claims made in the Boston Globe article and later endorsed by its editor Martin Baron were entirely erroneous.

Beantown Bust: Boston CSI and RPX October 2008

The S&P/Case-Shiller (CSI) Home Price index together with the Radar Logic (RPX) for Boston represent the most accurate indicators of the true price movement for both single family homes and the entire residential real estate market as a whole (singles, multi and condos).

For October, both the Boston CSI and RPX showed continued weakness with the CSI declining 6.0% on a year-over-year basis while the RPX dropped 14.77% over the same period.

Further, both reports indicate that area home prices have suffered significant peak declines with the Boston CSI showing a decline of 12.76% since the peak set in September 2005 while the Boston RPX shows a 25.12% price decline since its peak of June 2005.

Recently S&P introduced a new line of data series that specifically track condominium prices in five select markets including Boston which showed that in October Boston condo prices declined 3.61% on a year-over-year basis (see chart below).

It’s important to note that all measures are derived from sales data transacted in October (actually an average of prior three months ending in October) which generally includes many properties that went under agreement between August and September, well in advance of the historic stock market collapse and wider macroeconomic declines that have since sent consumer sentiment to all time lows.

In all likelihood the dramatic declines to consumer confidence and increases in unemployment will work to place significant downward pressure on property prices for the foreseeable future.
As you can see from the chart below (click for larger), although the RPX captures a greater degree of seasonality, both series are very strongly correlated.

Also, note that the although the RPX initially gave a strong indication that this year’s seasonal uptick in prices had abated with the July release, the August release brought a boost in prices and continued the pattern that is more or less typical when compared to the last three years.

Now, the October results confirms that the typical seasonal pattern is firmly in place as all indices head lower on a downward trend that generally bottoms in mid-winter.


To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the normalized price movement, annual and peak percentage changes to the Boston CSI home price index from the 80s-90s housing bust to today’s bust.



The “normalized” chart compares the normalized Boston price index from the peak of the 80s-90s bust to the peak of today’s bust.

Notice that during the 80s-90s bust prices took roughly 46 months (3.8 years) to bottom out.

The “annual” chart compares the percentage change, on a year-over-year basis, to the Boston CSI from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines”.

The “peak” chart compares the percentage change, comparing monthly Boston index values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

The final chart shows that the Boston housing market has been, in a sense, declining steadily since early 2001 when annual home price appreciation peaked and the intensity of the housing expansion began to wane (click on following chart for larger version).

It appears that that the main thrust of the housing expansion occurred “in-line” with the wider economic expansion that was fueled primarily by the dot-com bubble and that since the dot-com bust, the housing market has never been quite the same.

Collapsedachusetts Existing Home Sales Preview: November 2008

Sources inside the Massachusetts Association of Realtors (MAR) report that this tomorrow's monthly existing home sales results will show that November’s single family home sales completely collapsed dropping 21.8% on a year-over-year basis while condo sales crumpled a staggering 27.3% over the same period firmly indicating that a new and dramatic leg of the housing downturn has commenced.

Further, the single family median home value declined a whopping 14.2% on a year-over-year basis to $283,000 while condo median prices dropped 9.1% to $250,000.

Clearly, the impact of the recent stock market crash and ongoing economic crisis is bearing down on both consumer sentiment and, more fundamentally, credit availability resulting in a significant pullback in spending on homes and other costly purchases.

It’s perfectly clear now that home sellers who choose to wait out the “down market” did so in vain as the 2008 selling season draws to a close likely the last opportunity to sell a residential property at anywhere near the prices set in the peak boom years.

With confidence depressed and eroding, economic conditions weakening, credit standards tightening and sales volumes crumbling, Boston area home prices have nowhere left to go but down.

It’s also important to note that the November’s single family home sales count was the lowest November count on record since 1991 and at 2339 units sold was 43.63% below the record November peak set in November 1998.

The following charts (click for larger) show the decline in single family home sales since 2005.

Notice that November 2008 registered a home sales count well below the 2007 level as well as indicating that the December’s results may very well drop below 2000 units, a significant decline.

Beantown Bust: Boston CSI and RPX September 2008

The S&P/Case-Shiller (CSI) Home Price index together with the Radar Logic (RPX) for Boston represent the most accurate indicators of the true price movement for both single family homes and the entire residential real estate market as a whole (singles, multi and condos).

For September, both the CSI and RPX showed continued weakness with the CSI declining 5.71% on a year-over-year basis while the RPX dropped 10.68% over the same period.

This month S&P introduced a new line of data series that specifically track condominium prices in five select markets including Boston which showed that in September Boston condo prices declined 2.90% on a year-over-year basis (see chart below).

It’s important to note that all measures are derived from sales data transacted in September which generally includes properties that under agreement in August and September, well in advance of the historic stock market collapse and wider macroeconomic declines that have since sent consumer sentiment to all time lows.

In all likelihood the dramatic declines to consumer confidence and increases in unemployment will work to place significant downward pressure on property prices for the foreseeable future.

As you can see from the chart below (click for larger), although the RPX captures a greater degree of seasonality, both series are very strongly correlated.

Also, note that the although the RPX initially gave a strong indication that this year’s seasonal uptick in prices had abated with the July release, the August release brought a boost in prices and continued the pattern that is more or less typical when compared to the last three years.

Now, the September results confirms that the typical seasonal pattern is firmly in place as all indices head lower on a downward trend that generally bottoms in mid-winter.


To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the normalized price movement, annual and peak percentage changes to the Boston CSI home price index from the 80s-90s housing bust to today’s bust.



The “normalized” chart compares the normalized Boston price index from the peak of the 80s-90s bust to the peak of today’s bust.

Notice that during the 80s-90s bust prices took roughly 46 months (3.8 years) to bottom out.

The “annual” chart compares the percentage change, on a year-over-year basis, to the Boston CSI from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines”.

The “peak” chart compares the percentage change, comparing monthly Boston index values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

The final chart shows that the Boston housing market has been, in a sense, declining steadily since early 2001 when annual home price appreciation peaked and the intensity of the housing expansion began to wane (click on following chart for larger version).

It appears that that the main thrust of the housing expansion occurred “in-line” with the wider economic expansion that was fueled primarily by the dot-com bubble and that since the dot-com bust, the housing market has never been quite the same.

The Arlington Artifice: September 2008

This recurring monthly post tracks the latest results of the housing market seen in Arlington Massachusetts.

I choose Arlington as a result of the Boston Globe’s recently published and absurdly anecdotal and ludicrous farce about the town’s “hot” housing market.

The ridiculous tone and outright mishandling of the housing data by the Boston Globe “reporter” would almost be comical if it weren’t for the fact that the Globe’s editor, Martin Baron, ALSO blundered seriously when he responded to my email about the discrepancies.

Baron attempted to justify the articles contents and in so doing, he disclosed his disgracefully poor and obviously unsophisticated abilities with even the most basic economic data.

The September results again confirm that Arlington is by no means a “stand out” amongst its neighboring towns as Baron suggested in his email and, in fact, is following along on a path wholly consistent with the trend seen in the county, state, region and nation.

Why would an editor of a nationally recognized newspaper think that a single town would continue to function as an isolated bubble amongst a backdrop of the most significant nationwide housing recession since the Great Depression?

As I have shown in my prior posts, this data when charted and compared to other towns in the region proves there are absolutely no grounds to call Arlington’s market exceptional.

The most notable feature of the recent results is unquestionably the low number of home sales with only 206 sales for the entire year to date, the lowest readings since the recessionary period of 1991.

Another important point to remember is that when sales decline dramatically the median selling price can jump wildly up or down since the small number of sales provides a small set with which to determine the “middle” selling price.

The following chart (click for much larger version) shows a history of Arlington’s July median sales price since 1988 along with the annual outcome.

Regular readers will notice that the “year-to-date” median selling price, a more accurate median indicator, has either declined or remained flat through the typically strong spring and summer selling season as the number of home sales have slowly accumulated and now stands at $478,000.

My expectation, now that we are in the weakest season for home sales, is for the median selling price to slide well below $470,000 by the end of the year.

The next chart (click for much larger version) shows that home sales in Arlington have been essentially flat during the last 15 years, a result that is generally to be expected when looking only at the sales of one town in isolation. That being said though, Arlington has seen only 206 home sales this year, the lowest result on record since 1991.

The final chart shows how the year-to-date median sales price and combined sale count for Arlington, Bedford, Belmont, Cambridge and Lexington have changed since 1988. Notice again that because of the low sales count the current median price data is very volatile jumping radically up or down for each of town.

In review, the data shows that there is nothing exceptional about Arlington’s housing market proving clearly that the claims made in the Boston Globe article and later endorsed by its editor Martin Baron were entirely erroneous.

Beantown Bust: Boston CSI and RPX August 2008

The S&P/Case-Shiller (CSI) Home Price index together with the Radar Logic (RPX) for Boston represent the most accurate indicators of the true price movement for both single family homes and the entire residential real estate market as a whole (singles, multi and condos).

For August, both the CSI and RPX showed continued weakness with the CSI declining 4.74% on a year-over-year basis while the RPX dropped 8.56% over the same period.

It’s important to note that both measures are derived from sales data transacted in August which generally includes properties that under agreement in June and July, well in advance of the historic stock market and wider macroeconomic declines.

In all likelihood the dramatic declines to consumer confidence and increases in unemployment will work to place significant downward pressure on home prices.

As you can see from the chart below (click for larger), although the RPX captures a greater degree of seasonality, both series are very strongly correlated.

Also, note that the although the RPX initially gave a strong indication that this year’s seasonal uptick in prices had abated with the July release, the August release brought a boost in prices and continued the pattern that is more or less typical when compared to the last three years.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the normalized price movement, annual and peak percentage changes to the Boston CSI home price index from the 80s-90s housing bust to today’s bust (ultra-hat tip to the great Massachusetts Housing Blog for the concept).



The “normalized” chart compares the normalized Boston price index from the peak of the 80s-90s bust to the peak of today’s bust.

Notice that during the 80s-90s bust prices took roughly 46 months (3.8 years) to bottom out.
The “annual” chart compares the percentage change, on a year-over-year basis, to the Boston CSI from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines”.
The “peak” chart compares the percentage change, comparing monthly Boston index values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

The final chart shows that the Boston housing market has been, in a sense, declining steadily since early 2001 when annual home price appreciation peaked and the intensity of the housing expansion began to wane (click on following chart for larger version).

It appears that that the main thrust of the housing expansion occurred “in-line” with the wider economic expansion that was fueled primarily by the dot-com bubble and that since the dot-com bust, the housing market has never been quite the same.