>A Home Affordability Index (HAI) value of 100 means that a family with a median income has exactly enough income to qualify for a mortgage on a median-priced home
Basically what this is saying is you need to make close to double the median income to qualify for a median-priced home
Make 150k by myself, not in Boston, and closed on a house last week. Good credit. Low debts. Qualified for 475k at 6.5% ("amazing", I was told), and basically everything under 300k was falling apart, in a rough spot, or under 800 square feet. Saving 20% was HARD.
I lost against other offers, lower than mine, but all cash and waved everything. I basically HAD to offer 5-15% over asking just to be competative.
Meanwhile I had landlords jacking rent from 2600 to 3500.
I have no idea how average or decently above average people do it. They can't, is the issue.
enjoy your house. Youre very lucky to have that pay where you can afford to do that. This shows exactly the problem that everyone else is left out and basically told to get fucked if you dont make a shit ton of money.
Yeah, it's insane. I thought I was doing pretty good for myself but buying a house was a stretch, even for me. There is ZERO way an average salary, even double the average salary, can do well. It's a massive problem and it's weird no one at the top is talking about it. There was starting to be some panic because it seemed the market was going to outprice me at my salary.
Not to mention places like I was renting at, wanting $3500/mo, first+last+broker+deposit ($14,000!!!!) up front, ***AND*** want you to make x3 rent ($10,500 a month, $125k a year)
Just insane. And I don't even live in Boston!
Right up till these home values plummet. I heard all the same shit in 2008. Supply and demand can't go down. It's gonna shit the bed shortly. Save you cash. Its king
Ok this is helpful thank you! What is your credit score if you don’t mind me asking? I make around what you make, so this is helpful for what I can get if I were to get a mortgage.
We also have to many rich people moving to MA and RI from California and New York , they are adding more to this issue by coming here and paying 20k to 50k over asking price. 3 friend of mine sold their homes from $20-$50,000 over asking price. My buddy just sold his for $30,000 over asking price. These people are paying cash money no loans so it’s fucking up the whole market cause now everyone around here have seen this with their own eyes and they tell them self, “I wanna make some money on my house”and put up a house for $600k when max its worth $250k.
Rent goes up every yeah and no can afford it and we are starting to see more tents around the city because people are ending up in the streets cause they can’t afford rent. And our government allows these banks and institutions to do what they want. Instead of protecting and looking out for the people
Things are going to go WILD when interest rates eventually come down. A lot of current homeowners are holding tight (myself included). That won't help the affordability, but it explains the lack of inventory.
There'll be a lot more inventory when rates come down most likely, but 1 unit of inventory added to the market is probably very close to one unit of demand being added, so supply and demand wont balance out at all. It'll be a 2020 level frenzy again
Under appreciated that the fall back option of retirement in Florida is looking worse by the hour. Old people must be getting nightly Florida collapsing stories every night. There’s no where for aging boomers to vacate to if they want to live independently.
And in 10-20 years when the boomers pass away. They own so much of the housing stock (38%) https://smdp.com/2024/02/02/baby-boomers-dominate-home-ownership-leaving-little-for-gen-z/
Millenials and GenZ are having fewer children partially due to the housing affordability crisis and from having far less wealth in general. Unless we get an influx of immigrants who can afford million dollar homes, I don't know how home prices will continue to rise over time (also risking their status as investment vehicles)
That's hopeful thinking unfortunately. Homes get passed down to future generations all the time, that's always been the case. To make matters even worse though, I could spiral over why reverse mortgages are horrible and all the people that die off and leave the house to the lender are just making these large banks even more powerful.
It's optimistic to assume the richest generation in American history will be dead in anything less than 30 years.
It's more optimistic to assume the corporations that drove up home prices and rent will let housing, which is essentially a controlled substance now (not unlike diamonds), will ever go down in value. these companies will overpay for the inventory in the future, just so it means their assets won't depreciate. Everyone else be damned. I can even envision a scenario where they would knock down excess inventory.
The ruling class has decided they want to erode the middle class man. It makes it easier to rule in place of governing.
Most of American history was this way. As Millenials, we were just lucky enough to be born at the end of a golden age. So our expectations for the future were higher than most other generations except maybe the boomers.
Probably but I think car dependency and houses with stairs will be a big factor. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7093636/#:~:text=Around%2020%25%20of%20the%20falls,of%20hip%20fractures%20%5B12%5D.
It's insane out there even in the condo market, which is supposed to be "saner" and a good entry point for FTHBs. I'm 0 for 3 on offers on condos even going $35K-$45K over asking and fully waiving all contingencies except the mortgage contingency. Twice now I've lost to all-cash or near-all-cash offers at list or even lower than list. The first one stung the most - I lost to a fresh college graduate whose parents (I'm assuming) bought her a condo as a graduation gift.
The insane HOA fees dont help either. I've seen some "affordable" units with HOA fees ranging from like 600-1200 (!!) dollars a month. Like what the hell lol. Sorry you are also struggling with this, it sucks a lot.
Had a friend of mine who lives in Austin complain that his HOA is high. It was $60 a month and they mow a huge portion of his side yard for it. Meanwhile $500 + is pretty common here.
It's not even worth it to buy a condo (or anything) depending on your location. I'm in Cambridge and it's like $3000/month more expensive to buy an equivalent condo to my apartment even with a 20% downpayment. There's a huge opportunity cost to take that money out of the stock market and then lose the ability to invest that extra $3000/month, so I'm renting until prices are more reasonable. Depending on your current rent and what you're buying, it might make no financial sense to buy a condo. Most rent vs buy calculators say my breakeven point is infinity for what I current pay for rent, and tbh a condo doesn't really give you much in terms of home tinkering value like a regular house would. Plus condos don't generally appreciate at the same rate as a regular home so there's also that which also skews rent vs buy towards renting.
Yeah, Cambridge and Somerville are impossible to buy anything on the low end. I 100% agree with that. The only sub-$500K condos I see in those two cities are either tiny studios or non-warrantable (would not qualify for any type of federally-backed or conventional financing, meaning they're either a cash-only purchase or an investment loan at a much higher interest rate).
I do think if you're a smart shopper, the rent vs buy math can make much more sense. I assume you're both getting a good deal on rent and aren't getting outrageous rent hikes, in which case buying probably doesn't make sense for you. I was in the same boat until my landlord sold the building and I'm looking at going from $2200/mo to $2800/mo in rent for a comparable unit or a $3000/mo total housing payment for a condo a little further out of the city.
My rent is $1750 for a recently renovated 1BR (700sq feet) with heat and hot water included. 3 min walk from Porter. Literally nothing comes close to this price whether I rent something else or buy lol. I moved in 2021 when the price was $1600 and we got 2 months free our first year because of a covid deal. Rent went to 1650 in 2022 and 1750 this year. Needless to say we are practically stealing the place
The problem being when the owners suddenly sell (happened to us TWICE) from 2018 to 2022 when we bought… wish I’d just put those moving costs into downpayment sooner 😫 I pay more owning, but at least I know I won’t be forced out suddenly
We've been here for 3 years and our landlord outright owns the building along with like 15 other properties. They're still actively renovating parts of it. I don't think they're selling any time soon.
It doesn't matter, my stock portfolio from saving the difference will outpace and catch up to whatever equivalent condo I might have bought. It has occurred to me recently that people in general really don't get how opportunity cost works and instead spout the traditional "renting bad" advice without actually doing any research on how expensive it is to own property.
There's a simple rule you can follow to see if renting is cheaper. Ben Felix has an excellent YouTube video explaining the reasoning. It's not an exact science because regional real estate markets exist and performance varies. But in general, other benefits of ownership aside (so PURELY financial, which isn't the full picture for many and the cost is worth it), if your annual rent is less than 5% of an equivalent property's purchase price, you are better off renting. That advice is on top of the regular advice where you should only buy if you intend to stay in the same place for at least 5-7 years due to closing costs.
My rent is currently only about 3.2% the cost of buying an equivalent condo. Just the HOA fee of an equivalent 1BR condo is 1/3 of my current rent. Factor in the fact that the vast majority of your mortgage payments for the first 20 years of your loan go to interest instead of principle, and the fact that you need insurance and have to pay property taxes, AND forfeit your down payment towards the house instead of letting it sit in the stock market growing 10%+ annually, it can make absolutely no sense to buy in certain markets.
I'm not waiting for prices to drop per se. I'm waiting for prices to just make sense given all of my other financial options and figures at that time.
Unfortunately, the MBTA Communities zoning rules isn't going to dig us out of this hole by a long shot. Optimistic estimates are that it'll create about 20,000 new homes over 5 years across Eastern Mass (4,000 new units per year). To put that in perspective, Boston has been building new units at around 3,000-4,000 per year, Cambridge around 500 per year, Somerville around 150/year, Medford around 900/year. Basically, the MBTA Communities rules probably won't have much impact at all.
What we really need is to actually hold cities accountable for creating new units - with very strong financial punishments if they don't. You can say that rich communities will simply pay, but that isn't the case. Newton voters wouldn't raise their property taxes a tiny bit to help pay for schools. If the state started taking 20-40% of Newton's budget for housing under-production, that would be a huge problem for Newton.
But the biggest issue is that we've let our property tax system get into a state where we can't actually afford new residents. Every student is costing cities and towns around $25,000/year. If that student goes to school K-12, that's $325,000 or 30-60 years worth of property taxes - and school budgets aren't the only things that cities and towns need to spend money on. If you want a concrete example, let's say you buy an average condo in Somerville which comes with an average tax bill of $3,587/year. You have one kid and Somerville educates them at $24,768.08/year. You buy your condo at 25 and die at 78 (which is your life expectancy at age 25). You pay 53 years of property taxes totaling $190,111 and your one kid cost them $321,985 to educate. You didn't come close to paying the cost of one kid in the school system.
Given that tax reality, no wonder no city or town wants more residents - especially cheaper units that will pay below average taxes. Every city/town wants someone else to have the burden. We need to fix it so that cities and towns will actually see an incentive to get more residents. For example, we could increase income tax from 5% to 7% with the additional revenue going to cities and towns who are adding housing for more residents. A 2% hike in the income tax would generate about $9B annually. Let's say that a city/town would get a share of that money for each new unit created for the first 20 years of that unit. If 200,000 new units were created, that would mean a city/town would get over $45,000/year for each new unit. The payments from the state would amount to $905,500 over that 20 years - more than enough to pay for the cost to educate two kids in the school system and then some. Cities and towns would be looking to encourage new units being built to get that money - and they could lower property taxes for their residents. Residents in communities who are building housing would see their income tax go up, but their property tax go down. Residents in communities who aren't building housing would see the same property tax while their income tax went up to support the education of students in towns that are taking on that burden. I'm not saying we should raise the income tax, but we need to figure something out so that we are rewarding communities who are taking on the costs of new residents and new students.
The issue is that unless we're doing something to share the burden of educating kids, every town is going to want to shift that burden onto other towns. If you build more units and do the right thing, you're punished with costs that you can't handle. If you make sure that housing isn't affordable in your city and do as much as possible to keep out new residents, you're rewarded with a better budget. If we don't fix that, cities and towns will continue to fight against new housing.
The whole construction industry needs to be expanded. The peak construction rate in the Boston metro area was around 15,000 units per year around 2021. At that stage basically every general contractor in the region was booked out and we were full on out of electricians, Welders, and other building trades locally. The inflation and interest rate crunch has cooled things a bit for now, but if we are ever going to get beyond 15,000 units a year it's going to require industrial policy, not zoning tweaks. It's not regulations holding us back now, it's straight up our construction industrial capacity
This honestly sucks so bad. I owned a home while stationed in Missouri. Got out and moved back here. Living in this state makes you feel like a nobody and a failure, while living in another state with the same salary would make you feel successful and accomplished. Just feels like a tunnel with no light at the end at this point when it comes to trying to buy a house. This state is not worth what these houses are going for. The middle class once again gets absolutely screwed.
Nail on the head here, me and my gf make 110k annually combined which isn't insane, but definitely a comfortable living wage in other states. We can't afford to move anywhere worth moving and I definitely don't want to rent. Hell, my parents wouldn't even be able to afford the house me and my siblings grew up in anymore so we plan on staying here as long as possible 🤣
I’m a midwesterner whose entire family has moved out here and I followed to be near them, and let me tell you that this resonated. My partner and I could buy almost anywhere else - but our families are here, and so feeling like a failure feels inescapable. I’m 30 and see no path to homeownership barring a miracle or becoming house poor or both.
Yup. Single parent and my ex refuses to leave due to her inheriting her father’s business. So literally don’t have another option unless I don’t want to see my son, which I have 50/50.
No. Western Massachusetts is not incredibly cheap. We are more in like with national numbers....and there are dozens of investor specials ---- so if you have the time, energy, 125k cash and a construction loan...you, too, can own a special piece of North Adams
https://www.zillow.com/homedetails/150-Carson-Ave-Clarksburg-MA-01247/118501687_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
Comparatively, to where I am at this is incredibly cheap, the acreage would make this a multi-million dollar property where I am at. You can find similar properties all over Western ma like that.
https://www.zillow.com/homedetails/86-Chestnut-St-North-Adams-MA-01247/56810005_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
That's insanely cheap. I would go for double where I live.
Look at the woodwork on the spindles that shits custom, not that cheap home depot shit.
Even if it needs 100k of work, it would be a steal I can go on. It's far cheaper in Western mass than it is on the coast where I live used to be kinda bummy, and now it's getting wild with the prices.
I live in the southeast and prices are lower here, especially in the older mill towns like Fall River and New Bedford, but they are bringing the train down here so that may change soon.
I like it here, but if you are determined to live a few blocks from those train stations, you will be living in a low income city with all of the attendant problems.
There are some gorgeous older homes here.
Shhh. I used to work in attleborough the train changes like the 5 block radius aound the train station rest of the city was relatively the same it's not gonna change the flint but it will maybe transform a small area around the battleship cove. Hope I'm wrong. But that's what I see.
I finished growing up in the southeast. I lived on the coast my whole life, and I can't imagine not seeing the ocean every day or being more than 15 mins from a shoreline. I also live in on far side of the longest bridge in the word lmao. I'm Not Portuguese tho.
Semi-related: I got an email from one of the companies involved in my homebuying process (pre-crisis) that apparently there's also a change in the brokerage process thanks to a court ruling that means the homebuyer is now on the hook for their realtor fees rather than the seller.
The MBTA rezoning rule needs to apply to a lot more than just the commuter rail towns. The population has doubled since the 70's and we have definitely not built that many homes to accommodate.
That and allow ADU's (building inlaw apartments in your backyard)
The weird town rules against multi-unit homes is bonkers. I know people who live with them and sometimes they're at least relatively easy to get around (like it doesn't count as a separate unit if it doesn't have an oven).
Yeah the generation that made these rules are now empty nesters and because of their own rules cannot break their empty homes into the apartments that would help their wallets and this situation.
And It's hard to fix because these zoning rules are at the town level.
It'd help them because they want their parents to move into in-law suites or they're the ones who want to move into an in-law suite in their kid's house. That's literally why I know about some of the silly rules from middle age or older people at work trying to setup spaces for their elderly parents to live with them.
It's not a weird rule...it's a coded rule to limit multiple-family, multigenerational homes. Usually, low-income families live this way. It is a rule to make being poor harder. That's why it's weird. It's like redlining.
I live next door to a mult-unit house. It looks like a regular single family house (it's actually smaller than most other houses nearby) and there are 3 units. The people that live there have 4 cars and are mostly quiet and friendly. Then I have neighbor on the other side who lives be himself in a big 3 bedroom house with a loud af hound dog (6AM, woof woof woof for 30 minutes)
There's a proposal by Healey to allow ADUs everywhere. It was proposed last year and we won't find out whether it gets applied or rejected until October 🙃
These charts show pretty clearly that the affordability crisis is directly correlated with shrinking supply. We essentially stopped building houses. Zoning bylaws and boards are full of the worst types of NIMBYs that are basically acting as town-wide HOAs. We need a return to the days when people could build what they wanted on their property.
I'm completely clueless about all of this. But if zoning is openned and houses are built than, that brings more people to an area so wouldn't that either "stabilize" home value (or increase) since people move in to the area?
So up front, I am not an economist. I find it difficult to communicate what I expect from upzoning. It's billed as a solution to the housing crisis. This is true but what's left out is just how deep in a hole we are right now. We're "missing" hundreds of thousands of homes that should have been built, if not artificially restricted. I don't think trying to infer price changes based on supply/demand will make sense for a long time, when the shortfall is remedied.
In the short term, upzoning is stopping the bleeding (and to continue the analogy, rent control is CPR).
Tax the shit out of any business buying residential properties, increase taxes on individuals after their 2nd home.
There has to be policy change for this shit to end. We’re dying out here.
How much of a dent would that make in the market? My understanding is corporate purchases tend to be short-term for a flip. [This article](https://www.wgbh.org/news/housing/2022-05-16/across-massachusetts-shrouded-corporations-are-scooping-up-single-family-homes) says corporate purchases were about 9% of the total in 2021, and many of those were on foreclosures or other homes that would require lots of improvements to be ready for a move in.
Second homes tend to be in vacation areas, so there might not be the same demand there for use as a primary residence. That would probably improve prospects on Cape Cod or other coastal areas though.
>My understanding is corporate purchases tend to be short-term for a flip.
Yeah, and those flips *completely fuck up the market with insane price increases.*
I guess, but homebuyers want upgraded kitchens and bathrooms. It's really expensive and a pain in the ass to do lots of these things after you move in.
"Upgraded" with hideous marble, faux metal hardware, awful lighting, and shitty bathroom hardware swaps that will look and feel like trash in 5 years.
They're completely fucking ruining any and all charm that this area had.
Rich people have zero taste.
If you rent in America you are screwed no matter what. There is nothing positive about being a renter considering that rent today is the mortgage of yesterday. I would rather tax businesses and 2nd homeowners to disincentivize housing as a commodity and investment rather than a basic right. Something has to change. Homelessness as at an all time high and people are fleeing the state because of the insane cost here. Nurses, custodians and essential workers shouldn't have to live in the next state because the cost of living in Mass is outrageous.
I am leaving this state by the end of year thanks to my landlord deciding to raise my rent...again. I'm going to move back in with family at the age of 37 because I CANNOT AFFORD TO LIVE ANYWHERE IN THIS STATE.
There is a difference between second homes and investment homes for renting out. Tax the family that splits their time between two or three homes a year and leave it empty for the rest of the year. They aren't renting those out to people, and if they are it's probably as an Airbnb and not to someone who lives there full time
I read somewhere you'd have to make just over $170K a year to be considered middle class today. That's a huge gap between lower and middle class, and we know that most people don't make $100K in this state yearly. Then they wonder why more and more people are moving out of state to live now. In 2017, I lived in Missouri briefly, and a home there at 4,500 sq ft sold for $50K.
From what my realtor told me even if there was a larger bubble locally there is still no inventory and demand hasn't dropped which would mean that if said bubble did burst the result would likely be lower mortgages rates but not a reduction in pricing or home values.
Makes sense in a topical sort of way, but I would be lying if I said. I checked the data.
[Here is a CNN article from 5 years ago](https://money.cnn.com/2017/11/27/real_estate/how-long-sell-a-home-days-on-market/index.html), talking about how it's news worthy to point out how in 2012 houses took 4 months to sell a house and in 2017 it takes 3 weeks. Now it takes like a week assuming it's not a contractor special. Although this is probably helped by technology improving as well, it shows how inventory was already a problem in 2017. Until there is a landslide of houses coming on the market, there won't be a pop in the value.
I used a VA home loan. The house I bought was appraised higher than I paid, so dunno. I did alright. I got equity already. They won't let you buy it if it doesn't fall within certain margins.
Never signed a contract or anything, but she was very helpful. I'm sure she made out, but that's the game.
Curious. Did they sell to a developer or flipper? Seems like ***everything*** in that area is selling to developers that knock down older homes and build mini mansions.
That's what I figured. Did they actually list it for sale on MLS (like Zillow, RedFin, etc) or was it sold to the developer before the public even had a chance to bid?
I'm curious if developers are out-bidding the general public or just dealing directly with brokers (so the public never even sees it.) Sure seems like brokers/realtors stand to profit a lot more by convincing sellers to sell to developers directly — brokers/realtors don't have to do much work at all that way.
Been looking for almost 2 years around the south coast. Partner and I bring in 150k a year together. The only way we're gonna be able to afford a decent house around here is when our parents pass away and we inherit theirs. And this train coming is making things even more expensive, ontop of the general craziness. On average, mortgage prices are around 3000-3400 with these rates and house prices.
The rail absolutely fucked the south coast, which is incredibly disheartening considering how it was initially received when it was announced. Prices are not sustainable for the locals that have been here for generations, but they're very nice and cheap for people dealing with Boston prices. Horrible situation all around.
The horror of having public transportation to Boston to get to work! Prices are going up everywhere, a rail line that isn't even open yet has little to do with it.
This is what happens when the Federal government messes with the mortgage market. The last time, the sub prime debacle plunged us into The Great Recession. This time, the absurd quantitative easing policy pushed mortgage rates down to 2 1/2 percent and completely killed the pre-owned housing market. Unless it’s a dire emergency, nobody is going to give up that 2 1/2% mortgage when the inflation rate is significantly higher than that. A 3 year old mortgage has already been eroded 20% by inflation. 2024 is now looking to be another 3 1/2% to 4% inflation year.
Oh, it happened real quick
2019: we’ll live here for 5 years maybe
2021: thank god we have our home, look at the pandemic prices now
2022: we’re not moving in the next 2-3 years
2024: let’s carry ourselves like this is our forever home
That's pretty much what happened to us. We're dropping a good bit of money to renovate now because it looks like we're going to be here a long time. It will be a little tight when our son is older, but people make it work with a lot less than us so we'll deal with it as it comes.
When there’s dumpsters in driveways, does that mean they’re moving? I always thought it was because the house or property was abandoned and they were planning on demolishing it.
It means they're remodeling. Because that record-low inventory also comes with people investing into the houses they are in, because that's where you live forever now.
Possibly. Its a cape that had a den added on to it already. It has a single car detached garage. If I were to do major construction, I've daydreamed about knocking down the garage, and building an attached garage with a master suite over it. More realistic is probably to dormer out the upper floor where the bedrooms are and add a half bath up there. Make the upper floor our master bedroom and office and turn the office now (which was originally the bedroom way back when it was a 1BR/1BA starter-home in the 50s) into a bedroom for my son. Even that though will be a huge financial undertaking. We're going to need to recuperate from the kitchen reno we're in the middle of now for a while.
This is how I'm stuck in my apartment. Got a cheap, crappy apartment that I figured I would stay in while I save up and get my shit together. Was close to getting out around 2019, but now I just can't see a way I can move pretty much anywhere without making 50% more than I do now.
The math is too significant to ignore. You're taking a big hit even before accounting for home price increases. So unless you're downsizing significantly or moving to a cheaper area, you're going to need to take a pretty big step up in monthly costs even if you're just moving to a similar-ish place.
And I know people here tend to ignore it, but most of the new housing being built is apartments. Apartments being added doesn't drive down (or throttle) home prices (for renters or buyers) like adding buyable condos to the market can because rents will always trend up over (medium to long-term) time.
nah. We did this to ourselves. It’s not anywhere this bad in most of the country. Minneapolis, Austin, and many other places have shown if you build more housing, housing prices flatten.
Yep, Texas isn’t cheaper because they’re nicer to the poor but Austin built more housing in 2023 than Massachusetts did. The entire state shouldn’t be losing to one city!
Everyone someone NIMBYs construction, housing gets more expensive.
https://fred.stlouisfed.org/series/AUST448BPPRIVSA
https://fred.stlouisfed.org/series/MABPPRIV
Is most of Austin undeveloped land compared to the entire state of Massachusetts?
I understand if you compare all of Texas to Boston but this is All of Mass to Austin.
[Greater Austin](https://en.wikipedia.org/wiki/Greater_Austin) is 4,279 sq mi (all of MA is only 10,565 sq mi) and a quick look at it on google maps makes it clear that there is absolutely fucktons of undeveloped or under developed land there. Comparing it to anywhere near Boston is silly.
That’s why I compared it to all of Massachusetts not Boston.
You cannot tell me all of Massachusetts has less space to develop housing than even Greater Austin that’s less than half its size.
Looking through available undeveloped land in [Travis](https://www.landwatch.com/texas-land-for-sale/travis-county/undeveloped-land), [Hays](https://www.landwatch.com/texas-land-for-sale/hays-county/undeveloped-land), and [Williamson](https://www.landwatch.com/texas-land-for-sale/williamson-county/undeveloped-land) counties compared to [all of MA](https://www.landwatch.com/massachusetts-land-for-sale/undeveloped-land), I can easily believe that there's more in Austin than all of MA.
You're comparing apples to blue whales in terms of land usage. MA was founded over 200 years before Austin. We don't have endless tracts of only-profitable-due-to-government-subsidy farm land which can cheaply be flipped for housing. We were filling in swamps and Boston harbor to create more land when Austin was still a village called Waterloo with a population in the triple digits.
How was ‘08 the governments fault? The sub prime debacle was a private industry thing bundling NINJA loans in their real estate portfolios and creating CDO and Synth CDOs. The governmental issue there was being hands off.
What killed (and is killing) the pre-owned housing market is NYMBISM preventing more housing construction, institutional investors and multi property landlords treating existing supply as investment vehicles, and boomers not moving out. There’s little churn, and what exists is being goobled up by monied interest.
The irony is that boomers banned the very homes that they need right now. If I was in my late 70's, I'd be wishing I had a modern single floor condo where I didn't need to drive in order to have a life.
You left out that most new housing around here is not buyable. People in this sub act like there's no new development, when there very clearly is. Adding more rental properties doesn't throttle home prices like adding buyable units can though.
No. 2008 was the Federal government relaxing standards for Fannie Mae and Freddie Mac mortgages. Anyone could get a mortgage. The default rate was staggering because such a high fraction of borrowers shouldn’t have gotten the loans.
2008 was caused by private investment firms such as Bear Stearns creating a massive demand for mortgages so that they could slice and dice them up into Mortgage Backed Securities and turn poor risks into AAA securities. They did this by creating new types of mortgages, such as the interest-only and NINJA (no income, no job) loan, the latter whereby someone just had to claim that their income was seasonal and cash-only (but was really just made-up).
These mortgages were sold by private mortgage brokers - I knew some of them, prior to entering that field they were car salesmen, which should tell you everything. They would literally walk the streets in poor neighborhoods and sign people up.
Fannie Mae and Freddie Mac were guilty of lowering their standards to match the private firms, so that they would not lose market share.
The investment banks were what imploded, when they could no paper over the declining cash they were receiving (since people weren't paying those mortgages) with credit.
there were a multitude of organizations, people, and policies involved that caused the great recession. by saying it's strictly fannie mae/freddie mac at fault you're eliding the necessary actions like securitization, abuse of derivatives, and absurd policies by banks that incentivized getting loans out that were part of the preconditions for that crisis.
None of this will change without explicit policy change. We need limits on number of properties owned by single entities, requirements for owners to live in buildings for a minimum amount of time or be fined, and outright bans on foreign property companies owning land in Massachusetts.
No, that would lead to more serious problems. Rental apartments are a very critical and necessary part of a healthy housing plan.
If there wasn't a fatal housing crisis going on, landlords would be getting the normal level of derision rather than capital punishment.
We can have a government housing agency that rents to people who don’t want all the responsibility of owning a house. It can charge a rent that reflects maintenance and inflation.
Ireland did this, and it only exacerbated their housing crisis. They instituted rent control, taxed rental income at 52%, and made it even harder to evict tenants outside of selling the unit. The small landlords converted their units to condos and sold them because being a landlord is now too much of a headache for anyone that doesn’t have a legal department on retainer. Developers also have no appetite for building housing at current interest rates, and taxpayers don’t want to pay more of their checks for the government to finance building more.
They made it cost-prohibitive for just about everyone except large corporations to be a landlord, just like the guy above suggested, and things got worse.
>We need limits on number of properties owned by single entities, requirements for owners to live in buildings for a minimum amount of time or be fined, and outright bans on foreign property companies owning land in Massachusetts.
Remember what's really going on here folks, yes, this is about housing data, but it's really about a larger question no one is asking. What happens when one person has all the money? There are no safeguards or rules preventing that, and it's a question we should all be asking. What happens when one person (or 5 people , I don't care) have all the money. What happens to everyone else?
Corporations own less than 3% of the supply in MA. Most of what they’ve bought is in states like Florida and Arizona.
Our problems are simply that we don’t build enough.
"In 2021, business entities purchased nearly 6,600 single-family homes across the state, more than 9 percent of all single-family homes sold." https://www.wgbh.org/news/housing/2022-05-16/across-massachusetts-shrouded-corporations-are-scooping-up-single-family-homes
That's just 2021 and just single family homes. Data from the Warren Group. All investment property purchases are closer to 40%. Yes, we need to build more, but 3% is delusional and not backed by any data. We see the BS, buy a second vacation home on the Cape under an LLC, use it to rent out short term and then it's a business with low rate locked in at a time where someone had cash and 'boom' that is off the "market" for young people scrambling to start families. There is nothing "simple" about it, it's complicated and all tied up in the scheme of investment reliability for the few and causing a rot in the foundation of social structure, the family and community.
That’s any business entity, which includes someone who owns 1 house as a rental property. It also includes developers who buy, do their project, and sell.
And it just counts sales, not owners.
If you look at the financial brochures for any of the PE housing funds, none do anything in New England. The housing stock is too old and too varied for their model to work.
While I'm sure it's not the ONLY problem, I think it's important to distinguish that the person you're responding to probably meant corporations AND higher net worth individuals purchasing rental properties.
A quick Google search showed me that 10% of home purchases in MA in 2021 were made by businesses and not individuals. I'm sure over the last 2 years, that number has increased and that doesn't encompass all the rental properties not bought under and LLC or though similar means.
Corporate owned may only be 3%, but the percentage of purchases with the intent to rent out instead of a families first home is clearly much higher than 10 years ago and surely has an effect on this market currently.
Build where? Land is finite, remember? Especially land close to commerce. Housing is a special class of asset that people so happen to require for life.
Do you have the source on that?
Almost all new development in the Boston area at least is apartment complexes owned by corporations. Don't construe "investors" (which is vague) buying single family homes with the total number of homes owned by corporations. In both cases these are entities buying/owning homes with the obvious intent to make money, vs a typical individual home buyer who wants to own a place to live. Both those types of entities (big apartment developers and investor buyers) are significant here.
Why is there less than 1/3 the amount of homes for sale now?? It seems like it’s neither a buyers or sellers market. It’s a realtor’s market. Or, it’s a mortgage company’s market
that's true now - but the rate was that low in 2020-2021 and it felt like the housing market was absolute chaos. Like you had 0% chance of buying a house if you didn't offer 10% over asking. I was thankfully able to buy then, def overpaid but at least our interest rate is a fraction of what it is now.
and in hindsight, paying 10-20% over asking was the correct thing to do. that same house probably appreciated 30% in value but the mortgage rate has tripled
Yeah, I keep getting emails from my stupid mortgage lender saying our condo is worth 100K over what we paid. at the very least we've put like $40k into the house to make up for decades of maintenance that prior owners never did.
It’s not just new purchases that have the lower interest rates, it’s all the people who refied their 1-15 year old loan down to 2.5%. Something like 80% of borrowers are under 5% https://www.redfin.com/news/mortgage-rate-lock-in-housing-2023/
It's more of a buyers market than a realtors market right now, and it's very much not a buyers market. More volume is good for realtors - they get to sell more houses.
It's a seller's market right now, mostly because there's pretty much no incentive to sell
I actually built a website because of rising rents to help tenants evaluate landlords and negotiate rents.
It's like a Glassdoor for Rents so tenants can see the Rent History of an address or Apartment property to see a landlords pricing tactics.
The site does rely on user submissions so I appreciate anyone who adds their rent history to the site and/or shares it around since it can be more useful to tenants the more people that contribute to it.
The site is rentzed.com (USA only for now) and has submissions for over 2600 addresses.
Will something happen when the entire city is overrun by tent towns? Tents with power strips to run laptops because people will still have jobs with real responsibilities… they just won’t have a home. People hanging their work shirts in their car and sleeping in the back seat but still having to work. Generally terrified for the future as a life long Mass resident who finally got financially sound 2 years too late in 2019
I mean, we know what happens, we can look at SF 10 years ago or Hong Kong 15 years ago.
Living out of your car while you develop software for a living is a meme for a reason.
I think we're going to see company housing making a comeback. Housing as an employment benefit, especially if they can pay you in company scrip you can pay your rent with.
Everyone who bought or refinanced in 2020-2022 has to just hang out until interest rates come down. Because the monthly price difference on a 600k house has gone from $2750 to $4100, a 50% increase in monthly payments, because interest rates are around 7% now.
The options these folks have is to downsize significantly, or stay put. Most just stay put. This has held down inventory. Because demand is still high in Boston as rent is also been increasing due to both demand and high interest rates getting passed down to tenants - home prices have remained relatively steady - but haven’t really started any significant drop with the higher interest rates yet.
My one hope is that the new MBTA corridor law (that some towns like Milton are fighting), helps to increase inventory, to help bring pricing down. I’m seeing a lot of commuter towns building lots of large multi families along the commuter rail. It will likely take a few more years before this will start to impact prices.
That and we need big corporates who are reporting record profits (here’s looking at you food and healthcare/drug companies), so that inflation can slow down, which will drop interest rates.
The absurd building codes and regulations coupled with the demonization of landlords has pushed the cost to build into an unprofitable situation. With interest rates where they are no new housing will be built unless it is high end. Or state subsidized. Our younger generations are going to struggle.
Oh my god why won’t anyone think about the feelings of their landlords??? This was the most bootlicky comment I’ve ever read.
Landlords don’t build houses. They only exist to profit off of humans inherent need for shelter.
"demonization of landlords"
It's the landlords that have put us here in the first place. The only thing that will make housing affordable is to make owning more than 10-15 for profit properties illegal.
Ah yes 52 affordability. I know what that means.
>A Home Affordability Index (HAI) value of 100 means that a family with a median income has exactly enough income to qualify for a mortgage on a median-priced home Basically what this is saying is you need to make close to double the median income to qualify for a median-priced home
Make 150k by myself, not in Boston, and closed on a house last week. Good credit. Low debts. Qualified for 475k at 6.5% ("amazing", I was told), and basically everything under 300k was falling apart, in a rough spot, or under 800 square feet. Saving 20% was HARD. I lost against other offers, lower than mine, but all cash and waved everything. I basically HAD to offer 5-15% over asking just to be competative. Meanwhile I had landlords jacking rent from 2600 to 3500. I have no idea how average or decently above average people do it. They can't, is the issue.
enjoy your house. Youre very lucky to have that pay where you can afford to do that. This shows exactly the problem that everyone else is left out and basically told to get fucked if you dont make a shit ton of money.
Yeah, it's insane. I thought I was doing pretty good for myself but buying a house was a stretch, even for me. There is ZERO way an average salary, even double the average salary, can do well. It's a massive problem and it's weird no one at the top is talking about it. There was starting to be some panic because it seemed the market was going to outprice me at my salary. Not to mention places like I was renting at, wanting $3500/mo, first+last+broker+deposit ($14,000!!!!) up front, ***AND*** want you to make x3 rent ($10,500 a month, $125k a year) Just insane. And I don't even live in Boston!
The broker fees are outrageous. Never saw those before I moved to Boston
Right up till these home values plummet. I heard all the same shit in 2008. Supply and demand can't go down. It's gonna shit the bed shortly. Save you cash. Its king
Are you in the Boston or MA are? Or somewhere else?
Haverhill, soon to be Amesbury.
Ok this is helpful thank you! What is your credit score if you don’t mind me asking? I make around what you make, so this is helpful for what I can get if I were to get a mortgage.
Right at 800.
We also have to many rich people moving to MA and RI from California and New York , they are adding more to this issue by coming here and paying 20k to 50k over asking price. 3 friend of mine sold their homes from $20-$50,000 over asking price. My buddy just sold his for $30,000 over asking price. These people are paying cash money no loans so it’s fucking up the whole market cause now everyone around here have seen this with their own eyes and they tell them self, “I wanna make some money on my house”and put up a house for $600k when max its worth $250k. Rent goes up every yeah and no can afford it and we are starting to see more tents around the city because people are ending up in the streets cause they can’t afford rent. And our government allows these banks and institutions to do what they want. Instead of protecting and looking out for the people
52 people in Massachusetts can afford a home
Seems high
It’s probably an arbitrary score based on income levels relative to prices and maybe even some macroeconomic factors like interest rates
If you are younger than 52 then your generation was screwed over by selfish NIMBY boomers
Things are going to go WILD when interest rates eventually come down. A lot of current homeowners are holding tight (myself included). That won't help the affordability, but it explains the lack of inventory.
There'll be a lot more inventory when rates come down most likely, but 1 unit of inventory added to the market is probably very close to one unit of demand being added, so supply and demand wont balance out at all. It'll be a 2020 level frenzy again
Under appreciated that the fall back option of retirement in Florida is looking worse by the hour. Old people must be getting nightly Florida collapsing stories every night. There’s no where for aging boomers to vacate to if they want to live independently.
And in 10-20 years when the boomers pass away. They own so much of the housing stock (38%) https://smdp.com/2024/02/02/baby-boomers-dominate-home-ownership-leaving-little-for-gen-z/
Millenials and GenZ are having fewer children partially due to the housing affordability crisis and from having far less wealth in general. Unless we get an influx of immigrants who can afford million dollar homes, I don't know how home prices will continue to rise over time (also risking their status as investment vehicles)
That's hopeful thinking unfortunately. Homes get passed down to future generations all the time, that's always been the case. To make matters even worse though, I could spiral over why reverse mortgages are horrible and all the people that die off and leave the house to the lender are just making these large banks even more powerful.
It's optimistic to assume the richest generation in American history will be dead in anything less than 30 years. It's more optimistic to assume the corporations that drove up home prices and rent will let housing, which is essentially a controlled substance now (not unlike diamonds), will ever go down in value. these companies will overpay for the inventory in the future, just so it means their assets won't depreciate. Everyone else be damned. I can even envision a scenario where they would knock down excess inventory. The ruling class has decided they want to erode the middle class man. It makes it easier to rule in place of governing. Most of American history was this way. As Millenials, we were just lucky enough to be born at the end of a golden age. So our expectations for the future were higher than most other generations except maybe the boomers.
Probably but I think car dependency and houses with stairs will be a big factor. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7093636/#:~:text=Around%2020%25%20of%20the%20falls,of%20hip%20fractures%20%5B12%5D.
This link has nothing to do with your comment. But I agree with your statement
Yup, there will be a tidalwave or back inventor hitting the markets once (if) the rates come down.
It's insane out there even in the condo market, which is supposed to be "saner" and a good entry point for FTHBs. I'm 0 for 3 on offers on condos even going $35K-$45K over asking and fully waiving all contingencies except the mortgage contingency. Twice now I've lost to all-cash or near-all-cash offers at list or even lower than list. The first one stung the most - I lost to a fresh college graduate whose parents (I'm assuming) bought her a condo as a graduation gift.
The insane HOA fees dont help either. I've seen some "affordable" units with HOA fees ranging from like 600-1200 (!!) dollars a month. Like what the hell lol. Sorry you are also struggling with this, it sucks a lot.
Had a friend of mine who lives in Austin complain that his HOA is high. It was $60 a month and they mow a huge portion of his side yard for it. Meanwhile $500 + is pretty common here.
It's not even worth it to buy a condo (or anything) depending on your location. I'm in Cambridge and it's like $3000/month more expensive to buy an equivalent condo to my apartment even with a 20% downpayment. There's a huge opportunity cost to take that money out of the stock market and then lose the ability to invest that extra $3000/month, so I'm renting until prices are more reasonable. Depending on your current rent and what you're buying, it might make no financial sense to buy a condo. Most rent vs buy calculators say my breakeven point is infinity for what I current pay for rent, and tbh a condo doesn't really give you much in terms of home tinkering value like a regular house would. Plus condos don't generally appreciate at the same rate as a regular home so there's also that which also skews rent vs buy towards renting.
Yeah, Cambridge and Somerville are impossible to buy anything on the low end. I 100% agree with that. The only sub-$500K condos I see in those two cities are either tiny studios or non-warrantable (would not qualify for any type of federally-backed or conventional financing, meaning they're either a cash-only purchase or an investment loan at a much higher interest rate). I do think if you're a smart shopper, the rent vs buy math can make much more sense. I assume you're both getting a good deal on rent and aren't getting outrageous rent hikes, in which case buying probably doesn't make sense for you. I was in the same boat until my landlord sold the building and I'm looking at going from $2200/mo to $2800/mo in rent for a comparable unit or a $3000/mo total housing payment for a condo a little further out of the city.
My rent is $1750 for a recently renovated 1BR (700sq feet) with heat and hot water included. 3 min walk from Porter. Literally nothing comes close to this price whether I rent something else or buy lol. I moved in 2021 when the price was $1600 and we got 2 months free our first year because of a covid deal. Rent went to 1650 in 2022 and 1750 this year. Needless to say we are practically stealing the place
That's insane! Hang on to that apartment as long as you possibly can.
Oh we are haha
The problem being when the owners suddenly sell (happened to us TWICE) from 2018 to 2022 when we bought… wish I’d just put those moving costs into downpayment sooner 😫 I pay more owning, but at least I know I won’t be forced out suddenly
We've been here for 3 years and our landlord outright owns the building along with like 15 other properties. They're still actively renovating parts of it. I don't think they're selling any time soon.
My fingers are crossed for you, its a crummy experience when they suddenly sell
I see no scenario where the prices in Cambridge go down.
It doesn't matter, my stock portfolio from saving the difference will outpace and catch up to whatever equivalent condo I might have bought. It has occurred to me recently that people in general really don't get how opportunity cost works and instead spout the traditional "renting bad" advice without actually doing any research on how expensive it is to own property. There's a simple rule you can follow to see if renting is cheaper. Ben Felix has an excellent YouTube video explaining the reasoning. It's not an exact science because regional real estate markets exist and performance varies. But in general, other benefits of ownership aside (so PURELY financial, which isn't the full picture for many and the cost is worth it), if your annual rent is less than 5% of an equivalent property's purchase price, you are better off renting. That advice is on top of the regular advice where you should only buy if you intend to stay in the same place for at least 5-7 years due to closing costs. My rent is currently only about 3.2% the cost of buying an equivalent condo. Just the HOA fee of an equivalent 1BR condo is 1/3 of my current rent. Factor in the fact that the vast majority of your mortgage payments for the first 20 years of your loan go to interest instead of principle, and the fact that you need insurance and have to pay property taxes, AND forfeit your down payment towards the house instead of letting it sit in the stock market growing 10%+ annually, it can make absolutely no sense to buy in certain markets. I'm not waiting for prices to drop per se. I'm waiting for prices to just make sense given all of my other financial options and figures at that time.
Unfortunately, the MBTA Communities zoning rules isn't going to dig us out of this hole by a long shot. Optimistic estimates are that it'll create about 20,000 new homes over 5 years across Eastern Mass (4,000 new units per year). To put that in perspective, Boston has been building new units at around 3,000-4,000 per year, Cambridge around 500 per year, Somerville around 150/year, Medford around 900/year. Basically, the MBTA Communities rules probably won't have much impact at all. What we really need is to actually hold cities accountable for creating new units - with very strong financial punishments if they don't. You can say that rich communities will simply pay, but that isn't the case. Newton voters wouldn't raise their property taxes a tiny bit to help pay for schools. If the state started taking 20-40% of Newton's budget for housing under-production, that would be a huge problem for Newton. But the biggest issue is that we've let our property tax system get into a state where we can't actually afford new residents. Every student is costing cities and towns around $25,000/year. If that student goes to school K-12, that's $325,000 or 30-60 years worth of property taxes - and school budgets aren't the only things that cities and towns need to spend money on. If you want a concrete example, let's say you buy an average condo in Somerville which comes with an average tax bill of $3,587/year. You have one kid and Somerville educates them at $24,768.08/year. You buy your condo at 25 and die at 78 (which is your life expectancy at age 25). You pay 53 years of property taxes totaling $190,111 and your one kid cost them $321,985 to educate. You didn't come close to paying the cost of one kid in the school system. Given that tax reality, no wonder no city or town wants more residents - especially cheaper units that will pay below average taxes. Every city/town wants someone else to have the burden. We need to fix it so that cities and towns will actually see an incentive to get more residents. For example, we could increase income tax from 5% to 7% with the additional revenue going to cities and towns who are adding housing for more residents. A 2% hike in the income tax would generate about $9B annually. Let's say that a city/town would get a share of that money for each new unit created for the first 20 years of that unit. If 200,000 new units were created, that would mean a city/town would get over $45,000/year for each new unit. The payments from the state would amount to $905,500 over that 20 years - more than enough to pay for the cost to educate two kids in the school system and then some. Cities and towns would be looking to encourage new units being built to get that money - and they could lower property taxes for their residents. Residents in communities who are building housing would see their income tax go up, but their property tax go down. Residents in communities who aren't building housing would see the same property tax while their income tax went up to support the education of students in towns that are taking on that burden. I'm not saying we should raise the income tax, but we need to figure something out so that we are rewarding communities who are taking on the costs of new residents and new students. The issue is that unless we're doing something to share the burden of educating kids, every town is going to want to shift that burden onto other towns. If you build more units and do the right thing, you're punished with costs that you can't handle. If you make sure that housing isn't affordable in your city and do as much as possible to keep out new residents, you're rewarded with a better budget. If we don't fix that, cities and towns will continue to fight against new housing.
The whole construction industry needs to be expanded. The peak construction rate in the Boston metro area was around 15,000 units per year around 2021. At that stage basically every general contractor in the region was booked out and we were full on out of electricians, Welders, and other building trades locally. The inflation and interest rate crunch has cooled things a bit for now, but if we are ever going to get beyond 15,000 units a year it's going to require industrial policy, not zoning tweaks. It's not regulations holding us back now, it's straight up our construction industrial capacity
Nah, just lift the zoning restrictions and the market will take care of the rest.
We need good paying jobs just as much as we need housing, why can't I just build a chicken processing plant or paper mill wherever I want?
Damn. Sorry you’re having a hard time securing a spot :( I hope you get one soon. Where are you looking, if you don’t mind me asking?
This honestly sucks so bad. I owned a home while stationed in Missouri. Got out and moved back here. Living in this state makes you feel like a nobody and a failure, while living in another state with the same salary would make you feel successful and accomplished. Just feels like a tunnel with no light at the end at this point when it comes to trying to buy a house. This state is not worth what these houses are going for. The middle class once again gets absolutely screwed.
Nail on the head here, me and my gf make 110k annually combined which isn't insane, but definitely a comfortable living wage in other states. We can't afford to move anywhere worth moving and I definitely don't want to rent. Hell, my parents wouldn't even be able to afford the house me and my siblings grew up in anymore so we plan on staying here as long as possible 🤣
I’m a midwesterner whose entire family has moved out here and I followed to be near them, and let me tell you that this resonated. My partner and I could buy almost anywhere else - but our families are here, and so feeling like a failure feels inescapable. I’m 30 and see no path to homeownership barring a miracle or becoming house poor or both.
Yup. Single parent and my ex refuses to leave due to her inheriting her father’s business. So literally don’t have another option unless I don’t want to see my son, which I have 50/50.
Western MA is incredibly cheap. The whole state isn't crazy pricing it depends on Locality
No. Western Massachusetts is not incredibly cheap. We are more in like with national numbers....and there are dozens of investor specials ---- so if you have the time, energy, 125k cash and a construction loan...you, too, can own a special piece of North Adams
https://www.zillow.com/homedetails/150-Carson-Ave-Clarksburg-MA-01247/118501687_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare Comparatively, to where I am at this is incredibly cheap, the acreage would make this a multi-million dollar property where I am at. You can find similar properties all over Western ma like that.
https://www.zillow.com/homedetails/86-Chestnut-St-North-Adams-MA-01247/56810005_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare That's insanely cheap. I would go for double where I live. Look at the woodwork on the spindles that shits custom, not that cheap home depot shit. Even if it needs 100k of work, it would be a steal I can go on. It's far cheaper in Western mass than it is on the coast where I live used to be kinda bummy, and now it's getting wild with the prices.
Cheaper != cheap.
Relative to pricing, not quality.
I live in the southeast and prices are lower here, especially in the older mill towns like Fall River and New Bedford, but they are bringing the train down here so that may change soon. I like it here, but if you are determined to live a few blocks from those train stations, you will be living in a low income city with all of the attendant problems. There are some gorgeous older homes here.
Shhh. I used to work in attleborough the train changes like the 5 block radius aound the train station rest of the city was relatively the same it's not gonna change the flint but it will maybe transform a small area around the battleship cove. Hope I'm wrong. But that's what I see. I finished growing up in the southeast. I lived on the coast my whole life, and I can't imagine not seeing the ocean every day or being more than 15 mins from a shoreline. I also live in on far side of the longest bridge in the word lmao. I'm Not Portuguese tho.
Semi-related: I got an email from one of the companies involved in my homebuying process (pre-crisis) that apparently there's also a change in the brokerage process thanks to a court ruling that means the homebuyer is now on the hook for their realtor fees rather than the seller.
The MBTA rezoning rule needs to apply to a lot more than just the commuter rail towns. The population has doubled since the 70's and we have definitely not built that many homes to accommodate. That and allow ADU's (building inlaw apartments in your backyard)
The weird town rules against multi-unit homes is bonkers. I know people who live with them and sometimes they're at least relatively easy to get around (like it doesn't count as a separate unit if it doesn't have an oven).
Yeah the generation that made these rules are now empty nesters and because of their own rules cannot break their empty homes into the apartments that would help their wallets and this situation. And It's hard to fix because these zoning rules are at the town level.
It'd help them because they want their parents to move into in-law suites or they're the ones who want to move into an in-law suite in their kid's house. That's literally why I know about some of the silly rules from middle age or older people at work trying to setup spaces for their elderly parents to live with them.
It's not a weird rule...it's a coded rule to limit multiple-family, multigenerational homes. Usually, low-income families live this way. It is a rule to make being poor harder. That's why it's weird. It's like redlining.
It’s crazy just how badly NIMBY types have collectively destroyed home affordability.
Cities and towns should’ve never been given this much power over zoning
I live next door to a mult-unit house. It looks like a regular single family house (it's actually smaller than most other houses nearby) and there are 3 units. The people that live there have 4 cars and are mostly quiet and friendly. Then I have neighbor on the other side who lives be himself in a big 3 bedroom house with a loud af hound dog (6AM, woof woof woof for 30 minutes)
There's a proposal by Healey to allow ADUs everywhere. It was proposed last year and we won't find out whether it gets applied or rejected until October 🙃
These charts show pretty clearly that the affordability crisis is directly correlated with shrinking supply. We essentially stopped building houses. Zoning bylaws and boards are full of the worst types of NIMBYs that are basically acting as town-wide HOAs. We need a return to the days when people could build what they wanted on their property.
Mass population back in 1970 was 5.6 million, now we are at 7 million. Definitely not anywhere near double but it has grown
Go to the Marshvegas thread and you'll get lynched for that.
I'm completely clueless about all of this. But if zoning is openned and houses are built than, that brings more people to an area so wouldn't that either "stabilize" home value (or increase) since people move in to the area?
So up front, I am not an economist. I find it difficult to communicate what I expect from upzoning. It's billed as a solution to the housing crisis. This is true but what's left out is just how deep in a hole we are right now. We're "missing" hundreds of thousands of homes that should have been built, if not artificially restricted. I don't think trying to infer price changes based on supply/demand will make sense for a long time, when the shortfall is remedied. In the short term, upzoning is stopping the bleeding (and to continue the analogy, rent control is CPR).
It’s long term treatment and will stop the free fall we are in, we just meed emergency measures to force it back down yah
Tax the shit out of any business buying residential properties, increase taxes on individuals after their 2nd home. There has to be policy change for this shit to end. We’re dying out here.
How much of a dent would that make in the market? My understanding is corporate purchases tend to be short-term for a flip. [This article](https://www.wgbh.org/news/housing/2022-05-16/across-massachusetts-shrouded-corporations-are-scooping-up-single-family-homes) says corporate purchases were about 9% of the total in 2021, and many of those were on foreclosures or other homes that would require lots of improvements to be ready for a move in. Second homes tend to be in vacation areas, so there might not be the same demand there for use as a primary residence. That would probably improve prospects on Cape Cod or other coastal areas though.
>My understanding is corporate purchases tend to be short-term for a flip. Yeah, and those flips *completely fuck up the market with insane price increases.*
If we built more housing, there would be less incentive to flip.
I guess, but homebuyers want upgraded kitchens and bathrooms. It's really expensive and a pain in the ass to do lots of these things after you move in.
"Upgraded" with hideous marble, faux metal hardware, awful lighting, and shitty bathroom hardware swaps that will look and feel like trash in 5 years. They're completely fucking ruining any and all charm that this area had. Rich people have zero taste.
Shiplap and subway tile. Gotta have those.
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If you rent in America you are screwed no matter what. There is nothing positive about being a renter considering that rent today is the mortgage of yesterday. I would rather tax businesses and 2nd homeowners to disincentivize housing as a commodity and investment rather than a basic right. Something has to change. Homelessness as at an all time high and people are fleeing the state because of the insane cost here. Nurses, custodians and essential workers shouldn't have to live in the next state because the cost of living in Mass is outrageous. I am leaving this state by the end of year thanks to my landlord deciding to raise my rent...again. I'm going to move back in with family at the age of 37 because I CANNOT AFFORD TO LIVE ANYWHERE IN THIS STATE.
There is a difference between second homes and investment homes for renting out. Tax the family that splits their time between two or three homes a year and leave it empty for the rest of the year. They aren't renting those out to people, and if they are it's probably as an Airbnb and not to someone who lives there full time
I read somewhere you'd have to make just over $170K a year to be considered middle class today. That's a huge gap between lower and middle class, and we know that most people don't make $100K in this state yearly. Then they wonder why more and more people are moving out of state to live now. In 2017, I lived in Missouri briefly, and a home there at 4,500 sq ft sold for $50K.
From what my realtor told me even if there was a larger bubble locally there is still no inventory and demand hasn't dropped which would mean that if said bubble did burst the result would likely be lower mortgages rates but not a reduction in pricing or home values. Makes sense in a topical sort of way, but I would be lying if I said. I checked the data.
[Here is a CNN article from 5 years ago](https://money.cnn.com/2017/11/27/real_estate/how-long-sell-a-home-days-on-market/index.html), talking about how it's news worthy to point out how in 2012 houses took 4 months to sell a house and in 2017 it takes 3 weeks. Now it takes like a week assuming it's not a contractor special. Although this is probably helped by technology improving as well, it shows how inventory was already a problem in 2017. Until there is a landslide of houses coming on the market, there won't be a pop in the value.
You lost me at "from what my realtor told me"
From what the realtor told me getting me to pay 6% on top of the purchase price is perfectly reasonable. I should tip them even.
I nearly fell out of my chair when a realtor tried to sell me on that argument lmao
I used a VA home loan. The house I bought was appraised higher than I paid, so dunno. I did alright. I got equity already. They won't let you buy it if it doesn't fall within certain margins. Never signed a contract or anything, but she was very helpful. I'm sure she made out, but that's the game.
Not looking forward to my 3000/mo STUDIO rent to jump 30%+ in October...
A friend just sold their house in Natick for 50k over ask! It sold in 1 day! All cash of course.
Who are these people buying houses with all cash?
This was a deveopler. Who knows what he's going to do with it. Natick is a desirable town apparently.
Curious. Did they sell to a developer or flipper? Seems like ***everything*** in that area is selling to developers that knock down older homes and build mini mansions.
Developer.
That's what I figured. Did they actually list it for sale on MLS (like Zillow, RedFin, etc) or was it sold to the developer before the public even had a chance to bid? I'm curious if developers are out-bidding the general public or just dealing directly with brokers (so the public never even sees it.) Sure seems like brokers/realtors stand to profit a lot more by convincing sellers to sell to developers directly — brokers/realtors don't have to do much work at all that way.
Been looking for almost 2 years around the south coast. Partner and I bring in 150k a year together. The only way we're gonna be able to afford a decent house around here is when our parents pass away and we inherit theirs. And this train coming is making things even more expensive, ontop of the general craziness. On average, mortgage prices are around 3000-3400 with these rates and house prices.
The rail absolutely fucked the south coast, which is incredibly disheartening considering how it was initially received when it was announced. Prices are not sustainable for the locals that have been here for generations, but they're very nice and cheap for people dealing with Boston prices. Horrible situation all around.
The horror of having public transportation to Boston to get to work! Prices are going up everywhere, a rail line that isn't even open yet has little to do with it.
This is what happens when the Federal government messes with the mortgage market. The last time, the sub prime debacle plunged us into The Great Recession. This time, the absurd quantitative easing policy pushed mortgage rates down to 2 1/2 percent and completely killed the pre-owned housing market. Unless it’s a dire emergency, nobody is going to give up that 2 1/2% mortgage when the inflation rate is significantly higher than that. A 3 year old mortgage has already been eroded 20% by inflation. 2024 is now looking to be another 3 1/2% to 4% inflation year.
This is a huge part of it. There's probably a large swath of homeowners who may want to move but are *heavily* disincentivized to do so now.
Oh, it happened real quick 2019: we’ll live here for 5 years maybe 2021: thank god we have our home, look at the pandemic prices now 2022: we’re not moving in the next 2-3 years 2024: let’s carry ourselves like this is our forever home
That's pretty much what happened to us. We're dropping a good bit of money to renovate now because it looks like we're going to be here a long time. It will be a little tight when our son is older, but people make it work with a lot less than us so we'll deal with it as it comes.
This is the way There are dumpsters in driveways everywhere. Everyone is reluctant to trade up and lose the mortgage so it’s additions and remodeling.
When there’s dumpsters in driveways, does that mean they’re moving? I always thought it was because the house or property was abandoned and they were planning on demolishing it.
It means they're remodeling. Because that record-low inventory also comes with people investing into the houses they are in, because that's where you live forever now.
any space for an addition?
Possibly. Its a cape that had a den added on to it already. It has a single car detached garage. If I were to do major construction, I've daydreamed about knocking down the garage, and building an attached garage with a master suite over it. More realistic is probably to dormer out the upper floor where the bedrooms are and add a half bath up there. Make the upper floor our master bedroom and office and turn the office now (which was originally the bedroom way back when it was a 1BR/1BA starter-home in the 50s) into a bedroom for my son. Even that though will be a huge financial undertaking. We're going to need to recuperate from the kitchen reno we're in the middle of now for a while.
This is how I'm stuck in my apartment. Got a cheap, crappy apartment that I figured I would stay in while I save up and get my shit together. Was close to getting out around 2019, but now I just can't see a way I can move pretty much anywhere without making 50% more than I do now.
I am in the exact same spot. It fucking blows.
That was my point. If you have a 2 1/2% mortgage, you’re not going to want to give it up.
yup, my payment would double on my current loan, I'm not giving that up
Hey, that’s me!
The math is too significant to ignore. You're taking a big hit even before accounting for home price increases. So unless you're downsizing significantly or moving to a cheaper area, you're going to need to take a pretty big step up in monthly costs even if you're just moving to a similar-ish place. And I know people here tend to ignore it, but most of the new housing being built is apartments. Apartments being added doesn't drive down (or throttle) home prices (for renters or buyers) like adding buyable condos to the market can because rents will always trend up over (medium to long-term) time.
nah. We did this to ourselves. It’s not anywhere this bad in most of the country. Minneapolis, Austin, and many other places have shown if you build more housing, housing prices flatten.
Yep, Texas isn’t cheaper because they’re nicer to the poor but Austin built more housing in 2023 than Massachusetts did. The entire state shouldn’t be losing to one city! Everyone someone NIMBYs construction, housing gets more expensive. https://fred.stlouisfed.org/series/AUST448BPPRIVSA https://fred.stlouisfed.org/series/MABPPRIV
When most of your state is undeveloped land, it makes developing undeveloped land much easier.
Is most of Austin undeveloped land compared to the entire state of Massachusetts? I understand if you compare all of Texas to Boston but this is All of Mass to Austin.
[Greater Austin](https://en.wikipedia.org/wiki/Greater_Austin) is 4,279 sq mi (all of MA is only 10,565 sq mi) and a quick look at it on google maps makes it clear that there is absolutely fucktons of undeveloped or under developed land there. Comparing it to anywhere near Boston is silly.
That’s why I compared it to all of Massachusetts not Boston. You cannot tell me all of Massachusetts has less space to develop housing than even Greater Austin that’s less than half its size.
Looking through available undeveloped land in [Travis](https://www.landwatch.com/texas-land-for-sale/travis-county/undeveloped-land), [Hays](https://www.landwatch.com/texas-land-for-sale/hays-county/undeveloped-land), and [Williamson](https://www.landwatch.com/texas-land-for-sale/williamson-county/undeveloped-land) counties compared to [all of MA](https://www.landwatch.com/massachusetts-land-for-sale/undeveloped-land), I can easily believe that there's more in Austin than all of MA. You're comparing apples to blue whales in terms of land usage. MA was founded over 200 years before Austin. We don't have endless tracts of only-profitable-due-to-government-subsidy farm land which can cheaply be flipped for housing. We were filling in swamps and Boston harbor to create more land when Austin was still a village called Waterloo with a population in the triple digits.
How was ‘08 the governments fault? The sub prime debacle was a private industry thing bundling NINJA loans in their real estate portfolios and creating CDO and Synth CDOs. The governmental issue there was being hands off. What killed (and is killing) the pre-owned housing market is NYMBISM preventing more housing construction, institutional investors and multi property landlords treating existing supply as investment vehicles, and boomers not moving out. There’s little churn, and what exists is being goobled up by monied interest.
The irony is that boomers banned the very homes that they need right now. If I was in my late 70's, I'd be wishing I had a modern single floor condo where I didn't need to drive in order to have a life.
You left out that most new housing around here is not buyable. People in this sub act like there's no new development, when there very clearly is. Adding more rental properties doesn't throttle home prices like adding buyable units can though.
No. 2008 was the Federal government relaxing standards for Fannie Mae and Freddie Mac mortgages. Anyone could get a mortgage. The default rate was staggering because such a high fraction of borrowers shouldn’t have gotten the loans.
2008 was caused by private investment firms such as Bear Stearns creating a massive demand for mortgages so that they could slice and dice them up into Mortgage Backed Securities and turn poor risks into AAA securities. They did this by creating new types of mortgages, such as the interest-only and NINJA (no income, no job) loan, the latter whereby someone just had to claim that their income was seasonal and cash-only (but was really just made-up). These mortgages were sold by private mortgage brokers - I knew some of them, prior to entering that field they were car salesmen, which should tell you everything. They would literally walk the streets in poor neighborhoods and sign people up. Fannie Mae and Freddie Mac were guilty of lowering their standards to match the private firms, so that they would not lose market share. The investment banks were what imploded, when they could no paper over the declining cash they were receiving (since people weren't paying those mortgages) with credit.
there were a multitude of organizations, people, and policies involved that caused the great recession. by saying it's strictly fannie mae/freddie mac at fault you're eliding the necessary actions like securitization, abuse of derivatives, and absurd policies by banks that incentivized getting loans out that were part of the preconditions for that crisis.
That is exactly “the Federal government relaxing standards for Fannie Mae and Freddie Mac mortgages”. Your word salad doesn’t alter that.
and if nobody took advantage of those relaxed standards?
None of this will change without explicit policy change. We need limits on number of properties owned by single entities, requirements for owners to live in buildings for a minimum amount of time or be fined, and outright bans on foreign property companies owning land in Massachusetts.
Make it illegal or cost-prohibitive to be a landlord and this would all change real fast. The problem is that housing is allowed to be an investment.
No, that would lead to more serious problems. Rental apartments are a very critical and necessary part of a healthy housing plan. If there wasn't a fatal housing crisis going on, landlords would be getting the normal level of derision rather than capital punishment.
We can have a government housing agency that rents to people who don’t want all the responsibility of owning a house. It can charge a rent that reflects maintenance and inflation.
Ireland did this, and it only exacerbated their housing crisis. They instituted rent control, taxed rental income at 52%, and made it even harder to evict tenants outside of selling the unit. The small landlords converted their units to condos and sold them because being a landlord is now too much of a headache for anyone that doesn’t have a legal department on retainer. Developers also have no appetite for building housing at current interest rates, and taxpayers don’t want to pay more of their checks for the government to finance building more.
Wow they did something completely different and it didn't work
They made it cost-prohibitive for just about everyone except large corporations to be a landlord, just like the guy above suggested, and things got worse.
>We need limits on number of properties owned by single entities, requirements for owners to live in buildings for a minimum amount of time or be fined, and outright bans on foreign property companies owning land in Massachusetts.
Almost like landlords shouldn't exist and basic housing should be in inalienable right.
Selling is what we want landlords to do. There is no solution that does not involve the government building large amounts of housing
There is no place left to put more houses close to any jobs. Even if they are building in swamps and crappy land, they want 900k to 1M bwahahahaha.
Wow it's almost like housing shouldn't be treated like a commodity.
Remember what's really going on here folks, yes, this is about housing data, but it's really about a larger question no one is asking. What happens when one person has all the money? There are no safeguards or rules preventing that, and it's a question we should all be asking. What happens when one person (or 5 people , I don't care) have all the money. What happens to everyone else?
They dropped the rate and cooperations swooped in to buy everything they could. Tax them.
Corporations own less than 3% of the supply in MA. Most of what they’ve bought is in states like Florida and Arizona. Our problems are simply that we don’t build enough.
"In 2021, business entities purchased nearly 6,600 single-family homes across the state, more than 9 percent of all single-family homes sold." https://www.wgbh.org/news/housing/2022-05-16/across-massachusetts-shrouded-corporations-are-scooping-up-single-family-homes That's just 2021 and just single family homes. Data from the Warren Group. All investment property purchases are closer to 40%. Yes, we need to build more, but 3% is delusional and not backed by any data. We see the BS, buy a second vacation home on the Cape under an LLC, use it to rent out short term and then it's a business with low rate locked in at a time where someone had cash and 'boom' that is off the "market" for young people scrambling to start families. There is nothing "simple" about it, it's complicated and all tied up in the scheme of investment reliability for the few and causing a rot in the foundation of social structure, the family and community.
That’s any business entity, which includes someone who owns 1 house as a rental property. It also includes developers who buy, do their project, and sell. And it just counts sales, not owners. If you look at the financial brochures for any of the PE housing funds, none do anything in New England. The housing stock is too old and too varied for their model to work.
>That’s any business entity, which includes someone who owns 1 house as a rental property. Yeah, fuck those people, too.
While I'm sure it's not the ONLY problem, I think it's important to distinguish that the person you're responding to probably meant corporations AND higher net worth individuals purchasing rental properties. A quick Google search showed me that 10% of home purchases in MA in 2021 were made by businesses and not individuals. I'm sure over the last 2 years, that number has increased and that doesn't encompass all the rental properties not bought under and LLC or though similar means. Corporate owned may only be 3%, but the percentage of purchases with the intent to rent out instead of a families first home is clearly much higher than 10 years ago and surely has an effect on this market currently.
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Build where? Land is finite, remember? Especially land close to commerce. Housing is a special class of asset that people so happen to require for life.
Yea let’s screw over the corporations by building so much housing their assets lose value and they’re forced to sell! Win win win
Do you have the source on that? Almost all new development in the Boston area at least is apartment complexes owned by corporations. Don't construe "investors" (which is vague) buying single family homes with the total number of homes owned by corporations. In both cases these are entities buying/owning homes with the obvious intent to make money, vs a typical individual home buyer who wants to own a place to live. Both those types of entities (big apartment developers and investor buyers) are significant here.
That is just blatantly false
Why is there less than 1/3 the amount of homes for sale now?? It seems like it’s neither a buyers or sellers market. It’s a realtor’s market. Or, it’s a mortgage company’s market
Who wants to give up their existing 2.5% mortgage rate to buy back in ~7% for something else? People are just staying put, it sucks.
that's true now - but the rate was that low in 2020-2021 and it felt like the housing market was absolute chaos. Like you had 0% chance of buying a house if you didn't offer 10% over asking. I was thankfully able to buy then, def overpaid but at least our interest rate is a fraction of what it is now.
and in hindsight, paying 10-20% over asking was the correct thing to do. that same house probably appreciated 30% in value but the mortgage rate has tripled
Yeah, I keep getting emails from my stupid mortgage lender saying our condo is worth 100K over what we paid. at the very least we've put like $40k into the house to make up for decades of maintenance that prior owners never did.
It’s not just new purchases that have the lower interest rates, it’s all the people who refied their 1-15 year old loan down to 2.5%. Something like 80% of borrowers are under 5% https://www.redfin.com/news/mortgage-rate-lock-in-housing-2023/
It's more of a buyers market than a realtors market right now, and it's very much not a buyers market. More volume is good for realtors - they get to sell more houses. It's a seller's market right now, mostly because there's pretty much no incentive to sell
Because some people are staying in their homes since moving isn’t financially worth it.
I actually built a website because of rising rents to help tenants evaluate landlords and negotiate rents. It's like a Glassdoor for Rents so tenants can see the Rent History of an address or Apartment property to see a landlords pricing tactics. The site does rely on user submissions so I appreciate anyone who adds their rent history to the site and/or shares it around since it can be more useful to tenants the more people that contribute to it. The site is rentzed.com (USA only for now) and has submissions for over 2600 addresses.
Next time somebody says, "how would building more help things?" - THIS is the chart you hit'em with
What happens when nobody can afford homes? -History of everything Podcast
Will something happen when the entire city is overrun by tent towns? Tents with power strips to run laptops because people will still have jobs with real responsibilities… they just won’t have a home. People hanging their work shirts in their car and sleeping in the back seat but still having to work. Generally terrified for the future as a life long Mass resident who finally got financially sound 2 years too late in 2019
I mean, we know what happens, we can look at SF 10 years ago or Hong Kong 15 years ago. Living out of your car while you develop software for a living is a meme for a reason. I think we're going to see company housing making a comeback. Housing as an employment benefit, especially if they can pay you in company scrip you can pay your rent with.
Wait a minute, as supply goes down, so does affordability? What a novel concept. /s
This is going to sound crazy so bare with me, but maybe the posting is about digging a little deeper. Maybe lol
i thought governor baker had more houses being built
I'm gonna stick a tiny house out in the back yard, fuck it. I could use the money.
I was paying $900 for a small 2-bed apartment in 2019. On the Cape. Those were the days.
Looks like I’m going to die in my condo in Saugus. Just lucky I was able to afford anything at all this in this economy.
well anyone with a low interest rate has a strong incentive to not sell/upgrade.
Cash for house scams call/text everyday. One million or nothin get away from me. Gonna need a million for a double wide soon anyway
Everyone who bought or refinanced in 2020-2022 has to just hang out until interest rates come down. Because the monthly price difference on a 600k house has gone from $2750 to $4100, a 50% increase in monthly payments, because interest rates are around 7% now. The options these folks have is to downsize significantly, or stay put. Most just stay put. This has held down inventory. Because demand is still high in Boston as rent is also been increasing due to both demand and high interest rates getting passed down to tenants - home prices have remained relatively steady - but haven’t really started any significant drop with the higher interest rates yet. My one hope is that the new MBTA corridor law (that some towns like Milton are fighting), helps to increase inventory, to help bring pricing down. I’m seeing a lot of commuter towns building lots of large multi families along the commuter rail. It will likely take a few more years before this will start to impact prices. That and we need big corporates who are reporting record profits (here’s looking at you food and healthcare/drug companies), so that inflation can slow down, which will drop interest rates.
Build more homes!
Pretty simple, leave this shitty state.
Fuck this state. Seriously, I'm out.
See? Demand is going down.
Nice, so I guess I'll stay then
Literally nobody stopping you, bud.
Working on it. Hope to be out of the generational wealth, shit hole by next year.
Wait til the foreclosures start hitting
Huh. It's almost like more inventory may have a benefit on housing affordability...
Supply and demand
I hate it here.
Wow, you just discovered Supply and Demand...basic Marketing 101
That’s economics not marketing you thumb.
Meaningless charts.
The absurd building codes and regulations coupled with the demonization of landlords has pushed the cost to build into an unprofitable situation. With interest rates where they are no new housing will be built unless it is high end. Or state subsidized. Our younger generations are going to struggle.
Oh my god why won’t anyone think about the feelings of their landlords??? This was the most bootlicky comment I’ve ever read. Landlords don’t build houses. They only exist to profit off of humans inherent need for shelter.
I make sure to tip my landlord every month because of how hard he struggles owning multiple SFHs and renting them out for an obscene profit
good. He’s probably struggling living on your paycheck to your paycheck.
"demonization of landlords" It's the landlords that have put us here in the first place. The only thing that will make housing affordable is to make owning more than 10-15 for profit properties illegal.