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December 31, 2005

Real estate bubble: Top news story of 2005?

Bostoncom_010106_1For the past month, two Boston Globe real estate articles, one on falling prices and the other on rising foreclosures, have topped their list of "Most Popular Stories" (click on image for larger view).  Now, guess what their cross-town rival, the Boston Herald, has listed as #1 on their "top business and economics highlights of 2005"?

1. Pop goes the bubble — The state’s housing bubble finally sprang a leak this year, with a noticeable slowdown in sales, a falling off in prices and long waits to sell homes. Partly brought about by rising interest rates, the slowdown was evident by May, when housing sales fell by 11 percent over the prior year. The market hasn’t shown much improvement since.

The rest of the Herald's list includes factors that have contributed to the end of the real estate bubble and will continue to pull down housing prices in coming months and years:  slow job growth in the state, rising gas and energy prices, and loss of major Massachusetts employers through mergers, acquisitions, and relocations. 


The Real Estate Cafe has been tracking factors underlying the housing market in Boston since 2000, the peak of the dot.com boom, and we are eager to share our knowledge and get your insight, too.  Would you be interested in participating in a monthly or bi-weekly real estate round table, or since we'll probably host the conversation in a restaurant or bar, an occasional "Bubble Hour" or "Boston Realty Party" in 2006? If so, we'd like to hear from you particularly if you want to be a featured guest. 

We know that our clients tend to be part of the "do-it-yourself" movement, but this is one of the ideas we're exploring to increase peer-to-peer interaction in 2006.  Please let us know if you have ideas about how we can help you learn from each other to make more informed decisions, avoid making mistakes, and ultimately, save money.

Bill Wendel | 11:21 AM in "We" companies, Do-it-yourself, Foreclosures, In the News, Inside The Real Estate Cafe, Price trends, Real Estate Bubble, Social Networking, Timing the market | Permalink


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Good day! I came across your website looking to see how soft is the multi family market in the south shore area of boston? What is the % difference between the asking and selling prices right now?

Posted by: Tucu | Jan 12, 2006 3:12:21 PM


Thanks for your question. It's hard to answer without a specific town, or short list of towns to use to collect data from the MLS.

There may be some other ways to look at the data, and other things to consider, too. It might be worthwhile to visit the "Market data" link on my fellow buyer agent / Real Estate Cafe consultant's web site:


If you would like to send the list of towns privately, please use [email protected] and thanks for your question.

Posted by: RealEstateCafe | Jan 12, 2006 11:25:02 PM

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