Affordiblity: What happen to it? (Boston, Billerica: sales, real estate market, rental)

[baystater]

So I was talking to my father recently and he was complaining about how much the cost of living had gone up in the baystate since I was born
(early '70s). He really harped on cost of housing. He said he bought his first home I 1972 for about $18,000.00 in billerica. He said the house now was probably about $418,000.00 and said he can't figure out why people would pay such prices for as he put it "A place to hang your hat and lay your head at night." I said I did have an answer to that question.

So. Since I couldn't answer him I have come to you guys to see what you think. What has cause Mass. to become so expensive in such a short time?

[Hatless Wonder]

Boston has always been expensive, but prices since 2001 have been insane. Among other things, affordable housing was killed by NIMBYs, suburbs banning multi-family housing, The 1997 Capital Gains Tax overhaul, and the death of rooming houses.

[skytrekker]

Affordable housing along the east and west coast is tough to find.
In most of Connecticut that house that sales for 418K in Billerica would sell for around 250K- so not everywhere in New England is as high as greater Boston.

[Parsec]

One answer for you: Demand. MA has some of the toughest zoning regulations in the nation, so it's very hard to build new housing stock here. You never see new subdivisions of 400 single family homes springing up every 1/2 mile like you do in Atlanta or Dallas. New developments usually only have about 10-12 houses on a privately maintained street in our suburbs.

[LeavingMA]

One answer for you: Demand. MA has some of the toughest zoning regulations in the nation, so it's very hard to build new housing stock here. You never see new subdivisions of 400 single family homes springing up every 1/2 mile like you do in Atlanta or Dallas. New developments usually only have about 10-12 houses on a privately maintained street in our suburbs.

Well said and good point. Also along the same lines is density. In MA you can get to many states and places very easily. There just isn't that much land available in MA.

One more thing is unions. The cost of building a home or other labor type jobs are more expensive in MA.

[seldomseen]

That is a "tough" question to answer, and many factors attribute to the high cost of housing in Massachusetts. The primary cause of high real estate prices is market trend. Everyone wants to make money...so sellers/real estate agencies, etc have essentially created a faux real estate demand, causing prices to esclate to astronomical proportions, another major factor that helped propel real estate prices, were the low interest rates/creative financing that mortgage lenders were offering, which allowed buyers in all income ranges to afford more house than they would normally be able to. Many other contributing factors also exist, and I could go on for paragraph, after paragraph.

Supply, and demand has always been the fundamental cause of high and low prices of a product/service. But the inventory of homes exceeds the demand here. Prices are steadily decline in the real estate market in just about all the east coast, and west coast markets, and will most likely continue to do so. Because the average cost of a modest single family home in Massachusetts has out-stretched buying power of many families here, and this reality is just going to cause real estate prices to continue dropping. Another trend that is occuring is the influx of rental properties in the area because sellers just aren't able to sell thier overpriced homes. And what is so sad is, the rental prices are significantly lower, than what the mortgage would be if the house were sold.

[findingmesomeday]

Originally Posted by Parsec

One answer for you: Demand. MA has some of the toughest zoning regulations in the nation, so it's very hard to build new housing stock here. You never see new subdivisions of 400 single family homes springing up every 1/2 mile like you do in Atlanta or Dallas. New developments usually only have about 10-12 houses on a privately maintained street in our suburbs.

Absolutely on target. Other parts of the country seem to love this housing-development mentality. To find anything built by Pulte, Toll Brothers, Centex, etc., you have to go outside 495. Inside, just as this poster said, you will get a developer (usually a "townie") purchasing 10-20 acres and putting up a few houses. Many of the more affluent towns now have a 2 acre minimum requirement for new housing so 20 acres means 10 houses, max.

Then you have people who purchased property and find a custom builder.

All in all, it adds to New England's charm and is hard to replicate in other growing areas of the country such as the south.

[Hatless Wonder]

He said he bought his first home I 1972 for about $18,000.00 in billerica

My parents' bought their first home, in Mattapan, for $15,000 in 1975. It's now worth about $315,000. Of course, it's still in Mattapan.

[findingmesomeday]

Originally Posted by Hatless Wonder

He said he bought his first home I 1972 for about $18,000.00 in billerica

My parents' bought their first home, in Mattapan, for $15,000 in 1975. It's now worth about $315,000. Of course, it's still in Mattapan.

Now that's telling. Over $300K for a home in what's considered to be NOT a desirable area, to put it mildly.

[skytrekker]

I think the tough zoning laws in New England limit the number of homes built- the poster above was correct about that.

Most towns here in CT would not allow the kind of mindless sprawl in the south or far west- The very unique identity of the region as 'New England' is something most want to keep. And that charm and identity is what draws people to the region for tourism and those tired of living in bland subdivisions and strips of big box stores and chain restaurants that exist elsewhere. A white steeple church, a town green and that 'Currier and Ives' image is priceless. Therefore the cost of housing is high for these so called 'house form and culture' intangibles.

California is high for other reasons; coastal California has a very benign climate- perhaps the most celebrated in the world- you pay a high tax and premium for the sunshine. Plus its 'California' and you pay for that 'glamor image' for better or worse.