Is the real estate party over? (Boston, Pepperell: mortgages, buying a house, job market)

[Whatsnext75]

'95 Claybourne St, Unit 95, Dorchester, MA
Purchased 10/26/2006 for $350,000
Sold 11/24/2008 for $230,000'

Wow i wonder why the sold...should have waited

[Partial Observer]

Originally Posted by Whatsnext75

'95 Claybourne St, Unit 95, Dorchester, MA
Purchased 10/26/2006 for $350,000
Sold 11/24/2008 for $230,000'

Wow i wonder why the sold...should have waited

It was a foreclosure.

[Steephill2]

Originally Posted by semiurbanite

Actually that is a gain because he would have spent over 150k in rent if he had rented instead. Sure he paid interest plus maintenance and taxes but that was surely less than the rent would have cost.

This is a dangerous observation/generalization. All situations differ. It depends on how much the cost of rental is in comparison. One site says it takes about 13k to properly upkeep a house yearly. Add on your real estate taxes, interest payments, and everything else along with the opportunity cost of both your time as well as the money you put down as your down payment (instead of putting it somewhere else that could give you better returns) and the result may differ.

Living with the parents is probably the best investment anyone can make!

[MikePRU]

Originally Posted by such sweet thunder

Hey, all the data comes form public records that are online and instantly accessible.

It does but I've seen plenty of data aggregators get it wrong.

Originally Posted by such sweet thunder

I would classify that as moderate to slightly above average growth. The value of money halves every 30 years due to inflation. That means you have to take off about 36% or so of that 50% -- leaving you with a real year over year growth of around 2-3%. That's quite a bit less than you'd get from an index fund.

And that's the bar I'm using when I say that the suburbs are probably not smart money in terms of an investment. How many towns do you expect to see a higher than 100% increase in property valuations over the next 30 years. I think you might get that in t-accessible "suburbs" like Brookline, Arlington, Cambridge, Melrose and Milton. But I'm not expecting that among non T-accessible suburbs.

I agree that the suburbs are not on the brink of a pricing collapse and probably will never be. My point is that I don't expect more than a handful of outlier towns to keep up with inflation and hit 100% growth over the next thirty years.

First, your comparison of home values to inflation or investment vehicles is really irrelevant. Everyone needs someplace to live. If you want to tell me it's smarter to rent than buy that's one thing but to tell me you'd rather invest your money in stocks & bonds than buy a house well . . . that leaves you homeless.

You're also doing a lot of speculating and guessing about where things may or may not be going. No one has a crystal ball and can tell you what's going to happen with 100% certainty.

Originally Posted by such sweet thunder

It doesn't seem like a tough game plan to figure out: find a lot/property less than half a mile from the T, build or renovate with an eye toward an eventual condo conversion; lock yourself into a 15 year buy/construction mortgage; break around even then slowly up your take; convert to condos and sell for a killing. That's what the private equity is doing in town. It's not investing in the suburbs because there's not money to be had there.

If it's so easy are you doing it?

Originally Posted by Partial Observer

It was a foreclosure.

Where do you get that from? There was no foreclosure deed recorded.

[Whatsnext75]

'Living with the parents is probably the best investment anyone can make!'

I know people have done this and it's definitely a short term thing where everyone was extremely happy when it was over.

[dpm1]

Originally Posted by Whatsnext75

'Living with the parents is probably the best investment anyone can make!'

I know people have done this and it's definitely a short term thing where everyone was extremely happy when it was over.

Yup, I am moving back in with my parents in the next 2 weeks and there is a pretty set in stone schedule. Have been renting and was house hunting but am going to move home to increase budget for a year. Plan is get married in a bit over a year, start looking again.

I am a bit nervous about it but the cash savings will be meaningful to my home buying. Fortunately they have a fairly large house.

[MikePRU]

Originally Posted by Whatsnext75

'Living with the parents is probably the best investment anyone can make!'

I know people have done this and it's definitely a short term thing where everyone was extremely happy when it was over.

The last time we moved we had sold our home pretty fast and hadn't found a place to go right away. We ended up living with my in-laws for 4 months. I'm sure they were happy to have their house back at the end and we were happy to have our own space.

[Partial Observer]

Originally Posted by MikePRU

Where do you get that from? There was no foreclosure deed recorded.

Maybe foreclosure was the wrong term here, but a right of entry and power of sale was recorded less than a month before the sale. Perhaps the lender authorized a short sale?

[mdovell]

I can tell you western Mass is ripe to rise with some of these sub 100K homes. There's a fair amount of a projects that are transit related or just jobs related that will make it easier to come and go.

Vermont is paying for the vermonter line which will take people from Burlington all the way down to DC.
CT is paying for a much higher expansion from Springfield to new haven. Going from six trips a day to 25 in the next 18 months. Union station will dramatically simplify transit by having one central area for springfields amtrak, peter pan bus, pvta bus and amtrak. The way it is now is this well I rather not use bad words.

Casino coming in, new Catholic school, rail plant, linen company etc. Matoon St looks like Cambridge but is probably 20-25% of the price. mattoon st springfield ma - Google Search

Northampton certainly benefits from more rail access as does Greenfield. Interest rates are going up and frankly if you get more for your money for a fixed cost it just makes sense to expand beyond the 128 belt. Sure some might say it is easier to hire people in Boston but that's the thing making things easier simply means you deal with more and thus it makes you deal with more work for yourself. How much more empty space and empty buildings are left to develop out of the Boston metro area at this point?

[Whatsnext75]

'How much more empty space and empty buildings are left to develop out of the Boston metro area at this point?'

There's quite a bit of area in Hyde Park but it seems like that's a part of Boston people don't want to live in. There is just lots of empty space, storage space I guess that could be turned into something but it's just sitting there. I hear people say all the time oh HP is too far out, yet I know plenty of people commuting to Boston from places like Pepperell, NH and RI! Other than that area there really isn't much else in Boston metro. The area is crammed.