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Not really the case in Fairfield County CT. The Stamford CT area is booming and didn't seem to be affected even during the 2008 & 2009 recession and in Greenwich especially near the NY state line around Armonk NY saw alot of new homes going up..
In the rest of CT (except for the shoreline towns along I 95 east of New Haven) probably yes but I stopped off in West Hartford driving to NYC recently and that area seems to be doing as well as the Metrowest region here in MA
Oddly enough going to NYC by driving to Stamford wasn't bad at all. The train was pretty clean, not that much more than the commuter rail and brings you to grand central. MBTA is really going to have to step things up if they want to eventually get trains from western ma to eastern. it's just easier to go to nyc.
By the way there's a HUGE difference between West Hartford, Hartford and East Hartford. Income is down going east. East looks like the Bronx in the 1980's (especially at night). TV's are used as lawn ornaments etc. West Hartford reminds me quite a bit of say..Hingham but obviously more urban.
"In theory this should work, but in reality it doesn't. Too many employers are still focused on 'face time.' And there is some legitimacy to wanting people to be working together, face to face. A teleconference just doesn't have the same impact as a live meeting. You are always missing that extra interaction - the extra bonding and the extra understanding that comes from just sitting in the same room with someone. On a teleconference, you often miss the subtle eyeroll someone gives when they've heard something asinine. You don't see their eyes light up when they've been intrigued. You don't make the same interpersonal connections that make working with someone really desirable and enjoyable."
Uh...no. Otherwise we wouldn't have the internet at all. Otherwise we wouldn't see Amazon become larger than Walmart. Sure sometimes there's the ability to add the "feel" as a sense of value but the reality is it's kinda a antique these days and not really sustainable. Are LP's coming back? A bit..but nowhere near mp3 downloads. To note I have meetings at work and frankly we already work with each other. We want to limit these meetings as much as possible. We have other things to do We don't really have that much time to hang around and network that much because frankly we are busy. Staffing has been cut and we have to make due with the time we have. We use plenty of email, smartphones, smart boards, GPS's etc. We cannot afford to do things the slow old ways anymore. When there are legal deadlines to get things done then we pretty much have to look at doing them faster rather than slower..and I'm in government There are conferences that have been turned into webinars. Why? Because it's the SAME content! I've attended training seminars that are out of Boston but telecast to western Mass. Why? Because it's the same content. You don't get anything extra at all for driving another 200+ miles.
"And Cambridge is always going to be in demand. There are employers who want to have a presence there just for the Kendall Square cache. Whether you think this is asinine doesn't matter -- that mindset exists, and it always will. Maybe not for everyone, but for a not insignificant number of companies."
That's what they also said with Newbury street until it faded. Just like there was a unique "new england" economically but that's gone. Bradless, Caldors, Ames, Lechmere, gradually it just became more like the rest of the US. It's not like Cambridge is remote or isolated or insulated from anything. If you want that try Burlington VT.
"In theory this should work, but in reality it doesn't. Too many employers are still focused on 'face time.' And there is some legitimacy to wanting people to be working together, face to face. A teleconference just doesn't have the same impact as a live meeting. You are always missing that extra interaction - the extra bonding and the extra understanding that comes from just sitting in the same room with someone. On a teleconference, you often miss the subtle eyeroll someone gives when they've heard something asinine. You don't see their eyes light up when they've been intrigued. You don't make the same interpersonal connections that make working with someone really desirable and enjoyable."
Uh...no. Otherwise we wouldn't have the internet at all. Otherwise we wouldn't see Amazon become larger than Walmart. Sure sometimes there's the ability to add the "feel" as a sense of value but the reality is it's kinda a antique these days and not really sustainable. Are LP's coming back? A bit..but nowhere near mp3 downloads. To note I have meetings at work and frankly we already work with each other. We want to limit these meetings as much as possible. We have other things to do We don't really have that much time to hang around and network that much because frankly we are busy. Staffing has been cut and we have to make due with the time we have. We use plenty of email, smartphones, smart boards, GPS's etc. We cannot afford to do things the slow old ways anymore. When there are legal deadlines to get things done then we pretty much have to look at doing them faster rather than slower..and I'm in government There are conferences that have been turned into webinars. Why? Because it's the SAME content! I've attended training seminars that are out of Boston but telecast to western Mass. Why? Because it's the same content. You don't get anything extra at all for driving another 200+ miles.
You're either intentionally throwing in a red herring or you don't understand the point at all. I don't know that a full explanation is going to do much good, nor do I have the time to explain, but I'll say that "the internet" is not the same as being able to work remotely. Amazon.com has nothing to do with this, unless you have some knowledge of Amazon corporate's policies for their employees and relate them to the discussion here.
Yes, email, webinars, etc. are great and they do a lot to enhance the workplace and are invaluable as a supplement. And attending a meeting remotely is certainly better than not attending at all, which is what would have happened a few dacades ago. But it's still not as good as attending in person. You can argue that places have too many meetings, but that's another issue. (And maybe you haven't encountered bosses and companies who still believe that people working at home aren't actually working, and you are very lucky. Unfortunately, there are many of them out there. Whether it's logical or not, that mindset is out there.)
Quote:
"And Cambridge is always going to be in demand. There are employers who want to have a presence there just for the Kendall Square cache. Whether you think this is asinine doesn't matter -- that mindset exists, and it always will. Maybe not for everyone, but for a not insignificant number of companies."
That's what they also said with Newbury street until it faded. Just like there was a unique "new england" economically but that's gone. Bradless, Caldors, Ames, Lechmere, gradually it just became more like the rest of the US. It's not like Cambridge is remote or isolated or insulated from anything. If you want that try Burlington VT.
Again, this is irrelevant. The retail landscape and people's shopping habits are not the same issue as working environments. That said, you'll never see the complete obliteration of bricks and mortar stores. There is no substitute for some items where you have to see and hold them before buying. And a shopping experience at a mall is very different from an online experience. There is a social interaction experience at a mall that doesn't happen online. Now, not everyone wants this experience, but there are plenty of people who do. There are enough people still going to malls that I do everything I can to avoid them on weekends because it's hard to find a parking space and the mall is way too crowded for my taste. So people are still shopping.
I don't understand your point about Cambridge. No, it's not remote or isolated or "insulated." I never claimed it was.
I didn't read through this thread, but I am sensing a bit of a housing bubble. Burlington MA is selling new McMansion style houses priced in the 1MM range where just a year or two ago they were priced at $800K or so. Granted, my town has improving school districts and is gaining a lot of new amenities and business, and that is probably driving the prices up somewhat. Living in the town for 17 years, this all seems fairly insane to me.
I didn't read through this thread, but I am sensing a bit of a housing bubble. Burlington MA is selling new McMansion style houses priced in the 1MM range where just a year or two ago they were priced at $800K or so. Granted, my town has improving school districts and is gaining a lot of new amenities and business, and that is probably driving the prices up somewhat. Living in the town for 17 years, this all seems fairly insane to me.
I'm also here in 01803 and see the trend of the tear downs and new homes in the $800K+ area. IMHO, there are builders with the 7 figure asking price but few are actually getting it but not much below it.
I've said in the past that the reason for the rising prices in Burlington is due to a couple of things:
- the rising prices in Lexington and Winchester are driving people to Burlington in order to get a home that would cost 30% more in those towns
- the realization that Burlington is much more than Mall Rd. and Middlesex Tpk commercial districts and that the long term value of the town is much greater than other more expensive towns.
I'm not denying that certain markets aren't inflated ... merely suggesting that people should not conflate "bubble" and "pop". Much of eastern MA's economy is driven by high value services/goods. Healthcare and higher ed doesn't grind to a halt during a downturn, but start up capital might. Might Boston RE prices stagnate or decline in the near term? Yes, but those hoping for a skid will likely be disappointed because, spoiler alert, a decline which affects Boston will be global and money will have to find a safe harbor.
I don't think New Englander is off the mark and was not directing my "delusional" statement towards him/her.
No offense taken, Shrewsburried.
My point is that real estate should be purchased with caution and primary residences should not be seen as an "investment" where the expectation is that prices will continue to appreciate. If, for example, there is a downturn and housing prices decline in greater Boston for the next 5 years, how many people can weather that storm? Not many based on the data that I am seeing from the Warren Group/Corelogic.
I love and believe in Boston -- it's my hometown and would like to see it continue to thrive, however the fact is that middle class, first time homebuyers budgets continue to be stretched thinner -- which leads me to believe that a number of homebuyers are in tenuous financial position. I hope people are proceeding with caution.
My point is that real estate should be purchased with caution and primary residences should not be seen as an "investment" where the expectation is that prices will continue to appreciate. If, for example, there is a downturn and housing prices decline in greater Boston for the next 5 years, how many people can weather that storm? Not many based on the data that I am seeing from the Warren Group/Corelogic.
I love and believe in Boston -- it's my hometown and would like to see it continue to thrive, however the fact is that middle class, first time homebuyers budgets continue to be stretched thinner -- which leads me to believe that a number of homebuyers are in tenuous financial position. I hope people are proceeding with caution.
PS: I am a "he"
I'll agree with you that COL as a portion of income has increased beyond traditionally "comfortable" levels, and low interest rates have surely encouraged greater spending ... but does this translate to a "bubble"? Or, is it representative of the America's urbanization? The rural areas of this country (and state) are being gutted as the educated with a high earning potential move towards urban centers with good job access. With eastern MA being both an education and job center, it would seem logical that prices would go up with increased demand/pressure from high income earners. And really, if high income earners are spending 40%+ of their income on housing, is that an issue? There are certain costs, such as food, utilities, transportation, which remain relatively constant regardless of income and represent a much higher burden on the lower and middle classes.
I'll agree with you that COL as a portion of income has increased beyond traditionally "comfortable" levels, and low interest rates have surely encouraged greater spending ... but does this translate to a "bubble"?
This consideration for the bubble comes from multiple (sometimes cash) offers over asking, driving up to an open house/seeing a 100+ buyers on hand, buyers waiving home inspection/financing contingencies, and the expectation that they need to “get in before they are forever priced out.” To be fair, there is a huge pent up demand in the Greater Boston area due to the lack of construction, NIMBYism, population growth as a result of an excellent jobs market etc. that should be considered a valid contributor towards this phenomenon.
Or, is it representative of the America's urbanization? The rural areas of this country (and state) are being gutted as the educated with a high earning potential move towards urban centers with good job access. With eastern MA being both an education and job center, it would seem logical that prices would go up with increased demand/pressure from high income earners.
This is cyclical. Before WWII and the advent of the automobile, urbanization was at a fairly high level. Post war, preferences for houses with a decent yard, low interest rate government backed mortgages all contributed towards suburbanization. White flight emptied out city centers, jobs moved to the suburbs and people preferred to live in the burbs which exemplified the middle class. While you are correct in stating that the rural to urban/suburban migration has accelerated – this is all due to tastes/preferences towards urban areas. If they shift yet again in the next 5-10 years, then you will see different picture emerging. There are no guarantees that one area will forever remain hot. Will a property in Wellesley, Cambridge do well relative to other areas? Sure. However if the Greater Boston area market is down 25% and those desirable areas are down 10%, it’s still a decline – more so if you are a high income earner looking to sell the house due to a job loss/business decline.
And really, if high income earners are spending 40%+ of their income on housing, is that an issue? There are certain costs, such as food, utilities, transportation, which remain relatively constant regardless of income and represent a much higher burden on the lower and middle classes
Sure, until that high income earner or his/her partner loses their high paying job and has difficulties finding another one due to a down jobs market or his/her business fails due to lack of sales. Then what? Unless they have reserves and have not financially stretched themselves too thin, that house becomes a candidate for short sale or falls into foreclosure.
For the recent few years, I have been investing outside of Greater Boston as I saw the price momentum swinging the other way. Of course, my focus is investments not necessarily a home for myself, therefore my metrics on ROI, Cap rates, IRR are different than the average home buyer – however the point remains the same: You should buy a property like an investor. What does this mean? Make sure that you have 6 months of PITI (Principal, Interest, Taxes and Insurance) in the bank, make sure that you can rent the property (in case you have a job transfer or another life event) and be able cover the PITI + related costs, and most of all, not get caught up in the emotional frenzy.
The properties that I purchased in Boston during the 2008-2011 are all seeing double digit, and, in one case, triple digit increases in value. While this puts a smile on my face, I realize that this equity gain is only on paper. The monthly cash flow from those rentals is very real and has funded my RE expansion throughout New England.
My point is that real estate should be purchased with caution and primary residences should not be seen as an "investment" where the expectation is that prices will continue to appreciate. If, for example, there is a downturn and housing prices decline in greater Boston for the next 5 years, how many people can weather that storm? Not many based on the data that I am seeing from the Warren Group/Corelogic.
I love and believe in Boston -- it's my hometown and would like to see it continue to thrive, however the fact is that middle class, first time homebuyers budgets continue to be stretched thinner -- which leads me to believe that a number of homebuyers are in tenuous financial position. I hope people are proceeding with caution.
PS: I am a "he"
Simple concept, but very few people understand. Homes are for living in. Not for withdrawing money from.
What people also don't realize is that it takes very little to drive prices of any over-bid commodity down very quickly. A relatively small number of people who have to sell at distress and have to chop prices, for example, can drive a market down. Just a very small difference in supply vs. demand at the going rate drives the going rate down fast.
I don't know what will trigger the next drop. Some possibilities could be a sharp rise in interest rates (certainly doesn't appear in the cards soon), a stock market drop making people feel that their total wealth has gone down, a relatively small rise in unemployment (how many people in this area, who are in houses at or below the median price, could keep going for a year with one job loss, without defaulting? I bet it's a lot fewer than half.) But I am confident there will be a next drop.
There's also a misconception that perpetually rising house prices are somehow a good thing, which is not actually true. If you think of your primary residence as an investment, how are you going to take the money out of it that its paper value implies you have gained? You have to sell it, and then you have to buy another house. Unless you are prepared to downsize or move to a dramatically different area, you have not made money on your investment, not really. A real investment is one where you can cash it out and spend every dime of the money left over after retiring any debts associated with when you bought it. Can't do that with your primary residence. On the other hand, people of relatively modest means are progressively priced out of the "hot" areas, and eventually this creates a desire to get out, especially among late 20-30s who want to start families and have houses, not share a tenement apartment with four other people.
[b]
The monthly cash flow from those rentals is very real and has funded my RE expansion throughout New England.
I fundamentally agree with you and when purchasing my own home, essentially adhered to your financial advice ... but your last sentence really differentiates you from the average buyer. For a non-investor such as myself, I either buy a home or pay rents that, even in downturns, continue to go up. The most significant jump in rent I saw occurred at the bottom in '09 as occupancy rates increased, driven by both cultural preference and a pause in risk taking. Do I think rents and home prices will continue to accelerate over the long term? No, but rents likely won't decline much if demand continues to exist or accelerate. Home prices? Who knows?
I've dabbled with the math and after 11 months we could sell and break even with renting, including RE transaction costs. After 2 years, we could likely sell at a 11% loss (from purchase price, not market) and break even with renting. After 5 years, we could eat 32% ...32%! and break even with renting. Unexpected maintenance may drive down those percentages, but it's a known risk I'm willing to take. In short, while I prefer to think like an investor, I also need to think like a consumer of housing and buying a SFH which may stagnate or decline in value is still the logical financial decision over renting when my SO and I intend to live in the area for an extended period.
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We don't really have that much time to hang around and network that much because frankly we are busy. Staffing has been cut and we have to make due with the time we have. We use plenty of email, smartphones, smart boards, GPS's etc. We cannot afford to do things the slow old ways anymore. When there are legal deadlines to get things done then we pretty much have to look at doing them faster rather than slower..and I'm in government 
There are conferences that have been turned into webinars. Why? Because it's the SAME content! I've attended training seminars that are out of Boston but telecast to western Mass. Why? Because it's the same content. You don't get anything extra at all for driving another 200+ miles.
