Interesting read-Home buyers weary of Greater Boston prices are slipping south to Rhode Island (Worcester: insurance, buying a home)

[Dm84]

Originally Posted by OutdoorLover

The Amtrak train from Providence to Boston really is 1 hour. That's about the same as the MBTA commuter rail from Westborough, Gloucester, or Newburyport. So it may not be a convenient commute, but it's not a wild idea, and this place is a 5 minute walk to the Providence train station, so local transport on that end very efficient.

All the published times are under perfect ideal conditions. Ask any regular rush hour CR rider how often that really happens. You should plan on a substantial delay at least once or twice a week, sometimes more.

[MikePRU]

People being "pushed out" is not a new phenomenon by any stretch of the imagination. If you want urban living and you can't afford anyplace inside RT128 then Providence is probably the next logical place to look. Granted, some people would rather live in the 'burbs than have to commute that far. However, to some living conditions are more important than commute.

When the real estate market turns in the other direction (can't say when that's going to be but we've been in an upswing for a while now) I'd wager the people who are pushed out like this will be very upset that they didn't compromise more on their living situation. It's incredibly cliche but you should always remember the first three rules of real estate:

1. Location
2. Location
3. Location

The RI economy is just nowhere near as robust or stable as the MA economy even in good times. It's why they do ridiculous things down there to create jobs like give Curt Shilling tens of millions of dollars. I could have told you before they did it that was a bad idea!

[GeoffD]

Originally Posted by MikePRU

The RI economy is just nowhere near as robust or stable as the MA economy even in good times. It's why they do ridiculous things down there to create jobs like give Curt Shilling tens of millions of dollars. I could have told you before they did it that was a bad idea!

...or spend $24.3 billion in the big dig.

[yesmaybe]

Originally Posted by OutdoorLover

That's true, but for anyone driving a good distance to work, there is significant cost. Federal mileage rate (IRS) is up to 55 cents/mi. If you're commuting 30 miles each way to work, that's 300 miles/week, corresponding to $165/week.

I'd love to know how that is actually calculated, because it sure doesn't seem like the marginal operating cost is anywhere near 55c/mile. I believe it includes things like RMV fees and car insurance which you have to pay regardless of how much you drive. It is a lot though.

[OutdoorLover]

Originally Posted by yesmaybe

I'd love to know how that is actually calculated, because it sure doesn't seem like the marginal operating cost is anywhere near 55c/mile. I believe it includes things like RMV fees and car insurance which you have to pay regardless of how much you drive. It is a lot though.

I imagine that a lot is taken into account. The most obvious things that occur to me besides gas and tolls are maintenance costs, repair costs, and vehicle depreciation (asset value loss) will all increase with increased mileage.

[MikePRU]

Originally Posted by GeoffD

...or spend $24.3 billion in the big dig.

At least we have some roads and tunnels and the silver line to show for it. Have you been able to play Curt's video game?

[smc733]

Originally Posted by MikePRU

People being "pushed out" is not a new phenomenon by any stretch of the imagination. If you want urban living and you can't afford anyplace inside RT128 then Providence is probably the next logical place to look. Granted, some people would rather live in the 'burbs than have to commute that far. However, to some living conditions are more important than commute.

When the real estate market turns in the other direction (can't say when that's going to be but we've been in an upswing for a while now) I'd wager the people who are pushed out like this will be very upset that they didn't compromise more on their living situation. It's incredibly cliche but you should always remember the first three rules of real estate:

1. Location
2. Location
3. Location

The RI economy is just nowhere near as robust or stable as the MA economy even in good times. It's why they do ridiculous things down there to create jobs like give Curt Shilling tens of millions of dollars. I could have told you before they did it that was a bad idea!

Agreed 100%. People making "compromise buys" this late in the economic cycle will end up regretting it. Look at how little growth there has been outside of 495 relative to inside since the downturn, a testament of which properties will get hammered.

It's also very refreshing to come across a realtor that doesn't believe it's a linear path "to the moon" for real estate, and that downturns can and do occur.

[Shrewsburried]

Originally Posted by smc733

Agreed 100%. People making "compromise buys" this late in the economic cycle will end up regretting it. Look at how little growth there has been outside of 495 relative to inside since the downturn, a testament of which properties will get hammered.

The inside/outside 495 theory might not reflect reflect current reality.

The towns outside 495 access have largely "pumped" less, thus the "dump" should also be less ... maybe not in percentage, but certainly in real dollars. Additionally, the fact that homes in these towns are still largely trading within a reasonable income range, and being bought by long hold buyers, suggests gains have been sustainable, or sustainable within the context of low rates. Immune? No, I just think whatever the fall happens to be, the severity will be proportional to modest gains. For reference, my home in Sterling, which is ~15 minutes west of 495 and ~10min from rt. 2, is valued somewhere between it's 2003 and 2007 selling prices. Not much "pump".

I personally believe the high end housing within the 495 belt, and specifically within the 95 belt, will be worst hit next downturn as a significant portion of the capital used to inflate these towns was created by a QE-fueled bull market ... which had little reflection on the actual health of the publicly traded companies (see: pharma, see TSLA, see semi-conductors). When this cash cow dries up, you will see severe downward pressure at the high end of housing as earned incomes, assuming employment remains somewhat stable, largely cannot support current pricing. You'll notice that higher end housing in MA is already in decline.


Let's assume we're at or approaching the top of the market. Which asset would you rather be holding into a recession of unknown scale and duration? I'm speaking purely in terms of asset exposure.

A median SFH in Melrose? Or a median SFH in Groton? I'd take the latter as I believe both the percentage of decline and the real capital loss (on paper) will be less. People buying in towns like Everett, Melrose, Stoneham, etc. could very well lose their shirts depending on the severity of the next recession.

[yesmaybe]

The problem is that there is a mass move of what's left of the halfway decent jobs available to within Cambridge and Boston. Once that's complete it's going to be hard to live in a place like Sterling. So you should expect prices to implode there at some point, especially once GenX gets really old. Lets say another 10-15 years.

Within 128 really depends on how popular Boston remains with employers.

[Dm84]

Originally Posted by yesmaybe

The problem is that there is a mass move of what's left of the halfway decent jobs available to within Cambridge and Boston. Once that's complete it's going to be hard to live in a place like Sterling. So you should expect prices to implode there at some point, especially once GenX gets really old. Lets say another 10-15 years.

Within 128 really depends on how popular Boston remains with employers.

The world is changing and businesses are becoming more tolerant of working from home once or twice a week because they realize the commute is destroying their employees' lives, given how expensive it is to live anywhere near the office. Obviously this is far from universal but businesses that never would have allowed this a few years ago are rethinking their strategies.