Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
What scenarios in a 20-30 year time frame do you see Boston real estate declining in nominal terms? US 15 year treasuries are yielding less than 2% with no inflation protection. Boston real estate is basically an inflation protected risk free asset. It is expensive but remains a good value. It was a staggeringly good value 5 years ago, and it's still a good value now.
Buddy can you please tell be what you are on, and share some of it.
Boston is consistently ranked as among the most unaffordable cities in the country, housing costs to income ratio.
My local credit union still has rates under 3% on ARMs. 30 year fixed is a little harder to find under 3 from what I've seen.
When I checked earlier this week with some VERY reputable lenders they still had rates under 3%. There were definitely big banks I saw that had rates 3%+ even when other lenders were well below 3%. It's been a funny lending market since COVID started. Some lenders just don't want to lend at market rates or don't want to write certain instruments.
I guess I was imprecise. I was referring to 30 year fixed. The 10 year treasury has been above 1.6% for the last few weeks and that's usually a good way to see 30 year mortgage interest rate trends. Sub-3% with no points looks to be over. Look at a chart for UMBS 3.0. A 3% yield mortgage backed security from Freddie Mac is now $104.20. After Wall Street takes their cut, I don't see how a lender can offer a sub-3% 30 year fixed without some points.
Doesn't matter as long as people need to go to the office and Boston remains one of the most popular places in the country with employers.
A stock market crash, one way or another would certainly make it a lot harder to get the mortgage approved.
Meh. I can think of many scenarios where the factors that have been "sustaining" the market at artificial levels, either cease to exist or are severely diminished.
Meh. I can think of many scenarios where the factors that have been "sustaining" the market at artificial levels, either cease to exist or are severely diminished.
With the condo market, it would take a collapse of the rental market. As long as you can break even renting, you don't get the forced sales that drive the market down. We've covered the ground here a number of times. Tons of younger white collar professionals with an extremely low birth rate who are willing to pay the housing premium to live in the 'cool' place. Rents could collapse in the less desirable areas but a condo in Back Bay, Beacon Hill, Waterfront, or the better part of the South End is going to hold value because you'll always be able to command premium rents. I don't think the same math applies to a Chelsea or a Brockton. It certainly doesn't apply to my corner of single family home West Portugal. When interest rates go up, my property value is going to drop. My house isn't rare enough where summer people/telecommuters would keep the prices high though there is plenty of that kind of real estate in my town.
Meh. I can think of many scenarios where the factors that have been "sustaining" the market at artificial levels, either cease to exist or are severely diminished.
Sure, but does a Fed suddenly turning ‘hawkish’ or employers shifting to semi-remote trigger a decline or just cap growth?
IMO, I think the biggest near term risk for Boston RE is a future Fed which is less interventionist. Unlike the working class W2 towns which are fueled primarily by low borrowing rates, Boston RE growth has been fueled by equity gains post-‘09. Generous RSUs, tech unicorns, etc. Yes, many households can afford current pricing at current rates with just their W2 earnings, but this doesn’t necessarily remain the case in a rising rate environment.
Longer term risks are major disruptions in healthcare, higher ed, climate, etc.
Pure speculation, of course. I also don’t see a ‘hawkish’ Fed in our future for many reasons.
Last edited by Shrewsburried; 03-28-2021 at 06:49 AM..
I guess I was imprecise. I was referring to 30 year fixed. The 10 year treasury has been above 1.6% for the last few weeks and that's usually a good way to see 30 year mortgage interest rate trends. Sub-3% with no points looks to be over. Look at a chart for UMBS 3.0. A 3% yield mortgage backed security from Freddie Mac is now $104.20. After Wall Street takes their cut, I don't see how a lender can offer a sub-3% 30 year fixed without some points.
Yeah 30 year fixed. That's what I meant by shady internet brokers, I guess you don't need to use Fannie or Freddie if you can find money that's that desperate for yield. Now you probably would need to put 20% down.
With the condo market, it would take a collapse of the rental market. As long as you can break even renting, you don't get the forced sales that drive the market down. We've covered the ground here a number of times. Tons of younger white collar professionals with an extremely low birth rate who are willing to pay the housing premium to live in the 'cool' place. Rents could collapse in the less desirable areas but a condo in Back Bay, Beacon Hill, Waterfront, or the better part of the South End is going to hold value because you'll always be able to command premium rents. I don't think the same math applies to a Chelsea or a Brockton. It certainly doesn't apply to my corner of single family home West Portugal. When interest rates go up, my property value is going to drop. My house isn't rare enough where summer people/telecommuters would keep the prices high though there is plenty of that kind of real estate in my town.
This does not account for the thousands of non-occupied units being utilized as investment vehicles, many of whom are foreigners from Asia. Downtown Boston rents are down significantly from a year ago. Those who bought at the top and now looking to rent out, I imagine aren't singing right now. We do not know what kind of desirability will be sustained for these areas in a post-Covid world. Nobody has a legitimate prediction for how any of these things will turn out down the road, it's nothing more than guessing.
Sure, but does a Fed suddenly turning ‘hawkish’ or employers shifting to semi-remote trigger a decline or just cap growth?
IMO, I think the biggest near term risk for Boston RE is a future Fed which is less interventionist. Unlike the working class W2 towns which are fueled primarily by low borrowing rates, Boston RE growth has been fueled by equity gains post-‘09. Generous RSUs, tech unicorns, etc. Yes, many households can afford current pricing at current rates with just their W2 earnings, but this doesn’t necessarily remain the case in a rising rate environment.
Longer term risks are major disruptions in healthcare, higher ed, climate, etc.
Yeah 30 year fixed. That's what I meant by shady internet brokers, I guess you don't need to use Fannie or Freddie if you can find money that's that desperate for yield. Now you probably would need to put 20% down.
I was looking at quotes on bankrate.com.
Do you mean websites like LenderFi and LoanDepot? What is shady about them?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
