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smiley

Data Needed, Please

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Hi,

My wife, who's American (from near Boston), is pressing me to buy, and believes that 'US house prices have never fallen in the past'. Is this true - in either nominal or real terms? Does anyone have a graph or chart setting out the historic data on US house prices? (Extra brownie points if anyone can get data on the North-East US especially!)

Thanks in advance,

Smiley

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Hi,

My wife, who's American (from near Boston), is pressing me to buy, and believes that 'US house prices have never fallen in the past'. Is this true - in either nominal or real terms? Does anyone have a graph or chart setting out the historic data on US house prices? (Extra brownie points if anyone can get data on the North-East US especially!)

Thanks in advance,

Smiley

I don't have any data I'm afraid. However, it does not make a lot of sense to talk about the US market as a whole. It is far more localised. If you want to focus your search for evidence the best place is probably looking at urban condos around 1990-93. A few anecdotes from older Americans lead me to believe that there was indeed a crash in this sector at that time.

I hear prices in urban Boston are crashing right now, by all accounts.

frugalista

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Extra brownie points if anyone can get data on the North-East US especially!

Okay, I have got a cracker for you.

I dug it out of a thread on the current "Boston crash" which I started a few weeks back.

http://www.benengebreth.org/housingtracker...husetts/Boston/

3 month inventory up 69.4%, 3 month median price down -14.8%!

That will be 500,000 brownie points please. :)

The same web site has stats on other US cities.

frugalista

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Hi,

My wife, who's American (from near Boston), is pressing me to buy, and believes that 'US house prices have never fallen in the past'. Is this true - in either nominal or real terms? Does anyone have a graph or chart setting out the historic data on US house prices? (Extra brownie points if anyone can get data on the North-East US especially!)

Thanks in advance,

Smiley

OK - don't touch Boston with a bargepole mate. Here's a joke from 1992 in Boston

Q: AIDS, Ghonorea, or a condo in Boston - which is the odd one out?

A: Ghonorea - you can get rid of it.

Boston is one of the 'overheated' markets in the US.

Take a look at this document - go to page 33 and you'll see 'Real House Prices' vs Year for many US cities and show multiple major cities such as LA, NY and Boston take a big hit in the 1989/90 slump. The US also had major crashes in the early 80s and early 70s.

Take a look at the prices in Boston that peaked in 89, bottomed in 1995, and didn't recover to their 1989 peaks until 2001 - buy in 1989 and you faced 12 years of negative equity! Imagine buying in 2006 and not being able to sell without paying the buyer until 2018.

http://www2.gsb.columbia.edu/departments/r...le09-2005-2.pdf

I'll try and find you a better chart than that one.

Here's a Boston Globe article on the 'House Price Slump'

http://www.boston.com/news/local/articles/...pers/?page=full

and another on rising property taxes in MA

http://www.boston.com/news/local/massachus...mass/?page=full

and on sellers cutting prices as market slows

http://www.boston.com/business/articles/20...g_market_slows/

The Boston Herald on landlords fearing a 'bloodbath' as speculators dump their properties

http://business.bostonherald.com/realestat...rticleid=116598

Newton MA sales drop 37% yoy http://www2.townonline.com/newton/localReg...rticleid=382965

This is also a very good website on the US housing bubble

http://thehousingbubble2.blogspot.com/

Don't let her do it to you mate - you can rent for half the cost of buying, and then pickup someplace at a reasonable price in a few years.

I've got some other links somewhere on the population drop in Boston, and the thousands of condos being built just now.

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Hi,

My wife, who's American (from near Boston), is pressing me to buy, and believes that 'US house prices have never fallen in the past'. Is this true - in either nominal or real terms? Does anyone have a graph or chart setting out the historic data on US house prices? (Extra brownie points if anyone can get data on the North-East US especially!)

Thanks in advance,

Smiley

http://finance.yahoo.com/columnist/article/futureinvest/1827

$500 billion in unsold inventory in the US. Worst ever.

I lived in CA in 1989 and sold our house just before the Great Crash for $374k. It was on the market 2 years later for $100k less. The Great Crash of 1989-95 saw house prices drop by around 30-40% in Southern CA.

The property tax crisis is far worse in CA than MA. In CA you pay 1.25% of purchase price. The average home is around $500k which means a tax bill of $7000 with HO dues etc added. The mean household income for SoCA is around $48,000. A price to earnings catastrophe.

Edited by Realistbear

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Here's the website you need

http://www.bostonbubble.com/

They have forums with lots of reference data - for example

http://www.edab.org/newsletter/Quarterly/q...eal_estate.html

This shows things like the last 3 house price crashes in the US (72, 80, 89), and the CA bubble 15 years ago.

Also lots of articles referenced at the bottom of the page.

I know many people here in California (I'm in Silicon Valley) whose wives twisted their arms into buying a place even though they knew it wasn't the best move financially - and boy do they regret it now. And if your GF says 'Prices have dropped 10% let's buy now!' remember the phrase 'Don't try to catch a falling knife'.

Good luck.

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