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S&P Case Shiller Composite: Prices Up 9.3%

Growth continues to cool

20-city index shows yearly price growth dropped to single digits in May

Teke WigginStaff Writer INMAN NEWS

Yearly growth in U.S. home prices continued to slow in May, but still remained well above average.

The S&P/Case Shiller 20-City Composite Index showed prices rising 9.3 percent year over year in May, down from 10.8 percent in April. Annual price gains slowed in May for all cities tracked by the index besides Charlotte and Tampa.

Source: S&P Dow Jones Indices and CoreLogic
Source: S&P Dow Jones Indices and CoreLogic
Still, prices climbed 1.1 percent month over month in May, with all 20 cities posting monthly increases for the second straight month.

Tampa registered the highest monthly price gain (1.8 percent), followed by San Francisco (1.6 percent) and Chicago (1.5 percent). Phoenix and San Diego were the only cities to show monthly increases of less than 1 percent in May, with gains of 0.4 percent and 0.5 percent, respectively.

The picture changes when adjusting for seasonal factors.

After factoring in the spring’s typical influence on home prices, prices decreased 0.3 percent month over month in May, with only six out of 20 cities showing gains.

 

Home to seven of the top eight cities showing the most annual price growth, the Sun Belt continued to lead price gains.

Despite seeing their annual price growth decrease by 2 to 3 percentage points, Las Vegas (16.9 percent) and San Francisco (15.4 percent) still posted the largest annual price increases.

The other cities that showed double-digit annual gains were: Miami (13.2 percent), San Diego (12.4 percent), Los Angeles (12.3 percent), Detroit (11.9 percent), Atlanta (11.2 percent), Tampa (10.2 percent) and Portland (10 percent).

Expanding home inventory has helped cool home prices in recent months. Economists generally view the trend as favorable because it will keep prices from rising too quickly, which hurts affordability and reduces buyers’ options.

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5 Things To Know About Housing In 2014

A long but very interesting post from Housing Wire – from a national perspective – and while many of the fundamental issues do not directly reflect our local market performance…it is important to know as we  navigate our own real estate markets.

 

5 things to know about housing for the rest of 2014

See what housing insiders are saying

The future of housing for 2014 looks a lot different  than it did at the start of the year.

Either fundamentals have changed, or the evidence is getting so overwhelming that neither the most hopeful naiveté or calculating spin can cover it.

That’s not to say there aren’t bright spots, but marking the danger spots on the map is a lot more important than marking X on the buried treasure.

So here are five things to know about housing and where it’s going for the rest of 2014.

1) Luxury Sales Fly as Home Sales for the Rest Crash and Burn

Home sales among the 1%  look like they will beat last year’s numbers, and that’s about the only real bright spot in housing on the horizon, and the only thing looking positive for the rest of 2014.

Sales of the priciest 1% of homes are up 21.1% so far this year, according to Redfin. This follows a gain of 35.7% in 2013. Meanwhile, on the other side of the bridge, home sales in the remaining 99% of the market have fallen 7.6% in 2014.

It’s not that interest rates are usurious by any stretch. This is despite mortgage rates having dropped to their lowest level in more than six months. The 30-year, fixed-rate mortgage averaged 4.14% for the week ended May 22.

BlackRock CEO Laurence Fink said Tuesday that the housing market is “structurally more unsound ” than prior to the financial crisis due to its reliance on the government-sponsored enterprises of Fannie Mae and Freddie Mac.

“There are haves and have-nots, and the haves are the ones out buying,” Redfin CEO Glenn Kelman said.

2) Real Estate Investment Highly Uncertain

Concerns still linger over the state of residential investment, which contracted in both the fourth quarter of 2013 and the first quarter of 2014, as well as prices being driven up by investors rather than homeowners, and the growing affordability gap for buyers. The weak labor market means that the recovery is tenuous. Weak job growth and wage stagnation remain challenges for both housing and for the economy in general.

Federal Reserve Bank of Cleveland researchers Edward Knotek II and Saeed Zaman say there are three primary factors behind the recent slowdown in residential investment: the increase in mortgage rates since early 2013; the unusually cold winter; and a modest tightening of lending standards in the residential mortgage market.

The weather reason doesn’t really fly. As CoreLogic’s (CLGX) reported, past severe winters that have affected housing starts negatively were followed by a rebound after temperatures began to rise again. This analysis indicates there should be a rebound again this spring, but it will not be sufficient to counteract the current weakness in the market, which can’t be blamed on the weather.

Knotek and Zaman say the resumption of more normal weather and ongoing improvements in labor markets and the broader economy should allow for a rebound in residential investment. However, the researchers also note that the experiences of the past year highlight the strong interest rate sensitivity of the housing sector.

3) Investor Price Increases Push Housing Out of Reach

Home prices in the United States are just 12.8% off the 2006 peak, according to the comprehensive March home price index report from Black Knight Financial Services.

April home price data from S&P/Case-Shiller released on Tuesday, found slight increases for the month. The 10-city and 20-city composites recorded miniscule rises for March 2014, increasing .8% and .9% month-over-month.

Separately, the Federal Housing Finance Agency House Price Index found that prices continued to trend higher in the first quarter, and increased for the eleventh consecutive quarter, rising 1.3% in the first three months of 2014.

Housing affordability is being skewed by cash investors (increasingly) and institutional buyers (less so than last year) which are still accounting for almost half of all home sales. Until there is affordability, there cannot be a rise in first-time buyer participation. Which brings us to the next point.

4) Millennials Want to Buy but Can’t

DoubleLine Capital founder Jeffrey Gundlach said he is concerned that would-be young buyers are shunning mortgages even though all the evidence shows they want to buy rather than rent. So far, returning homebuyers havedominated the scene in 2014 because too many first-timers are dealing with mounting debt.

“The deferral of marriage has such a staggering impact on real estate and I just don’t think people focus on it,” said real estate investor Sam Zell, 72, whose Chicago-based Equity Residential is the largest U.S. apartment landlord. “I don’t think the multifamily market has ever had a better set of future demographics.”

Zell said he expects the Homeownership rate to drop as low as 55% from the current 35-year low, as more people delay marriage.

So what’s the good news? Now might be a good time to invest in apartments.

5) Mortgage Originations Fizzle

Mortgage originations are at their lowest level in 14 years and everyone is expecting that will only get worse as mortgage rates creep up.

Chris Flanagan, MBS/ABS strategist for BofA Merrill Lynch, said mortgage activity is going to underperform in 2014.

“We were expecting $1 trillion in gross issuance for the year (at the start of 2014.) We’re at about $200 billion now,” Flanagan said. “So we’re on track for $750 billion for the year, which is less than expected.”

He said credit remains a headwind for buyers.

“We came into this year knowing credit would be tight,” Flanagan said. “We hear anecdotal evidence that credit is loosening, but (when you consider mitigating factors to the anecdotal evidence) the end result is credit is still very, very tight.”

Flanagan said that while the FHA has lowered its threshold for FICO scores by 15 points, it hasn’t translated into increased mortgage originations.

It’s happening across the board. Bank of America (BAC) reported that its first-quarter mortgage originations fell 65% year-on-year in its earnings report. Wells Fargo (WFC) reported record net income of $5.9 billion, up 14%, or $1.05 per diluted common share, for first-quarter 2014, where as JPMorgan Chase (JPM) recorded a first-quarter 2014 net income of $5.3 billion, a drop from $6.5 billion in the first quarter of 2013.

Lawrence Yun, National Association of Realtors’ chief economist, noted in the most recent existing-home sales report from NAR, “Some growth was inevitable after sub-par housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point. Annual home sales, however, due to a sluggish first quarter, will likely be lower than last year.”

The housing market has improved since the financial crisis, but it’s not clear how strong that improvement is, given that so much of it is supported by intense government subsidies, protection and backstops.

Even Federal Reserve Chair Janet Yellen concedes that housing is no longer helping – it is hurting the economy.

“One cautionary note, though, is that readings on housing activity – a sector that has been recovering since 2011 – have remained disappointing so far this year and will bear watching,” she said. “Another risk – domestic in origin – is that the recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery.”

Further complicating matters is the conflict between regulatory pressures at cross-purposes – a push for an affordable housing mandate versus regulatory standards for debt-to-income ratios, QM mandates and so on.

That’s where things stand as the market crosses the halfway point on the calendar year.

Anthony Sanders, distinguished professor of real estate finance at George Mason University, sums up the problem by taking a step back from the details.

“True, credit is tighter than during the housing bubble, but average FICO scores on closed loans has been dropping,” Sanders says.“But the problem remains a slow recovery for the middle class in terms of employment and income. Of course, The Fed could speed up tapering and allow rates to rise (cutting off cheap funding sources to investors). As it stands, house prices are rising while affordability for the middle class is shrinking.”

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Fabulous Ink Block In Boston

great post by Scott!

From Tabloid to Hip Condos

Link|Comments ()Posted by Scott Van Voorhis

Location, location, location – that’s what real estate is all about. And the new Ink Block, taking shape where the South End meets Chinatown, has it in spades.

The glitzy glass-and-steel, six-building condo and apartment development is taking shape on Harrison Ave., where the big old brick red Boston Herald building stood until it was demolished last year.

As a reporter at the Herald back in the 2000s, the location couldn’t be beat. Need to get to Beacon Hill? No problem, that’s a 20 minute walk. Press conference in the Back Bay – be there in 15 minutes. Hungry? Let’s head across the street to Chinatown. Or for that matter, around the corner to the South End, a restaurant paradise. No car needed – just you and your two feet. (OK, I’m tall and a pretty fast walker, but still.)

That location, which was great for reporters, will be even better for the residents of the $500 million Ink Block, with the city and its attractions literally at their feet.

A total of six buildings are planned, each featuring a unique design inspired by the South End and intended to be an antidote to the Boston’s increasingly hard to tell apart bevy of new luxury condo towers, Ted Tye, managing director of National Development, tells me.

“There is so much being built in the city these days that is very generic – you can’t tell whether you are in the Seaport, the Back Bay, or the South End,” Tye says.

Final Sepia Hero Night.jpg

 

More than 60 percent of the units at the Sepia, the project’s 83 unit condo building, are already spoken for, Tye tells me. (Herald, Ink Block, Sepia – you get the theme.)

Prices range from $500,000 for a studio to over $2 million for a penthouse unit. The condos come with balconies large enough to actually recline in a chair and take in the city skyline, with a neat rooftop hangout spot, complete with an outdoor kitchen.

The developer’s initial proposal to build condos at the Herald site drew its fair share of skeptics a few years back, with condos still recovering from the downturn. Now demand is soaring, condos are hot, and Tye feels vindicated.

“On Sepia, the idea has been to create luxury condos and really take advantage of being in the South End,” Tye said. “We bet a couple years ago the condo market would come back. We took a risk.”

Beyond skyline views – the project is taking shape roughly where the Herald’s publisher once held court in a suite facing the city – some additional treats are in store as well for Sepia residents.

A 50,000 square foot Whole Foods is also taking shape at the site, along with a bevy of what will hopefully be some hip new restaurants, in keeping with the South End’s proud culinary traditions.

There are also some extra perks for residents, who can enter the store directly from the Sepia without going outside, and then head back up the elevator, groceries bags in hand, to their condos. Or they can take a plunge in the rooftop pool that is being built on the roof of the grocery store.

Three apartment buildings are well underway now, with openings planned for early 2015.
Named Ink Block One, Two and Three, each takes a different design theme from the South End. Ink Block Two, for example, will feature loft style units with a black and white color theme.

While the Ink Block is a great launching pad from which to explore Boston, the immediate area around the project wasn’t always much to write home about.

In fact, the old Herald, when it was standing, was an outpost of zaniness amid a no-man’s land of sprawling parking lots, a homeless shelter, and the occasional streetwalker.

But the streets around the emerging Ink Block are on their way to becoming a residential hot spot, with a number of projects taking shape in the area.

The Ink Block itself was deliberately designed with six different buildings in a bid to give the project more a vibrant neighborhood feel, Tye notes.

Stay tuned.

 

 

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Boston Values Rise Fastest Since 1987

Good Globe article.

Boston home values rise at fastest since 1987

By Chris Reidy

| GLOBE STAFF

Home values in Greater Boston rose 2.9 percent from March to April, the greatest monthly gain for the area since 1987, according to new S&P/Case-Shiller Home Price Indices data issued Tuesday.

The S&P/Case-Shiller Home Price Indices tracks repeat home sales. Other surveys, such as those issued by the Warren Group and the Massachusetts Association of Realtors, look at much wider segments of the market, and they often report data on a year-to-year comparison basis.

The S&P/Case-Shiller Home Price Indices looks at data for 20 metropolitan areas around the country, including Atlanta, Boston, Chicago, Los Angeles, and New York.

“Nineteen of the 20 cities saw lower annual gains in April than in March,” the S&P/Case-Shiller Home Price Indices said in its press release. “California (Los Angeles, San Diego, and San Francisco) saw their returns worsen by approximately three percentage points. Boston was the only city to see its annual rate improve.”

Boston’s annual rate went from 8.3 percent in March to 9 percent in April, the release said.

In a statement, David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said: “Near term economic factors favor further gains in housing: mortgage rates are lower than a year ago, the Fed is expected to keep interest rates steady until mid-2015, and the labor market is improving. However, housing is not back to normal: prices are being supported by cash sales, low inventories, and declining foreclosure and REO (real estate owned) sales. First time home buyers are not back in force, and qualifying for a mortgage remains challenging. The question is whether housing will bounce back before the Fed begins to tighten sometime next year.”

Chris Reidy can be reached at [email protected].

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Middle Market Towns Back

 

Interesting Boston.com post by Scott.

Middle Market Towns Hot

Posted by Scott Van Voorhis June 2, 2014

The spring market has been particularly choppy this year. Sales have stalled amid a shortage of listings that has left many buyers fuming. The up today, down tomorrow economy hasn’t help things much either.

And it has been an increasingly uneven real estate market as well. A few towns and neighborhoods are super hot, with double digit increases in sales and prices. By contrast, many other communities are seeing a falloff in either sales or prices, and, in some cases, both.

Not hot right now are a growing number of the more affluent suburbs, such as Hingham and Carlisle, which have seen both prices and sales fall off this spring.

Ditto for low income cities and urban neighborhoods, which, after starting to rebound after hitting bottom during the Great Recession, are starting to see prices deflate again.

But the middle market towns out there right now are the hot ones, posting big increases in both sales and prices this spring, according to April numbers recently posted by The Warren Group, publisher of Banker & Tradesman.

Towns seeing the biggest jumps in sales and prices this spring include:

Danvers: Median price rose 18 percent, to $377,500, while sales rose by more than 18 percent;
Dedham: Median price surged to nearly $400,000 – a 20 percent increase – while sales jumped 13 percent;
Barnstable: Median price jumped more than 35 percent, to $469,950, while sales soared nearly 41 percent;
Beverly: Sales up 42 percent while prices increased nearly 12 percent to $369,959;
Milford: Sales rose by more than 41 percent while the median price hit $270,000, an increase of more than 17 percent.
Norwood: Sales increased by more than 46 percent while the median price rose more than 9 percent, to $377,450
Wakefield: Median price jumped to nearly $420,000, or a 13 percent increase, while sales rose by nearly 10 percent;
Waltham: Median price hit $441,000, an increase of 11 percent, while sales jumped more than 17 percent.

 

 

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Upscale Towns – Falling Prices

Interesting post by Scott. The $1M+ market in Provincetown which is anchored by single family homes is performing somewhat differently with rising average sale prices but with fewer properties selling. Watch for a post this week on $1M + sales year to date.

Upscale Towns, Falling Prices

Posted by Scott Van Voorhis

After some torrid increases, home prices are taking a hit this spring in some upscale suburbs and urban neighborhoods across Greater Boston.

The elite top of the market, such as the Lincolns and the Cohassets, are doing just fine.

That is, with the exception of Cambridge, where sales of single- family homes are off 30 percent so far this year, while prices are down more than 20 percent, according to The Warren Group, publisher of Banker & Tradesman.

Rather, it’s that larger tier of affluent towns where signs of trouble are starting to pop up.

Just take Medfield. Curt Schilling recently slashed the price of his seven bedroom, 26 acre spread to $2.5 million – a cut of $500,000 – after years of on-and-off attempts to find a buyer.

But right now the one-time Red Sox star is chasing the market down, with the median home price in Medfield having fallen more than 5 percent this spring, to $545,000. (Check out an evening view of the Schilling homestead below – looks rather cozy for a 7,890 square foot manse.)

0430-curt-schilling-medfield-home-38-studios-rhode-island-1.jpg

A look at the latest Warren Group numbers for April is rather revealing. Other examples include:

Hingham: The median home price has dropped more than 9 percent, to $567,500, while sales are off 21 percent.

Orleans: Sales in this mid-Cape tourist town, home to Nauset Beach, were choppy to say the least, dropping by more than 35 percent. But that’s nothing compared to the median sale price, which plunged 41 percent to $432,025.

Carlisle: The median home price fell more than 10 percent, to $590,000, while sales are off nearly 39 percent.

Amherst: While sales were up, prices fell more than 8 percent to $312,000.

Newburyport: Sales were down 15 percent, while the median price fell more than 5 percent to $465,000.

Charlestown: The median price dropped by nearly 14 percent, to $645,000, while sales were off by 16 percent.

 

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MA Assoc Of Realtors Report For March

Always good to get the big picture statewide – our local markets are mirroring the statewide trends.

 

Massachusetts Homeowners started to Put More Homes on the Market in March with the Start of Spring

by | Apr 23, 2014
Prices up as closed sales down again in March compared to last year

March 2014 Sales Data

WALTHAM, Mass. – April 23, 2014 – The Massachusetts Association of REALTORS® (MAR) reported today that while a general shortage of homes for sale pushed sales down and prices up in March, the spring market is starting to come to life. For the second straight month homeowners have added more homes to the market than the same time last year. Condominium sales and prices were both up in March.

“While the market still needs more homes for sale – including both existing homes and new construction- the increase in new listings in March is a good sign,” said 2014 MAR President Peter Ruffini, regional vice president at Jack Conway & Co., in Norwell. “With home values on an upward trend, it gives homeowners the opportunity and incentive to take advantage of the current buyer demand and list their homes for sale.”

There were 2,698 detached single-family homes sold this March, which was down 11.5 percent from the 3,048 homes sold the same time last year. On a month-to-month basis, home sales were up 27.2 percent from 2,084 homes sold this past February. A significant increase in home sales from February-to-March is typical.

The median selling price for single-family home in March was $314,063 which was up 8.3 percent from $290,000 in March 2013. This is the 18th straight monthly year-over-year increase. On a month-to-month basis, the March median selling price was up 6.5 percent from $294,950 in February.

There were 1,264 condominiums sold this past March, an increase of 4.2 percent from the 1,213 condos sold the same time last year. Year-over-year sales of condominiums have gone up 26 out of the last 27 months. On a month-to-month basis, condominium sales were up 36.1 percent from 903 condominiums sold this past February. Similar to single-family home sales, a significant increase in condo sales from February-to-March is typical.

The median selling price for condominium in March was $300,154 which was up 11.2 percent from the $270,000 median price in March 2013. This is the 10th straight year-over-year increase. On a month-to-month basis, the February median selling price was up 5.3 percent from $283,000 in February.

Inventory and Days on Market: 
The inventory of single-family homes as of March 31, 2014 decreased 13.9 percent from March 2013 (16,691 listings in 2014 from 19,695 listings in 2013) which translates into 4.0 months of supply in March 2014.  This is down from 5.0 months of supply last year and flat from this past February.  This was the 25th straight month of inventory decreases.

The number of new listings added to the market of single-family homes in March increased 12 percent over the same time last year (7,110 new listings in 2014 from 6,347 in 2013).

The inventory of condominiums on the market in March was down 23.7 percent compared to the year before (4,733 listings in 2014 from 6,206 listings in 2013), which translates into 2.7 months of supply, which is down from 4.0 months in March 2013 and down from 2.8 months in February.

The number of new listings added to the condominium market in March decreased less than one percent (-0.8%) from March 2013 (2,651 new listings in 2014 from 2,672 listings in 2013).

Detached single-family homes stayed on the market an average of 122 days in March 2014 compared to an average of 140 days in March 2013.  Condos stayed on the market an average of 85 days, down from an average of 106 days in March 2013.  On a month-to-month basis, days on market for single-family homes was up from 121 days in February while condos were down from 98 days.

 

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Bad Combo

 

March review from Scott.

Bad combo: Rising prices, falling sales

Posted by Scott Van Voorhis

Home sales fell again in March, a bad omen for the spring market.

But right now it’s buyers who are taking it on the chin and sellers who are laughing all the way to the bank.

Home sales fell 11.5 percent this March compared to the same time last year, theMassachusetts Association of Realtors reports. The Warren Group, publisher of Banker & Tradesman, pegs the decline at a somewhat smaller 7.8 percent.

Yet both market trackers report a big jump in prices, a trend that has been going on for at least 18 months.

The median home price in Massachusetts rose 8.6 percent in March, to $315,000, according to the Warren Group, while MAR is reporting just about the same price, and an 8.3 percent jump.

So what gives?

The same old, same old we have been hearing about for the past year, too few homes for sale.

“The low inventory of single-family homes in the market is the primary cause of the decreasing sales activity,” said Timothy M. Warren Jr., chief executive The Warren Group, in a press release. “Motivated buyers, however, are eagerly bidding for the limited supply which accounts for the increasing sales prices. People want to buy homes before prices and interest rates rise further.”

 

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10 Most “Out Of Touch” Housing Markets

On the face of it this headline is dramatic, but all it refers to is the conforming loan limits throughout the U.S and their relationship to local market conditions. A very interesting perspective from Housing Wire and Trulia.

Trulia: 10 most out-of-touch housing markets

The vast divide in conforming loan limits and reality

April 28

As the whispers of housing reform start to grow into greater fruition, the topic of conforming loan limits is brought up as well.

In his latest blog, Jed Kolko, chief economist with Trulia, noted that the current system of conforming loan limits falls far short of reflecting the actual differences in local home prices and ends up favoring borrowers in lower-cost markets.

“The housing finance system – as well as other national housing policies – needs to serve a country where local home prices in some markets are 10 times as high as in others, and where local and state laws affect how much new construction is allowed, how long foreclosures take, and more,” Kolko said.

In the current system, the conforming system sits at $417,000. However, in 2008, the Housing and Economic Recovery Act granted “high cost area” higher conforming loans limits to reflect local price differences.

But as housing regulators markup the Johnson-Crapo housing finance reform bill on Tuesday, April 29, 2014, Kolko pointed just how the conforming loan limits fall short.

Using Trulia’s database of homes for sale, Kolko listed the top 10 housing markets with the highest share of for-sale homes above the local loan limit, showing just how out of touch conforming loan limits are.  

10. Boston, Mass.

Currently,  $470,350 is the conforming loan limit, while 30% of homes for sale are above the local loan limit.

Massachusetts

9. Oakland, Calif.

Right now 30% of homes for sale are above the local loan limit, with the conforming loan limit sitting at $625,500.

8. New York, N.Y.

The conforming loan limit sits at $625,500 for New York, with 30% of homes for sale above the local loan limit.

NYC

7. Middlesex County, Mass.

The city’s conforming loan limit weighs in at $470,350, with 33% of homes for sale above the local loan limit.

6. San Diego, Calif.

So far, the city’s conforming loan limit is  $546,250, with 33% of the homes for sale above the local loan limit.

5. Ventura County, Calif.

The conforming loan limited is $598,000, with 34% of the homes for sale above the local loan limit.

4. Orange County, Calif.

Orange County has a conforming loan limit of $625,500, with 38% of the homes for sale above the local loan limit.

3. Fairfield County, Calif.  

In Fairfield County, the conforming loan limit is $601,450, and 39% of homes for sale are above the local loan limit.

2. San Jose, Calif.

This city posted a $625,500 conforming loan limit, with 43% of the homes for sale above the local loan limit.

Bridge

1. San Francisco, Calif.

San Francisco posted that its conforming loan limit sits at $625,500. With a whopping 61% of the homes for sale above the local loan limit, it is the nation’s most out-of-touch housing market.

 

Brena Swanson joined the HousingWire news team in February 2013. Prior to serving HW in the role as Reporter and Content Specialist, Brena attended Evangel University in Springfield, MO.
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Will Success Ruin Boston?

Another interesting post by Scott.

Will success ruin Greater Boston?

Posted by Scott Van Voorhis

Boston is one of those hot cities increasingly favored by the global business elite.

It’s easy to gaze at all the posh new apartment and condo towers on the city’s skyline and wonder who can afford to live there, but the wealthy buyers just keep on coming, whether from the suburbs or from any number of distant lands.

We’ve got the best colleges and universities, one of the biggest concentrations of bio-tech and life science companies and talent in the world, and a thriving tech sector.

But success can come sometimes with a hefty price-tag, and rising real estate prices tops the list.

Writes Bynxers, a regular contributor to the comment board of this blog:

Eventually- the city will drown in its own success. Is it the natural evolution of a successful city? That only the wealthy can afford to reside there, and to “promote equality” affordable housing is put in place for those needing government subsidy, while no help or policy is put in place to assist the working class, middle class or even upper-middle class??

Right on, Bynxers. Too much success, unless treated properly, can prove to be a fatal disease.

The tendency is to keep on keeping on, despite diminishing and increasingly toxic returns.

Here’s more:

Hop in a plane and ride east for several hours to Europe or West to San Francisco. And behold, there you will see the future of Boston…..

Eventually- the city will drown in its own success. Is it the natural evolution of a successful city? That only the wealthy can afford to reside there, and to “promote equality” affordable housing is put in place for those needing government subsidy, while no help or policy is put in place to assist the working class, middle class or even upper-middle class??

Those original property owners are long gone: residents of Southie sold their triple deckers and now live on the South Shore…. Other neighborhoods have similar outcomes. Is this natural??? Is this the price of success???

I argue, in part, yes…. With a MAJOR “but” at the end….. Housing prices have been pushed up by artificial scarcity for years (atleast 20 or so). Not just in Boston- but eastern mass as a whole. Large lot requirements for single families, height restrictions and density restrictions…. its simple supply and demand. Now the city and state are just trying to catch up, but its too little too late.

There is no vindication at the end of this, no “gotcha” moment, no fairness, really. The middle class will have a choice: pay up or leave. There’s a constant new influx of young grads to fill the void for a while though and it will be a revolving door. Those born and raised here will likely stick it out. However, many will pack up and leave. The fate of the city and region at this point is more or less cast in stone, I’d assert.