Authors: Barry Bluestone, Chase Billingham, Jessica Casey, and Anna Gartsman, with assistance from Eleanor White and Tim Davis
For the last half of 2009 and first half of 2010, home sales and home prices continued to stabilize nationally as we predicted, with the average price for single-family homes holding steady across 20 of the largest housing markets in the country. This pattern also held for Greater Boston, which continued to outpace most other metro regions.
Unfortunately, during the spring and summer of 2010, there were disconcerting economic developments that saw the ranks of the unemployed nationwide continue to grow. On the housing front, through July of 2010, new home sales were running 8 percent below the same period in 2009 and 33 percent below 2008 levels while foreclosures and bank repossessions were at record levels.
These national trends are reflected in Greater Boston, although this is the first recession of the last three in which the Commonwealth’s economy is coming back from the depth of an economic crisis faster than the nation as a whole. Our unemployment rate remains lower than the nation’s and the rate of job creation since the beginning of this year is running at four times the national rate. On the housing front, Greater Boston’s home prices remain nearly 14 percent below their 2005 peak, but in a performance that appears to defy the gravity of the recession, rents are near their all-time high, making rental units less affordable than ever.
As in our previous seven annual reports, the 2010 Greater Boston Housing Report Card focuses on recent trends and patterns within the region’s housing market. However, in this one we explore in more depth a number of issues including the sharp rise in foreclosures, the continuing problem with rental affordability, the impact of Chapter 40B and 40R on housing production, the differential impact of the recession on single-family, multi-family, and condominium sales and prices, and for the first time we devote an entire chapter to student housing and its impact on the region’s rental market.
Overall, the state of housing in Greater Boston is in flux. The future largely depends on three factors:
- whether the national economy avoids a double-dip recession;
- whether or not the attempt to repeal Chapter 40B is successful; and
- whether universities, colleges, private developers, the state, and individual municipalities can work together so that we can welcome many more students to the region without driving up rents and reducing housing affordability.