Author: Barry Bluestone, Eleanor White, Noah Hodgetts, Michael Gleba, Nancy Lee, Monika Kondura, Tim Davis with assistance from Tracy Corley and William Reyelt
This report is the latest in the series of “Greater Boston Housing Report Cards” that began in 2002. Like past report cards, this 2013 edition probes Greater Boston’s housing landscape, keeping tabs on housing construction, home prices, and rents. It analyzes the relationship between the region’s economy, demography, and housing, and keeps track of federal, state and local government policies that affect the region’s housing market. This report also includes a new analysis of local zoning regulations in Greater Boston communities because of the critical role zoning can play, particularly in the development – or lack of development – of multifamily housing.
The 2013 Report Card attempts to answer six questions about Greater Boston’s housing market and its effect on the region’s well-being:
- What are the most recent trends in home sales, housing production, and foreclosures?
- What does the future trajectory of home prices and rents look like?
- Given current economic conditions, is another housing bubble on the horizon?
- Given Greater Boston’s changing demographics and economy, will housing production meet expected demand and help moderate future price and rent hikes?
- Are there still local zoning constraints hindering the production of appropriate housing stock for the region?
- What roles are the federal government and the Commonwealth playing in the housing market today?
The probability of another national housing price bubble is low due to several factors such as an increased supply of single-family homes created by empty-nesters who are looking to downsize. Also highly relevant is the younger generation’s weak demand for those homes due to its depressed income and high debt, as well as young people’s desire to live in denser, more village-centered places.
For the Boston area, however, housing prices and rents continue to rise as incomes for both homeowners and renters are either stagnant or in decline. On the supply side, developers are moving into high gear, producing near-record numbers of multi-unit housing. If that trend continues, and both Governor Patrick and Boston Mayor Tom Menino have promoted housing production, this will serve as a moderating influence on prices. Other factors that could help in this effort are zoning and regulatory reforms that would allow for smaller unit sizes and less mandatory parking, as well as more new housing for graduate students and young professionals.