Boston: Things are different here
Dec 2010 09

While the national real estate market continues to suffer, things are quite better here in Boston, at least according to a recent study.

Zillow.com announced today that Bostonians have seen an increase of more than $10 billion in the value of their homes. This contrasts starkly with what’s going on, nationwide, where home values have dropped by trillions of dollars.

Using our housing market data from the first 11 months of the year, along with some forecasting for December, our research arm has calculated that U.S. homes are set to lose $1.7 trillion in values during 2010. That’s 63% more than the $1 trillion lost in 2009.

Since the peak of home values in June 2006, more than $9 trillion in values has come out of the housing market.

My interpretation of this is that Boston has succeeded for several reasons: 1) our economy is partially based on hospitals and universities – and both have continued to grow during this recession; 2) we did not see over-building during the 2000′s. Therefore, we didn’t see thousands of homes coming on the market due to foreclosure or any bargain-basement pricing (unlike Massachusetts in the 1980′s; and, 3) Many people were prudent when borrowing money to purchase homes, either by putting down big deposits or only taking out mortgage loans they could afford.

Mostly, because people have continued to be employed, they aren’t being forced to sell their homes. I read this week that the unemployment rate among college graduates is only 4.5%. Meanwhile, the nation’s unemployment rate is 9.8%.

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