Have you have been wondering why it’s almost impossible to find a decent home at an affordable price in Greater Boston? A presentation made earlier this year by the Massachusetts Housing Partnership (MHP) to an elite group of state legislators explains what may lie at the root of the oppressively high prices and crushing lack of supply plaguing the metro Boston real estate market.
Greater Boston home prices at all time high
First, here’s where home prices stand in Greater Boston in 2017:
After a brief respite this spring, the relentless rise in home prices over the last 5 years has resumed. As tracked by the Case-Shiller Home Price Index for Greater Boston (seasonally adjusted), home prices now stand just shy of the all time high set earlier in 2017. With the Index reading for January 2000 set at 100, the current reading on the Index of nearly 201 means that Greater Boston home prices have doubled in the last 17 years. And that’s despite the intervening 2007 economic crisis and subsequent Great Recession that savaged real estate markets in Massachusetts and across the US.
MA economy booming while housing production languishes
While MA home values have soared since the Great Recession ended in 2012, the Massachusetts economy has been on a tear. According to the MHP report entitled “Housing Supply in the Commonwealth” the Bay State as added over 350,000 new jobs and gained over 245,000 additional state residents over the last 5 years! One would think that with home prices at all time highs and the state flush with lots of well paying new jobs and nearly a quarter of a million new residents, there would be a tidal wave of new housing starts rolling across the Commonwealth. In fact, as set forth in the MPH report, it’s just the opposite!
Economics behind decline in housing starts?
As shown in the chart above, housing starts in Massachusetts have been noticeably low for several decades. There are some economic factors that may have contributed to the cutback in housing supply. A speculative real estate bubble in Massachusetts during the 1980s burst catastrophically in 1989, triggering a near economic depression in the Commonwealth in the early 1990s. The collapse of “Condomania” as the craze was called back then, left 100s of abandoned, half built housing projects across the state and led to many Massachusetts bank failures. Lenders who survived the disaster became conservative in their new construction lending practices during succeeding years, restricting funding for housing starts in Massachusetts even as the economy recovered in the mid 1990s and early 2000s. In a touch of irony, the lack of speculative housing projects in Massachusetts actually helped the Commonwealth weather the economic crisis of 2007 and ensuing Great Recession better than many other US states. However, it seems obvious that conservative lending practices and economic downturns alone cannot explain the decades of insufficient housing starts in MA, which have left us with a severely dysfunctional housing market defined by outrageously high prices and woefully inadequate supply.
More insidious reason for lack of new housing starts in MA
According to the MHP report, there is one real cause of the pronounced decline in Massachusetts housing starts over the last few decades: local anti-growth zoning and permitting regulations.
Look more closely at the following enlargement of part of the image above . . .
As the MHP report so compellingly alleges, one acre lot size zoning is now the norm in the suburbs encircling Boston. Large lot requirements increase the price of land by lowering the allowed density of its use. This in turn makes affordably priced housing nearly impossible to build.
According the the MHP report, the widespread use of restrictive zoning and byzantine permitting regulations throughout Greater Boston has strangled housing starts for decades. For those already in place, the benefits of these anti-growth zoning and permitting regulations are real: your home’s value is protected because only very high priced new homes are allowed to be built and your community’s infrastructure and services are not stressed by any large influx of new, moderate income housing projects.
Richard Reeves, a Senior Fellow at the Brookings Institution, recently published an article on exclusionary (restrictive) zoning for RealClearMarkets.com.
In the piece, he makes the following very telling comment:
“Exclusionary zoning is a form of “opportunity hoarding” by the upper middle class, a market distortion restricting access to a scarce good (in this case, land), that restricts opportunities (such as good schools) to other children. Those upper middle class voters who oppose more mixed-use housing in their own neighborhoods are what I call “Dream Hoarders,” keeping elements of the American Dream for themselves at the expense of others.”
Unless the state legislature (called the General Court of Massachusetts) enacts housing laws aimed at liberalizing the anti-growth restrictions lurking in local zoning laws and permitting processes, Massachusetts renters and home buyers will continue to suffer though the sky high housing costs and dire scarcity that characterize the malfunctioning Greater Boston housing market.
Copyright ©2017 02038.com
You get more with Warren Reynolds than you do with other top real estate agents. You’ll find in Warren rare knowledge and experience dedicated to helping you achieve all the value that home brings. Warren has a law degree and 20+ years of home selling success in Massachusetts. — talk with Warren today! 508-561-6259
"We have now bought and sold five homes. By far, you have been the best realtor we have worked with. Your professionalism and knowledge are so valuable to your clients. You made this process so easy. "-CB
Make better decisions
and feel in control.
Did you know you can materially improve your home selling success by choosing your marketing agent and brokerage brand wisely? It’s true! A marketing agent with a sterling reputation, backed by a strong brokerage brand, will do wonders for the reception your home gets upon entry to market. Call Warren today! 508-561-6259
"As first time homebuyers we were fortunate to work with Warren. He was a great asset and sounding board. He always gave solid advice. Warren played a pivotal role in helping us negotiate with a difficult seller. We truly benefitted from having Warren in our corner and so will you." -JK
Maximize your home selling success.
Not only is Warren highly skilled and dedicated to protecting your best interests, he will be highly responsive to your needs! He CARES about his clients and is always, always there for them. Why not give it a try? Contact Warren now and see how well he takes care of you! – talk with Warren today! 508-561-6259
"I had many, many questions which Warren was always more than willing to answer with a never ending patience. Throughout the process Warren looked out for my best interest. I may have purchased a garden style condo but Warren treated me like I was purchasing a million dollar estate!" -MP
Get the attention you deserve.
Warren is a very creative real estate practitioner and he uses that creativity in ways that provide important advantages to clients. Creatively runs in Warren’s family! His uncle was Harnett T. Kane, an internationally-recognized investigative journalist and New York Times best-selling author of thirty books about the American South. Experience Warren’s refreshing difference today! 508-561-6259
"Your creative approach to all aspects of my move helped make the transition easy and pleasurable. You were recommended to me by a friend who appreciated your integrity, expertise, friendliness and conscientiousness - qualities that I have witnessed in abundance as we've worked together." -KB
Get creative with Warren.
Warren is a highly dedicated professional in all his real estate dealings. That means he will continue to serve you well, even when others would compromise on their commitments. Warren’s ultimate goals in business are better transactions and greater client satisfaction. Talk with Warren today! 508-561-6259
"As first time homebuyers we were fortunate to work with Warren. He was a great asset and sounding board. He always gave solid advice. Warren played a pivotal role in helping us negotiate with a difficult seller. We truly benefitted from having Warren in our corner and so will you." -JK
Maximize your home selling success.
All real estate agents are legally and ethically bound to be fiduciaries acting in their client’s best interests. His name stands for integrity and he takes his fiduciary duties to you very seriously. He’ll steadfastly put your interests first throughout your home purchase or sale – talk with Warren today! 508-561-6259
"Warren was always there for us. Throughout the process, Warren kept on top of all our concerns. Warren worked for us, and looked out for our best interest. He is a very professional and caring person." - BP
Feel safe and well taken care of.
Warren is a highly dedicated professional in all his real estate dealings. That means he will continue to serve you well, even when others would compromise on their commitments. Warren’s ultimate goals in business are better transactions and greater client satisfaction. His devotion to excellence can demonstrably improve your home buying and selling decision-making and, consequently, your experience of home ownership. Warren constantly stays current on the local housing inventory. And he is conversant with the broader market trends that affect home sales statewide link to Market Updates. Warren knows that the market knowledge he works so hard to maintain and his high standards of real estate practice help him achieve for you the lasting, true value of home ownership. Talk with Warren today! 508-561-6259
"Warren was the finest real estate agent we've ever worked with. This was evident to us in comparison to quite a few realtors we attempted to utilize, as they were not very helpful, understanding or willing to work with us based on our preferences." -SM
“If you think it’s expensive to hire a professional,
wait until you hire an amateur.” Red Adair
Did you know you can materially improve your home selling success by choosing your marketing agent and brokerage brand wisely? It’s true! A marketing agent with a sterling reputation, backed by a strong brokerage brand, will do wonders for the reception your home gets upon entry to market. Warren is known in the local brokerage community as a dependable, highly skilled professional who is a straight-shooter. Other agents like working with Warren because they know they can trust him to be a reliable partner in any transaction. And the Berkshire Hathaway HomeServices brand stands for sound decisions and extraordinary strength and stability. The “Forever Brand” brokerage created by Warren Buffet sets the standard for the real estate industry by focusing not on selling more homes, but rather on selling homes for more!Call Warren today! 508-561-6259
"As first time homebuyers we were fortunate to work with Warren. He was a great asset and sounding board. He always gave solid advice. Warren played a pivotal role in helping us negotiate with a difficult seller. We truly benefitted from having Warren in our corner and so will you." -JK
Maximize your home selling success.
Not only is Warren highly skilled and dedicated to protecting your best interests, he will be highly responsive to your needs! He CARES about his clients and is always, always there for them. In person, by phone, email or text, whenever you need him, you’ll get a prompt response from Warren! Warren’s clients rave about the high degree of consideration and attention they get from him. Why not give it a try? Contact Warren now and see how well he takes care of you! – talk with Warren today! 508-561-6259
"I had many, many questions which Warren was always more than willing to answer with a never ending patience. Throughout the process Warren looked out for my best interest. I may have purchased a garden style condo but Warren treated me like I was purchasing a million dollar estate!" -MP
Get the attention you deserve.
Warren is a very creative real estate practitioner and he uses that creativity in ways that provide important advantages to clients. Creatively runs in Warren’s family! His uncle was Harnett T. Kane, an internationally-recognized investigative journalist and New York Times best-selling author of thirty books about the American South. Warren employs his own creativity by producing compelling marketing, both in print and especially online! His www.02038.com, is a highly effective website promoting the wonderful lifestyle afforded by the Town of Franklin, MA. And his Market Updates content on Massachusetts real estate trends gives home buyers and sellers alike the context they need to make more informed decisions about their housing investments. Warren frequently uses his abilities to devise resourceful solutions to the diverse challenges that threaten to complicate most real estate transactions. Warren has made real estate his career and won many sales awards in his 20+ years in brokerage, including the highly prestigious Chairman’s Circle Gold Award and the elite Centurion Award. Experience Warren’s refreshing difference today! 508-561-6259
"Your creative approach to all aspects of my move helped make the transition easy and pleasurable. You were recommended to me by a friend who appreciated your integrity, expertise, friendliness and conscientiousness - qualities that I have witnessed in abundance as we've worked together." -KB
Get creative with Warren.
You get more with Warren Reynolds than you do with other top real estate agents. You’ll find in Warren rare knowledge and experience dedicated to helping you achieve all the value that home brings. Warren has a law degree and 20+ years of home selling success in Massachusetts. His legal knowledge and decades-long experience in putting — and keeping — real estate sales together give him a better handle on the legal, practical and emotional dynamics of the real estate transaction. Warren uses these skills to empower clients to achieve more! He often anticipates and resolves problems BEFORE they can become serious impediments. Enjoy the sense of trust, security and control that comes from having a highly skilled expert at your side — talk with Warren today! 508-561-6259
"We have now bought and sold five homes. By far, you have been the best realtor we have worked with. Your professionalism and knowledge are so valuable to your clients. You made this process so easy. "-CB
Make better decisions and feel in control.
All real estate agents are legally and ethically bound to be fiduciaries acting in their client’s best interests. But many agents give their fiduciary duties short shrift in their quest for the quickest and easiest path to a closing. Not Warren Reynolds! His name stands for integrity and he takes his fiduciary duties to you very seriously. He’ll steadfastly put your interests first throughout your home purchase or sale. This may make Warren work longer and harder for you than most other agents would. But ultimately, Warren’s diligence and attention to detail is his commitment to an experience that transcends the sale. He wants you to have the confidence and peace of mind that comes with having a true fiduciary protecting you. Discover the difference of working with an agent who does not view you as just another opportunity for a commission – talk with Warren today! 508-561-6259
"Warren was always there for us. Throughout the process, Warren kept on top of all our concerns. Warren worked for us, and looked out for our best interest. He is a very professional and caring person." - BP
Feel safe and well taken care of.