Newton housing bubble?
For a few years I have been thinking, how long can the rise in local housing prices continue? Newton and Waltham, and for that matter, the entire eastern Massachusetts region, is collectively an attractive place to live, has lots of career opportunities, attracts thousands of new residents every year, and has a limited supply of undeveloped land on which to build new housing. On a strict supply-and-demand argument, it would seem that the sky's the limit for local housing prices.
On the other hand, there has to be a cutoff point, at which people say, it does not make sense for me practically or as an investment to buy that house at that price, considering the amount of money my family has now, and will make in the future. When one considers that the monthly mortgage obligation for a young family buying a single family home in Waltham or a condo in Newton will likely be over $3000, and rental prices are half that, the choice of whether to rent or buy becomes much clearer.
I think prices have reached that threshhold. I have noticed in Newton particularly that there are lots of properties on the market that have "for sale" signs for months, and I know some people in Newton who had to lower the asking price on their house by $50,000 and still it hasn't sold. On Parmenter there is a string of attractive houses and condos with "For Sale" signs, and one or two on Falmouth Road, too. An oversupply, or is this just the traditional house-hunting season with a lot of turnover?
In Waltham, two houses in our borderline neighborhood sold within a week or two of being put up for sale, but prices here are lower, and there is a lot of competition for detached single family homes near Boston and 128 that a young family, at a stretch, can buy. A young family with similar assets ten years ago could have bought something in Newton, but not anymore, so the houses on the other side of the border, on Parmenter and Falmouth, don't get as much interest.