3 Responses to “It Was a Good Decade for Home Prices. Really.” »»

1. rich
   Comment by rich | 02/24/10 at 4:23 am

   For the most part, home prices in the Boston area peaked in 2005/2006 and have decline a bit from then. Anyone who purchased a home since the peak is probably feeling some pain today. They have little to be cheery about.

   Most the price appreciation in real estate from 2000 to 2005 is of course due to financial engineering by the Federal government. Mortgage interest rates are about 30% lower today compared to where they were at ten years ago. This financial engineering has been good for real estate, but we have paid a terrible price with the financial meltdown of 2008. We also still don’t know how the meltdown and bailout efforts are going to turn out.

2. anon2
   Comment by anon2 | 02/24/10 at 4:36 am

   “That’s a big deal, given how many people (who don’t wind up as anecdotes in news stories) buy a house and live in it for 10, or 20, or 30 years”

   Except their sole counter-anecdote only applies to people who were lucky enough to have bought and sold at specific times (the beginning and end of the decade). Just shift that window 5 years and the picture will be completely different. How much do you want to bet that people who bought in the middle of last decade and sell in the middle of this one underperform inflation?

3. David
   Comment by David | 02/24/10 at 6:24 am

   The first comment seems misguided. While lower interest rates certainly made home ownership more affordable and thus increased the pool of buyers, it had little to do with the financial meltdown. By making loans to people who could not afford them the financial markets are the real culprit behind the accelerated run-up in home prices and their eventual collapse, The markets where burning evenly until the mortgage backed security industry turned to sub-prime borrowers, essentially stoking the fire with a very volatile fuel – high risk customers.

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