The Boston Globe is out with a story about the high cost of housing in Massachusetts. As I have mentioned, previously, one of the major reasons housing is so expensive is because land is so expensive. That’s because, they aren’t making any land, anymore. (haha)
Just about everyone has an opinion on the subject of housing and housing costs.
The Globe’s reporters do a fair job of describing the situation, but make some crucial errors.
Unable to afford the third-most-expensive housing market in the nation, young people are moving away, costing Massachusetts the human capital needed for future economic growth.
While I agree that housing is expensive, there is little data to support that argument. There was one study out by Northeastern that attempted to draw a correlation between the two, but there is no other studies out there, that I’m aware of. It certainly makes sense that some young people would search out cheaper places to live, but we have not lost population. Yes, that may be because of immigration from out-of-country peoples, but I don’t think there’s data to support that, yet.
Meanwhile, with a median income of $85,000, a family of four in Massachusetts can afford to buy a home for around $250,000, said Aaron Gornstein , executive director of the Citizens’ Housing and Planning Association, a non profit advocacy group.
Somewhat inaccurate. If a couple (a “starter home” wouldn’t be for a family of four, for one thing …) was making $85,000, and decided to put a third of their income toward housing, that would come out to over $24,000. That’s $2,000 per month. That’s a $300,000 home, more depending on their down payment.
“To be able to afford a single-family detached home in the suburbs is unrealistic for the vast majority of younger families,” Gornstein said.
Face reality. A “starter home” in Massachusetts isn’t a home, it’s a condo.
And, while new construction may be high-priced single-family homes and condos, there are plenty of “starter homes” and condos in lower price ranges. New construction isn’t going to be “cheap” because it’s built on expensive land and it’s built up to code, today, with all the bells and whistles.
A “starter home” is a home two or three decades home, within 45-minutes of downtown Boston.
“We’d love to find a site where we could build duplexes, 1,800 square feet each, and put them on 10,000-square-foot lots,” said Jeff Rhuda , business development manager for Symes Associates, a Beverly real estate developer . “You could sell that stuff all day long .”
Sure. But a 1,800 square foot home is not a “starter home”.
Until people start being practical, realistic, and honest, nothing will change.