Comments on: Remember the Housing Bubble?

By: Chris G

Chris G — Fri, 09 Mar 2012 04:32:40 +0000

I just re-read the article. There on the first page: median household income in Athol is $43k, state median is $63.5k. Hard for me to see how median home price will exceed $200k any time in the near future. Median price is now $286k. If I were a betting man, I’d bet negative equity share fraction will increase considerably in coming years.

By: Chris G

Chris G — Fri, 09 Mar 2012 03:43:59 +0000

There was a good article in the Boston Globe several weeks ago on real estate prices in central MA. Prices are more or less holding steady in the well-to-do western suburbs of Boston but are in the tank once you get an hour or so to the west. Here’s the link:

http://articles.boston.com/2012-02-15/realestate/31063888_1_home-values-housing-boom-prices

I grew up not too far from Athol. Thirty years ago light manufacturing and farming played a significant role in the local economy. Both are significantly down from what they once were and the jobs that have replaced them – to the extent that they’ve been replaced – tend to be lower end in terms of pay and benefits. I have a hard time imagining that housing prices in central and western MA will rebound until the jobs outlook – more specifically, the salary outlook – improves.

A back of the envelope calculation:
What was the rule of thumb? You can afford a house 3x your annual salary? For median income in that region I’ll guess $15/hour * 2000 hrs/yr = $30k/year. Figure a two income household and that’s $60k/year median household income. So maybe the market will support $180k median sales price. But the $60k/year household income estimate seems optimistic to me though. My guess is the $100-150k is closer to what’s sustainable under current conditions. Contrast that with >$500k for a starter home in the Boston burbs.

By: Chris G

Chris G — Fri, 09 Mar 2012 02:16:19 +0000

That’s encouraging. Can you point me at where to look for additional detail? The MBTA (Boston-area public transit) is a mess financially. (I believe the source of the problem is that they were saddled with Big Dig debt by our legislature.) Talk up until very recently was of deep service cuts and steep fare increases. The powers that be appear to have scaled back suggested service cuts but significant fare increases appear likely. It would be very helpful to have some examples of how other areas have made their systems work (financially) while we try to work out a solution here.

By: Michael

Michael — Fri, 09 Mar 2012 00:34:34 +0000

There is so much blame to go around.

By: Chris G

Chris G — Thu, 08 Mar 2012 23:48:20 +0000

Two things:

1) The numbers for the sand states are grim. Makes me think of Sam Kinison’s (cruel) line about Ethiopia, “We have deserts here too. We just don’t live in them!”

2) Have you checked to see the extent to which the NEGEQSH > 0.4 data are leverage points? Just curious. Looks like you’d get a steeper slope and intercept near zero without them.

By: Jean

Jean — Thu, 08 Mar 2012 17:02:58 +0000

Does that mean I get to blame Greenspan after all?

By: Kenneth D. Franks

Kenneth D. Franks — Thu, 08 Mar 2012 14:08:16 +0000

Texas, if my information is correct, lost about 18,000 public education employees for Fall 2011 / and Spring 2012. Because of our growing population we actually needed 14,000 more teachers / support staff to keep class size from increasing and continue remedial programs. This includes paraprofessionals. That means we are short about 32,000 employees. Our legislature only meets every other year however there is business going on at the Texas capital year round. We don’t expect an improvement for the coming school year as there will not be increased hiring unless Texas taps into the Texas Economic Stabilization Fund / “Rainy Day Fund,” which it won’t because of underfunding of Medicaid. This underfunding will likely deplete the fund in the next legislative session.

By: Kenneth D. Franks

Kenneth D. Franks — Thu, 08 Mar 2012 13:32:59 +0000

Texas if my information is correct, lost about 18,000 public education employees for Fall 2011 / and Spring 2012. Because of our growing population we actually needed 14,000 more teachers / support staff to keep class size from increasing and continue remedial programs. This includes paraprofessionals. That means we are short about 32,000 employees. Our legislature only meets every other year however there is business going on at the Texas capital year round. We don’t expect an improvement for the coming school year as there will not be increased hiring unless Texas taps into the Texas Economic Stabilization Fund / “Rainy Day Fund,” which it won’t because of underfunding of Medicaid. This underfunding will likely deplete the fund in the next legislative session.

By: Tom Shire

Tom Shire — Thu, 08 Mar 2012 06:53:43 +0000

That’s a fascinating policy implementation, Randy. I can see the YOYOs being completely up in arms over it, but I can also see the benefits that can accrue in terms of quality of life and potential fuel savings. Very interesting.

By: NP

NP — Wed, 07 Mar 2012 18:09:04 +0000

Could you plot the union coverage against unemployment just for grins?