The real estate downturn is finally affecting Massachusetts, and prices for single-family homes have plunged 11 percent. Many people are booing, but we are cheering! Prices should continue to slump well into 2009, when we will be ready to pounce into a home of our own. Yes, I’m dreaming big. I even dare to envision a yard.
Ever since I moved to Boston almost ten years ago, I’ve kept one eye on the real estate market. (Sometimes, when in a pique of nesting, both eyes). I’ve watched it rise to dizzing heights where the only residences within my household’s means were crap properties in towns where I would never, ever live. $250k for a 90-year old “fix ‘er upper” in working-class exburbia. $300K for a 2-bedroom factory-converted condo in the heart of Chelsea — the ceilings are so high that they confer a sky-like atmosphere that will recreate the outdoor experience on days when the gunfire is too heavy to leave the condo.
Last year, moderate-sized single-family homes in the inner-ring of the Boston suburbs started at $500k. How depressing, and confusing. We are two computer professionals who are relatively frugal, with no kids, no pets, and one car. But as of last year, the only place in semi-fashionable Waltham that we could buy was an 800 square-foot condo located a half-mile from the vibrant downtown. If we can’t afford those $400k two-bedroom high-rise condos along the Charles River, then who can?
The subprime mortgage crisis cleared up a lot of my confusion. It never occurred to me that some of the people buying these places actually couldn’t afford to. Lenders were giving money to people with poor credit and a high risk of default. Even more incredible, people were accepting unmanageable mortgages with adjustable rates on the wild hope that the housing bubble would continue to inflate indefinitely. The lenders are blamed for the subprime mortgage debacle, for deceitfully representing mortgages as being zero-risk. But ultimately, many people assumed risky mortgages that they couldn’t reasonably afford.
I have little sympathy for people who use credit cards to live beyond their means, but it’s hard not to feel bad when people lose their homes for engaging in essentially the same careless financial behavior. Homes are the staple ingredient in the American Dream, essential to the social fabric of any modern society. They anchor families within a community. I have a hard time accepting the notion of a home being an investment that can gone horribly awry. Then again, I have a hard time accepting that the median home price in Cambridge is about $500,000. Realty reality is smacking a lot of people in the face.
