In recent weeks I've noticed increased media mentions like this one of a possible shift in the housing market and new questions about whether we're headed for a nationwide housing downturn.
Nationally Here Are 4 Stats That Prove This Isn't 2005 All Over Again
Recent research by the National Association of Realtors (NAR) examined certain red flags that caused the housing crisis in 2005, and then compared them to today's real estate market. Today I'll concentrate on four of those red flags because they were all outside historical norms in 2005. Home prices were way above normal ratios when compared to both rents and incomes at the time.
Here are the categories with percentages reflecting the unrealistic ratios and numbers of 2005 as compared to the current national market. Remember, a negative percentage reflects a positive gain for the market.
- Price to Rent Ratio: -18%
- Price to Income Ratio: -12%
- Percentage of Mortgaged Purchases: -15%
- Percentage of House Flipping: -50%
Locally Here Are 4 More Stats Proving This Isn't 2005 All Over Again
Looking a bit closer to home for insight with regard to a possible housing market shift, if we examine the four indicators of a housing market downturn: days on market, inventory of homes for sale, median sales price and closed sales volume we have further evidence that, at least as far as Boston real estate is concerned, no downward shift in the housing market is evident.
The Bottom Line
They say hindsight is 20/20 and today, experts are keeping a close watch on the potential red flags that went unnoticed in 2005 so take what you hear nationally about the market with a grain of salt because Boston real estate does not neatly conform to national trends.