Posted on October 30, 2009

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Despite Drop in Housing Prices, Boston Less Affordable This Year Than Last, Report Finds

Despite a significant drop in housing prices, the Greater Boston area is less affordable today than it was a year ago compared to other major urban areas, a new report from the Dukakis Center for Urban and Regional Policy at Northeastern University finds.

Funded by the Boston Foundation and the Citizens' Housing and Planning Association, the Greater Boston Housing Report Card 2009: Positioning Boston in a Post-Crisis World (116 pages, PDF) found that there have been modest improvements in the Massachusetts economy recently, with housing prices appearing to have bottomed out from their low point and even higher in some areas. Rental prices in the region, on the other hand, rose by roughly 12 percent between the third quarter of 2005 and the third quarter of 2008, as foreclosures forced many homeowners into apartments. At the same time, construction of multi-family units has plunged. Indeed, there may be as few as 3,500 permitted units of new housing in the region this year — a drop of 77 percent from the peak of 15,000 units in 2005.

The report predicts that unless housing production increases to match rising demand as the economy improves, the region will be at risk of rapidly rising home prices and rents, once again making the city one of the most expensive in the country.

"This is a sobering report with grave implications for the economic road ahead in the commonwealth," said Boston Foundation president and CEO Paul S. Grogan. "If we price ourselves out of the market for young talent, we will lose the population we most need to thrive. And the impact of the economic crisis on residents who are the least well off must be a concern to all of us in the region."

Primary Subject: Community Improvement/Development
Secondary Subject(s): Economic Crisis
Location(s): Boston, Massachusetts

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