LuxBeat Local Real Estate Professionals discuss rumors, facts and opinions on Luxury Real Estate in Boston, MA and Providence, RI

Housing slump got you down?  If over a century of history is any indicator, and you have the time to wait it out, real estate, in some of the big metro areas have bounced back and then some.  Here is a quick look at what happened in a few of those cities after the last housing bust:         

New York: 

Last Downturn: 1992-1995

Pre downturn Peak: 1988

10 Years Later: In 1998  prices were down 28%.

5 Years Later: In 2003 prices were up just 10% from the 1988 peak.

Opinion: Modest Comeback – From 2003 through 2005 prices increased further but in 2006 we had already started to see the next downturn.  The modest 10% inflation adjusted gain is certainly not a BOOM, and unless you sold between 03′ and 05′ you are looking at a bust compared to some of Americas other cities.

Los Angeles:

Pre downturn Peak: 1989

Last Bust: 1994-1997

10 Years Later: In 1999  prices were down 26%.

5 Years Later: In 2004 prices were up a whopping 36% from the pre-bust peak.

Opinion: Boom – LA prices have skyrocketed and in the past 5 years and have only come down modestly, if at all.  If there was a housing boom out there, Los Angeles is one of them.

San Francisco:

Pre downturn Peak: 1989

Last Bust: 1994-1995

10 Years Later: In 1999  prices were up 1%.

5 Years Later: In 2004 prices were up ready for this, 54% from last market peak.

Opinion: Super Boom – Although prices never dropped during the downturn, an increase of 54% from the last peak is amazing.  What is more amazing is that prices went up even further the following 2 years and have been somewhat immune to the recent downturn.

Miami:

There is no historical data to prove whether Miami is in a boom or a bust but let me give you my 2 cents.  Over the past 5 years Miami, and Florida for that matter, have gone through one of the fastest expansions the US has ever seen.  A quick look at the landscape will tell you that the population has exploded along with developments and new skyscrapers.  Unfortunately, Miami in particular has been developed too quickly.  The population cannot keep up and many overseas buyers bought on speculation.  Over the last year and a half prices have dropped dramatically and developers have started to abandon projects.  Those who bought condos thinking they would get a quick double are lucky to get their money back.  Some are selling at a loss when faced with paying brokerage commissions and closing costs.  In the coming year, if you have cash on the side, you might want to think about scooping up some condos at forclosure sales.

Opinion: Upcoming BUST

Beloved Boston:

Pre downturn Peak: 1987

Last Bust: 1992-1995

10 Years Later: In 1996  prices were down 24%.

5 Years Later: In 2001 prices were up 25% from last peak and the following 4 years prices increased even more dramatically.

 

Opinion: Boom – The Boston housing market went through one of the most dramatic booms in the country which is why every national news station points to Boston as a real estate bubble.  Prices have certainly stabilized over the past year, and in the suburbs have come down dramatically as average days on market have gone up.  Boston proper though, in luxury high rise condo buildings, prices have stayed the same and in the most desirable buildings(One Charles, Ritz-Carlton Residences, Residences At The Intercontinental, Atelier 505) prices have increased substantially as demand for in town homes have gone up.