Property Grunt

Wednesday, July 13, 2005

Beantown Bubble

In a recent article from the Inman news, it was reported that Boston, Los Angeles and San Francisco were the riskiest real estate markets. This was from a report by Kiplinger’s Personal Finance Magazine that based their analysis from the PMI Risk Index.

The criteria for the list included job growth, population, median income and affordability. Boston fit the profile due to the loss of 200,000 jobs since 2000 and housing prices that are not aware of the laws of gravity. However there are certain factors that were unique to the markets that attributed to their risk.

Los Angeles was not only affected by speculation and skyrocket prices but also the likelihood of the removal of certain restrictions that would allow a surplus of inventory to enter the market.

New York not to be outdone was divided into 4 metropolitan areas. One of the areas that the Grunt took note of was White Plains. The development gods have certainly blessed White Plains with a new wave of shopping facilities including a Target and Whole Foods. Also with the likes of Donald Trump, White Plains has also become condo central. However the Grunt figures this is how it gets a little dicey. The majority of the buyers are speculators and when the bubble pops, there is no doubt in my mind that many investors will be running wild in the streets trying to sell off their once prized possessions.

Its kind of cute how they referred to the Boston Bubble as the Beantown Bubble. I guess its better than the New Kids on the Block Bubble or the Boston Red Sox aneeded lmost a hundred years to win another world series Bubble. But seriously folks. I think this is outrageous that Boston is beating New York as the the riskiest real estate market. We should be ashamed.

Below is the chart from PMI Index

PMI Risk Index by MSA

Risk Risk
MSA Index MSA Index
------------------------------------- --------------------------------
Boston-Quincy, MA 534 Las Vegas-Paradise, NV 108
Nassau-Suffolk, NY 511 Dallas-Plano-Irving, TX 102
Oakland-Fremont-Hayward, CA 487 Austin-Round Rock, TX 101
San Jose-Sunnyvale-Santa Clara, Portland-Vancouver-
CA 481 Beaverton, OR-WA 101
San Diego-Carlsbad-San Marcos,
CA 467 Kansas City, MO-KS 100
Cambridge-Newton-Framingham, MA 446 Orlando, FL 99
Atlanta-Sandy Springs-
Santa Ana-Anaheim-Irvine, CA 431 Marietta, GA 99
Los Angeles-Long Beach- Charlotte-Gastonia-
Glendale, CA 404 Concord, NC-SC 97
Sacramento-Arden-Arcade- Phoenix-Mesa-Scottsdale,
Roseville, CA 401 AZ 97
San Francisco-San Mateo-
Redwood, CA 395 St Louis, MO-IL 90
Providence-New Bedford-Fall Houston-Baytown-Sugarland,
River, RI-MA 389 TX 87
Detroit-Livonia, Dearborn MI 379 IL 86
Riverside-San Bernardino- Seattle-Bellevue-Everett,
Ontario, CA 339 WA 84
New York-Wayne-White Plains,
NY-NJ 331 Fort Worth-Arlington, TX 78
Edison, NJ 313 Philadelphia, PA 72
Minneapolis-St Paul- Milwaukee-Waukesha-West
Bloomington, MN-WI 251 Allis, WI 68
Fort Lauderdale-Pompano Beach-
Deerfield Beach, FL 236 San Antonio, TX 64
New Orleans-Metairie-
Denver-Aurora, CO 208 Kenner, LA 64
Newark-Union, NJ-PA 206 OH 64
Average 202 Columbus, OH 63
Washington-Arlington- Nashville-Davidson-
Alexandria, DC-MD-VA-WV 187 Murfreesboro, TN 62
Miami-Miami Beach-Kendall, FL 182 Memphis, TN-MS-AR 60
Warren-Farmington Hills-Troy, Cincinnati-Middletown, OH-
MI 160 KY-IN 58
Tampa-St Petersburg-Clearwater,
FL 142 Indianapolis, IN 56
Virginia Beach-Norfolk-Newport
News, VA-NC 115 Pittsburgh, PA 55
Baltimore-Towson, MD 114