Why buying a home in the Boston area may never be the investment it once was
Homeownership made many people millionaires in the ‘90s. That’s unlikely to happen again.
“The only thing dumber than not owning a house is not owning two.’’
This is the piece of advice Karl “Chip’’ Case, a professor emeritus of economics at Wellesley College and a Wellesley resident, received about 30 years ago.
Case bought his current Wellesley home with his wife in 1991 for $392,000 – now, he told the Globe, his four-bedroom home is worth about a million dollars.
Many think that kind of wealth-building investment can’t happen in today’s real estate market, according to a piece in The Boston Globe Magazine titled “Is buying a home around Boston worth it anymore?’’
The story lays out the tumultuous recent history of home buying in Greater Boston and points out that today’s skyrocketing prices make it harder to get into the market, but are still no guarantee of future returns for those who do.
A further trouble, according to the Globe, is that many home buyers haven’t recognized this reality:
“Yet people are still dreaming, still living, effectively, in the past. In surveys…homebuyers in Middlesex County reported last year that they expected their homes to increase in value by 4.2 percent in the next year, roughly what people reported in the same survey back in 2003, just before the boom. ‘That’s something that really struck me,’’ Thompson says. “I think they’re still overestimating for the long run. If you compile 4.2 percent over the next 10 years, that’s a lot of home appreciation.’’’
Read the entire Globe Magazine story here.
These are the neighborhoods where homes are selling the fastest:
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