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Real estate now | scott van voorhis

Keep an eye out for another housing bubble

Highlights from the Boston Real Estate Now blog.

OK, can’t exactly call it a warning, nor is President Obama suddenly turned into a housing bear.

But the president certainly alluded to the potential of a new bubble in his big housing speech Tuesday.

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Yes, I know, all the housing market cheerleaders keep telling us there is no bubble, that things have changed, that the market will even out, even magically correct itself.

Yet just because all those nasty subprime mortgages are a thing of the past doesn’t mean we are somehow immune from another housing bubble.

We are seeing the housing market heat up far too quickly, driven by the Fed’s campaign to keep interest rates at rock bottom levels, speculative buying of massive tracts of homes and condos by investors, and increasingly ridiculous barriers to new construction in Greater Boston and other high-priced markets.

Of course, Obama didn’t mention any of those factors — he is trying to sell his plan to disband Fannie Mae and Freddie Mac as a way of preventing a bubble.

Good luck with that — it’s a little late for prevention, and disbanding the Washington-based housing giants will probably take years.

The cat is out of the bag and the market forces driving up home and condo prices — not mention rents — aren’t going to be so easily contained.

In fact, if it’s gotten to the point where the president is starting to warn about the potential of a new bubble, we are probably already well along our way.

Here’s what the president said:

“Helping more Americans refinance. Helping qualified families get a mortgage. Reforming our immigration system. Rebuilding the hardest-hit communities. Making sure folks have a decent place to rent. These steps will give more middle-class families the chance to buy their own home, more relief to responsible homeowners, and more options for families who aren’t yet ready to buy. But as home prices rise, we can’t just re-inflate a housing bubble. That’s the second thing I’m here to talk about today: laying a rock-solid foundation to make sure the kind of crisis we just went through never happens again.”

Is ’70s-style suburban living dead?

Everything urban is hot right now — even in the suburbs.

That’s right, the hottest growth areas in many Greater Boston suburbs are not in sprawling new subdivisions on former farmland but in and around town centers.

Here’s what one Newton broker, who has been selling homes in the Garden City for decades, recently told me.

Once upon a time, no one wanted to be near Newton’s various village centers, but now they can’t get close enough.

“It’s a huge change since I started. Anything closer to the center was lower. People didn’t want to be close to the center — if you were really close, your house sold for less money,” she noted. “But things have really changed. Sellers love those houses within walking distance, they want to walk to the coffee shop and use public transportation.”

Natick is another great example, with a median single-family sale price of $422,500 that is less than half Newton ($855,000), the Warren Group reports.

Karen and I bought a fixer-upper within a 20-minute walk from downtown a decade ago and have seen Natick’s downtown blossom. It’s worth the walk now, with a nice assortment of shops and restaurants, and a commuter rail stop as well.

We were hardly trend seekers — we stumbled onto Natick in our search for something with potential we could buy for under $300,000.

But we have definitely liked what we have seen — call us converts.

Honestly, we have no desire to sell our Natick house and move into the kind of traditional ’70s subdivisions where we both grew up. To do anything, you had to jump in the car and drive at least twenty minutes or more.

It’s more than just tracking the amount of time spent in a car.

It’s the overall feel. Growing up in a suburban subdivision, you might as well have been on the moon, with little or no connection with the community.

Natick and Newton are just two examples— the interest in urban/town center living is growing across the Greater Boston area, with many other examples, with the giant Westwood Station project off 128 being one of the largest.

Scott Van Voorhis is a freelance writer who specializes in real estate and business issues. For the full Boston Real Estate Now blog, visit www.boston.com/realestate.
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