Even as the Greater Boston area slowly recovers from the financial crisis and stock market crash of 2008, housing costs and foreclosures in the region are expected to increase, a new report from the Dukakis Center for Urban and Regional Policy at Northeastern University predicts.
Funded by the Boston Foundation, the report, The Greater Boston Housing Report Card 2010: Taking Stock in an Uncertain Time (94 pages, PDF), predicts that home prices in the region will not fully regain their 2005 highs until 2014. The report's authors also anticipate a sharp rise in foreclosures in 2011; increases in already high residential rents, which have a disproportionate effect on the region's poorest residents; continued slow growth in housing production; and growing competition for moderately priced housing.
While Massachusetts has fared better than other sections of the country during the recession, the report's authors argue that the ongoing shortfall in housing production is of particular concern. If current trends persist, 2010 will go down as the second-lowest year for permitting in over a decade; indeed, in some municipalities no new home construction permits were issued in 2009. Unless the housing supply in the region is increased to meet demand created by an influx of new residents, rising home prices ultimately could dissuade people from moving into the region.
"There is important positive news in this report about the basic resilience of the regional economy, but the need to address fundamental issues in Greater Boston's housing market remains troubling and compelling," said Boston Foundation president and CEO Paul S. Grogan. "We continue to put intolerable pressure on those least able to afford a place to live, and we continue to risk losing our young people who are motivated to move to parts of the country where the cost of housing is far lower. This report is a call to address a set of issues that are critical for the region's economic wellbeing."