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Is Boston's Housing Market Just ... Normal?

Much hay and hubbub has been made about recent housing stats re: our fair city upon several hills—the worst sales volumes in years, much lower than in the middle of last decade, more to come, cats and dogs living together, etc. But could it be that Boston's housing market is simply, boringly chugging along normally?

Until about 2004, as the trusty graph above from Trulia shows, Boston home sales were going along at a pretty respectable clip. Then they shot up. What happened? As a Boston Globe story from the summer of 2004 noted, an expected mortgage-rates hike didn't materialize as it was supposed to. This had a two-fold effect nationwide: It got more people thinking about buying as the economy pulled out of the 2000-01 recession; and sent would-be buyers "scrambling" (The Globe's verb) to buy before the rates rose. Which they never did. And we know what happened in the next few years in major cities nationwide: sales, prices, development (relatively speaking) all increased, and a subculture of what we'll call real estate-ism arose as housing became the national pastime in between the Super Bowl and Opening Day.

So sales were artificially inflated. Even Alan "The Maestro" Greenspan, the man behind the historically low rates, had to admit that things got "frothy" for a bit. Then, in 2007, the first rumblings of what would become the Great Recession could be felt in a credit crisis that affected sub-prime mortgages and commercial real estate first, and then spread to the whole market.

But wait! Here came government intervention again to prop things up in the form of a first-time homebuyers tax credit. That led to a rush of activity at the end of 2009 and into 2010. Then it expired. Things haven't been the same since, even with the slow economic recovery and still historically low mortgage rates.

We're not saying the federal government kept Boston's housing artificially rosy (well, we kind of are). We're simply saying that apples-to-apples comparisons to 2005, 2007, 2009, etc., to today's market are not accurate. Maybe try 2003 or prior, before the inflation in prices and taking into account the recession of 2000-01. It's telling, in fact, that one of this week's most startling statistics is that Massachusetts condo sales were at their lowest level in 2011 since 1995.

Put away the thesaurus. Maybe it's all just normal.

· Sales Check [Curbed Boston]