Mass Run-Up!

To say Massachusetts has experienced a housing boom over the last ten years would be an understatement.

Anecdotally, anyone living in Massachusetts during the run up, particularly the greater Boston metropolitan area could not have been unaware that something significant was occurring.

But having the actual home price data plotted out makes for a truly dramatic sight.

The above chart (click it for a closer look), plotting the house price index for Massachusetts over the last 86 quarters (Q1 1985 to Q2 2006, 21 years and 2 quarters), was produced from data published in by the Office of Federal Housing Enterprise Oversight (OFHEO).

Since the current cycle began in Q4 1994, home prices across Massachusetts have increased over 260%.

Prior to the expansion phase ending in Q2 2006, home prices in Massachusetts had increased for an astounding 45 consecutive quarters… that’s officially over 11 years of solid price growth!

Some key points from the graph:

1. 5 Year Decline During Last Cycle - Prior to the latest run up, Massachusetts experienced a (mild by comparison) significant expansion that peaked during Q4 1989. After the peak, the area went into a decline that lasted for approximately 20 quarter before bottoming out during Q4 1994. This decline represented an 11 quarter or almost a 3 year retracement in prices.
2. 8 Years To Recover From Last Cycle – From the 1989 peak it took 8 full years (32 quarters) for prices to recover.
3. Prices Now In Decline – Prices have been relatively flat since Q4 2005 and have now actually declined roughly 1% since Q1 2006.