Tuesday, August 28, 2007

Over-valued real estate #5 - Boston

The bubble is about to burst in Boston. However, Bostonian homeowners are familiar with declining real estate values. The market there went through a serious bubble in the mid-1980s. It burst in 1989, and prices didn't recover for almost 10 years.

How far do prices have to fall to return to its long run trend? About 39 percent. Ouch!

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