East Boston: Housing Collapse or a Return to Normal Prices?

Last month, a two family with a big driveway on a 5,000 square feet lot was foreclosed upon—the property was located at 687 Saratoga Street near the Wood Island train station.  It is currently on the market for $183,000.  The property’s history gives an insightful glimpse of the troublesome East Boston mortgage crisis and supposed housing “collapse.”

The property was purchased in 1999 for $195,000.  The buyer obtained 95% financing and bought the house with a mortgage of $185,250.  In 2001, the owner refinanced the house for $190,750 and later took out an additional mortgage for $40,000.  In 2003, the owner refinanced again, borrowing a total of $328,500.  In July 2005, the owner refinanced a fourth time, borrowing a total of $440,000 on the property for which he only paid $195,000.

Some East Boston properties are selling at 50% of their 2004/2005 values, but not much less than their mid to late 1990s prices.  Perhaps current market conditions are not signs of a housing “collapse,” but are instead a return to “normal prices” after an extended period of artificially inflated prices due to the nonstop availability of mortgages and loans over the past ten years.

Please check back as we continue to update you on East Boston real estate happenings. To see all our listings, or to search MLS properties, head to the Tony’s Realty Website.

Email Tony with your questions or comments.

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