Top 5 Best & Worst Performing Boston Neighborhoods in 2008 Market Crash
The 5 Best & Worst Performing Boston Neighborhoods During the Market Crash
If history really is the best indicator of the future, then it makes a lot of sense to know exactly what and how much happened. For those who are thinking there is going to be a market crash, then this would be some very important and telling information for you.
And for those that are thinking about making a move and are worried about a market correction, then buying in some more insulated markets in the past may be a wise investment decision. And those that are looking to make an investment and are hoping to find some opportunities for possible big returns then that means looking at past markets with big losses would be very informative.
Hey, it’s Jeff Chubb. I am a recovering investment banker turned real estate agent that has sold more then a 1,000 homes and am one of the top agents in the state of Massachusetts. If you have any real estate questions, then I look forward to being your resource for answers.
Let’s start with the best performing neighborhoods in Boston. But first one very interesting thing I noticed is that in many of these neighborhoods the peaks and low points for market pricing were during different years. Amazingly one market peaked in 2010 to have two down years then a HUGE rebound in 2013. While the peaks were all over the place, most neighborhoods hit their bottom in 2009.
Also, as a quick heads up, I used all sales for Single Family, Condos and Multi-Family properties for these data figures. I felt this was a more fair analysis as there are significantly more condos in the Back Bay with very few Single Families and vice versa for West Roxbury.
So on to the top 5 performers.
The number five best performer was the Brighton neighborhood. Property values peaked in Brighton with an average sales price of $364k while finding their bottom in 2009 with an average sales price of $331k. This represents a 9.33% decrease in property values in Brighton. It took until 2012 for property values to be equal to the peak in 2007 with an average sales price of about $365k.
The number 4 best performing neighborhood in Boston during the last downturn was Jamaica Plain. Jamaica Plain saw it’s average pricing peak in 2008 at about $421k. It would then find it’s market bottom the next year in 2009 when it hit an average sales price of approximately $395k. This accounted for a 6.2% decrease in the average sales price from peak to trough. By 2012, home values in Jamaica Plain had exceeded the values that we had seen in 2008.
The third best performing neighborhood was Beacon Hill. The average sale price in Beacon Hill peaked out in 2010 at 1.019m and finding its bottom in 2012 at 1.055m. This accounts for a 4.9% decrease in the average sales price in Beacon Hill during the 2008 market crash. By 2013, home values had grown to $1.293m accounting for an appreciation gain of 16.7% over the 2010 high.
The second-best performing neighborhood in Boston was the Back Bay during the 2008 housing recession. The Back Bay peaked in values during 2008 at an average sales price of $1.018m. They reached their low point in 2009 at an average sales price of $990k which was a 2.8% correction in pricing. In 2,010 the values would rebound to $1.267m equaling a 24% increase over the 2008 peak of pricing.
The best performing neighborhood in Boston was the South End. The South End saw a 1.3% price correction. The South End neighborhood would hit its pricing peak with an average sales price of $710k in 2007. Pricing would then dip to $700k in 2008 to rebound to $706k in 2009. It wasn’t until 2010 when the average sales price reached $716k where it surpassed the values it had reached in its peak in 2007.
Now onto the five worst performing neighborhoods in Boston during the 2008 market correction. These neighborhoods had the largest price corrections and would be seen as the neighborhoods best opportunities for investors looking to pick up value purchases.
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The neighborhood that was the 5th worst performing Boston neighborhood was Hyde Park. Hyde Park saw a peak in pricing in 2005 with an average sales price of $387k. Pricing would then retreat for 6 years until finding its floor in 2011 with an average sales price $262k. This equated to a 32% average sales price decrease. It would not be until 2016 when prices reached slightly above the levels seen in 2005 with an average sales price of $399k.
The fourth worst performing neighborhood in Boston was East Boston. East Boston reached an average sales price of $394k in 2005. Eastie would see prices decline to $241k in 2009. This represents a 38.8% decrease in the average sales price. East Boston wouldn’t meet it’s price peak again until 2014. I bought my first home in East Boston in 2008… Looks like I was a year too early… Which doesn’t even remotely matter because I still own that house today and have made a fortune on it. Lesson there is when you buy for the long-term, “perfect timing” doesn’t matter.
The third worst performing neighborhood in Boston during the 2008 housing caused recession was Dorchester. Dorchester saw prices peak in 2005 with an average sales price of nearly $407k. It wasn’t until 2009 when Dorchester would find it’s bottom with an average sales price of $220k. This represents a decrease in pricing of 45.9%! The average price in Dorchester wouldn’t exceed the peak it reached in 2005 until 2015 when the average sales price hit nearly $447k.
The second worst performing neighborhood in Boston was Mattapan. Mattapan actually bucked the trend of the top seven markets. Every other market in the top seven worst performing markets saw their pricing peak in 2005. Mattapan actually saw the pricing peak in 2006 with an average sales price of $365k. Mattapan would reach its low in 2009 with an average sales price of $177k. This represents a 51.7% decrease in the average sales price. It wouldn’t be until 2016 when home prices would go beyond the peak that it saw in 2009. The average sales price in 2016 in Mattapan was $389k.
The worst performing neighborhood in all of Boston was Roxbury. Roxbury saw the average sales price in 2005 peaking out at $375k. Prices would then retreat for the next four years to hit their bottom in 2009 with an average sales price of $165k. This decrease in pricing from $375k to $165k represents a 55.9% decrease in pricing. Again, as I mentioned earlier… These average sales prices are all Single Family, Condo and Multi-Family properties. Pricing would jump up to $374k in 2012, but that was really because there were a couple large multi-family properties that sold including one for nearly $3 million. Exclude that year and prices wouldn’t see the average sales price equal what they were in the peak until 2014 when they hit an average sales price of $406,533.
As I have said before, I believe that we will see market stagflation over the next couple years where on average we won’t really see prices go up or down. I do however believe that some markets will be impacted more than others where you could have some that depreciate and some that end up appreciating.
If there is one thing I know from experience as well as from the data… When you buy for the long term, Real Estate will be an asset that will perform for you.
Can I do this for all markets in Massachusetts? The short answer is, I don’t know yet… It is a LOT of data with a LOT of towns! But I am working on it!
Are you looking for to buy or sell a home in Massachusetts? If so, then I would love to chat about your real estate goals and see if it makes sense to work with one another. As a heads up, I do not work with everyone and do limit the amount of people that I can work with at once. If I can’t help, then I can promise you that I will point you in the right direction!
Do you have any comments or questions on this market data? Then throw them in the comment section below. I thank you for taking the time in watching this video so I always take the time in answering all of your questions and comments.
And can you do me a HUGE favor? Can you please share this video with anyone you know that are thinking about making a move in Massachusetts? Whether it is buying or selling, an educated person is a powerful person.
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Until next time.