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I found this article on a local Massachusetts newspaper, the South Shore Insider, that has an interesting take on the real estate market south of Boston. It captures the true essence by a broker that has served as the  president of the Massachusetts Association of Realtors.

David Wluka has a brilliant line that is probably the most hones thing said in this whole process. And expectations are different too. People up until 2000 were looking at houses as an investment (where they would) retire and pay off the mortgage. The cycle of appreciation started and they started looking at it as a source of income.

Outstanding.

Why did the housing market cool down this year?

Well, you just can’t maintain an overheated market forever. There were three or four years of double-digit appreciation and it just couldn’t be maintained. It’s a natural thing, (housing) markets go up and they go down.

When you talk to people about their perception about the (housing) market, they have a short horizon. They look back three months, they look back six months. But you have to look back three to five years to understand what’s happening in the market.

And expectations are different too. People up until 2000 were looking at houses as an investment (where they would) retire and pay off the mortgage. The cycle of appreciation started and they started looking at it as a source of income.

For example, the cumulative appreciation from 1990 to 2000 was 6 percent in Massachusetts. From 2000 to 2005 it was 84 percent. The expectations of people are really up there. So (the housing market) is cooling down, but the plane is not crashing. It’s going to land. Maybe a bump or two on the way down, but the plane is going to land. via the SOUTH SHORE INSIDER

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