The only thing worse than renting in the Boston area is buying in the Boston area.

With a handful of exceptions like Silicon Valley, LA, and Manhattan, Boston is just about the worst real estate market in the country.  According to the Boston Globe, the average price of a house here doubled in the last four years of the bubble.  Even though the economy collapsed, housing prices haven't really changed all that much, except possibly for the million-plus market, which was of course beyond absurd to begin with.  Thanks to low interest rates, the real estate status quo has basically been maintained, as people borrow more and more just to get their foot in the door.  And everyone knows that housing prices can only go up...

Everyone also knows you should put 20% down and devote something like 25-28% of your gross income to a mortgage payment.  I make a pretty decent living, but when I do the numbers that works out to (a) a tiny one-bedroom condo in a 130-year-old building in the city, (b) a two-bedroom condo in a 100-year-old three-family inside 128, or (c) an 80-year-old house in New Hampshire that needs a new roof.  Not exactly the American dream my home-owning friends in other cities are living...

What I don't understand is, who the hell can afford to live here?  It's not like the city isn't packed full of people who have somehow scraped together the dough and gotten into the game.  I suspect at least part of the price run-up can be traced to dual-income couples comprised of various permutations of tort lawyers, plastic surgeons, and MBAs...you know, the ones for whom the Bush tax cut made the difference between the second Lexus and the Porsche. On top of that, you just know that a lot of people are stretching themselves as thin as they possibly can, banking on the market continuing to rise and praying that the car won't die and the kids won't need braces.  And thanks to this twisted grown-up version of peer pressure, those of us who would prefer to remain more fiscally responsible are screwed by the people who will risk financial ruin in a bidding war over a three-bedroom colonial with a view of the Charles.

Incidentally, PMI?  PMI?  Maybe PMI makes sense in some rural area where the average price of a house on two acres is $120,000.  Twenty percent of a decent house around here starts in the low six figures, which in addition to being completely unreasonable is more money than any honest person should have lying around.  Really, who has that kind of cash, other than crack dealers, professional athletes, and slum lords who bought into the market twenty years ago?  PMI in a place like Boston is just a way for banks to gouge you because the can. 

The depressing thing is, I don't see any realistic way the situation could ever change for the better.  Like Maynard James Keenan said about LA, the only way to fix it is to flush it all away.  Here's hoping there's a comet up there with Boston's name on it.  Learn to swim, baby...