I love the housing bubble. I love thinking back to when I first moved to Boston, and listening to the MANY, the NUMEROUS, and OBNOXIOUS people insisting that the cost of housing in the fabled Massachusetts would never go down, and that I was misinformed, delusional, and rather ignorant to even begin to believe that there could be any possible negative issue arising in the real estate market. I still believe, as I did then, that a property's value is best realized by the rent(s) it will generate. Right now I live in a fabulous $1,200/month 2-bedroom unit 2 blocks from the Savin Hill station, making for a very lovely and easy commute to Cambridge. This means I am paying the equivalent of a $200,000 mortgage at 6% for 30 years. My unit is approximately 1,060 sq. ft, so at that rate it's $189/sq. ft. In my humble, belittled opinion, this is a below market rate per sq. ft. for Dorchester, sadly. Also, this is before the property tax and any maintenance costs associated with this unit. Thankfully I have kick-ass landlords who have owned this property since before the Sweet Jesus turned water into wine, so they're not the nickle and diming type of folk--I get the idea that this building is paid for, not like my last place, good fucking god.
Nevertheless, when I see the unit across the street, and one a few doors down, selling for $300K+, I wonder, "who?" "wtf?" "why?" "do they assume no one has a calculator?" More people should read Robert Shiller, or just go here.
And, if you are curious for some academic facts, check out this quack, who just recently owned up to the fact that despite his fancy status, he really hasn't a fucking clue as to what the market will do.