Fellow MA resident here. Grew up in Medfield, living in Natick, frequently visit Newton. The wealthier parts of these communities were relatively isolated from the bubble, and houses of that size are still selling for that much here today—sometimes a lot more, depending on the neighborhood. I don’t really see the point you’re trying to make.
I think the point OP is making is that incomes could not support that level of pricing during 2004-2006, only reckless levels of debts.
Now that 12-14 years have passed, incomes - and inflation - have risen and those same prices appear more reasonable. Accounting solely for inflation, $1.2 million today was worth $970,300 in 2006 and $901,900 in 2004.
It seems like a bad example, though. Most of the neighborhoods around here with that sort of pricing for that size house didn’t drop much, if any, during the real estate crash. It felt like a very distant problem here.
I lived in a similarly-priced neighborhood less than 30 minutes away during that time period. Houses continued to sell normally throughout, though sometimes they were on the market a little longer than they would’ve been previously. Prices continued to go up.
That's on purpose. The point of the "quantitative easing" that's been happening is two pronged. The first is to let the largest banks feign solvency. The second is to reinflate asset prices to rebuild bank balance sheets.
