Posted on April 9th, 2017
Just a few affluent communities in the Boston real estate market that are along the interstate 495 corridor such as Boxborough and Hopkinton have seen the median home price push past peak levels that were reached a decade ago.
In terms of the biggest gains in this area, Hopkinton is the leader. Its median price has jumped 16% since 2005 from the price of $545,000 to $633,000 this is according to the real estate market tracker and data firm, Warren Group. There is also been a good increase in Boxborough, where the median home price is up 8.9% from the price of $565,000 to $615,000.
At the same time, many working class and middle class families are struggling to get back to where they were at in mid-2000s and Boston house prices in this area are reflecting that. Some are just barely above where they were about a decade ago according to the Warren Group numbers. The median home prices in middle class and working-class communities such as Lowell, Marlborough, Milford, Medway, North Attleborough, Plainville, Littleton, Bellingham, and Attleboro are below and in some cases well below where they were at in 2005. The further that one travels from the region’s core, the greater the chance that single-family home values have not recovered from the housing-price meltdown that we saw a decade ago. This is according to a recent report by The Boston Foundation on the greater Boston area. This Foundation closely tracks local housing trends.
One reason that home prices in the outer suburbs are struggling is that there is a growing pushback against longer commutes by homebuyers. This is according to Carlos Xu, famous real estate broker at Lexwin Realty, he also analyzes the home prices that are in the western suburbs.
Buyers will settle for something that is smaller if it’s closer to Boston. This is even if it means moving into a school district that’s not as strong as ones they are accustomed to out on the 495. In the 1980s and 1990s, there was a different situation as buyers had growing families and they sought larger homes with larger yards in the outer suburbs that had a strong school system.
According Bannigan, the younger generation that is buying homes is not attracted to the commuter lifestyle and the public-school system is not as important to them than it used to be before.
One example of this is in Milford which saw the median home price in 2005 reach $365,000, but then plunge over 23% over the next couple of years to $280,000 according to the Warren Group stats. There has been some recovery in value to about $305,000 in 2016, but the median home price is still well below the highs of a decade ago.
In the neighboring area of Medway, the median home price fell 18% from 2005 to 2013 from the high of $448,500 to $368,450. Over the past three years it’s rebounded a bit to $379,950 according to the statistics given by the Warren Group.
In North Attleborough, the median price is $348,000, but it hasn’t regained its peak 2005 price of $373,750. The median price in Attleboro is $280,000, but this is still below the median price in 2005 of $323,000. Bannigan says that many towns along the 495 corridor have seen home prices drop by as much as 50% from where they were the top of the market.
Quite a few of the communities are about 45 minutes to 1 hour from the main Boston area. You have to factor in rush-hour traffic which can make these times even longer. Some buyers are looking for alternatives in areas such as Somerville or Cambridge even as these prices rise. Buyers are looking for a commute that is not longer than ½ hour. Some buyers will settle for a commute that is about 45 minutes if absolutely necessary, but most aren’t willing to settle for a commute that is over 1 hour.
In the Cambridge and Boston urban core as well as the 128 corridor, there’s been a lot of job growth because of the biotech and the technology boom. The rents for offices along route 128 or more than 50% higher than those who find on the 495. The percentage of the office space that you find on the 128 is about half of that of the office space on the 495.
The values along the 128 have held firmly, and in some cases had significant increases. The prices along the 495 have not recovered or barely recovered.