New neighborhoods gaining $1m cachet

Dorchester, East Boston, Somerville, and the Fenway may lack Newbury Street's boutiques, but they share one trait with the Back Bay: homes selling for $1 million or more.

Urban dwellers seeking alternatives to soaring property values in Brookline, Newton, and downtown Boston are pushing prices past this telling threshold in some unlikely places. Last week, East Boston, a laggard in the real estate boom, recorded its first such sale, when a 3,600-square-foot condominium in a converted fire station sold for $1.15 million.

''It's crazy -- I mean it's good crazy," said Saul Perlera, who moved to East Boston from El Salvador in 1986 and owns Perlera Real Estate. The firehouse on Marion Street, he said, is on ''one of the not-so-good blocks."

Anyone who says a million dollars is too much for the East Boston condo ''hasn't seen the inside," said Paul Campano, the Prudential Prime Properties/Buccelli Real Estate agent who sold the unit. It has a voice-activated digital music system, high-tech kitchen, roof deck, and lighting that ''elevates moods." Put on the market in March for $1.6 million, the asking price was dropped to $1.45 million before it sold.

Buyers with money are aggressively scouring less pricey neighborhoods. When Boston University classics professor Patricia Johnson and her husband purchased their million-dollar single-family home in the Fenway in July 2004, there weren't even any ''comps" -- data on recent sales that help buyers determine whether a price is fair -- for the couple to study.

''I was escaping from the much higher prices in Brookline," said Johnson, who moved to the Fenway from Wellesley after looking in Brookline. The bet paid off: Three more $1 million-plus Fenway properties, one condo and two single-families, have sold since then, according to Listing Information Network, or Link, which tracks downtown markets. Two more properties are currently on the market. One is a former laundromat that is being converted into a single-family home, and the other is a condo with just 1,500 square feet -- far less space than Johnson's home. ''Wow; that's not very much square footage for a million," she said.

Urban pioneering at these prices can be risky, especially amid concerns the housing market may be experiencing a speculative ''bubble" that could soon burst. Million-dollar-plus properties popping up in formerly moderately priced neighborhoods may be evidence of a market out of control.

A neighborhood's first $1 million buyer may be ''very judicious and smart," said Kevin Ahearn, president of Otis & Ahearn real estate brokerage. ''The downside would be if the market doesn't mature as fast as they think it will," and owners ''might not be able to get out of it as fast as they think" if they don't plan to stay for several years.

Sales of single-family homes across Massachusetts have slowed this year, as prices have continued to rise. Real estate analysts say the combination of slowing sales and rising prices is an indication of an out-of-whack market, in which sellers expect higher prices than buyers are willing to pay. Rather than accept lower prices, sellers take their property off the market.

In Boston, however, condominium sales are ''chugging along," Ahearn said. According to an analysis by his firm released this week, 2,810 Boston residences were placed under agreement this year, down slightly from 2,857 during the same period in 2004, Jan. 1 through Sept. 16. That is significantly higher than the 2,300-plus properties recorded during the same time period in 2002 and in 2003.

Longtime residents of newly pricey neighborhoods are amazed to be living near million-dollar homes. Connie Ramsdell laughed when she learned that a $1 million-plus condo is under construction a few blocks from the Somerville two-family she and her husband paid $18,000 for in 1956, blocks from the newly hip Davis Square. Inspecting the vinyl-sided house, she said, ''You're kidding -- it's a piece of junk."

Builder Edward Champy agreed with her assessment. ''We're jacking the building up, ripping out the foundation, and doubling the size, dropping the building back down on it, ripping the roof and sides off it, and leaving about 50 percent of the exterior walls," he said. ''No vinyl -- I promise."

Champy is confident that one of the new units will become the fourth $1 million residence ever in Somerville, once a working-class city but now a favorite of young professionals who migrate there for its housing stock of triple-deckers and two-family homes.

The other million-dollar homes sold in January and August 2004 and this month, according to Somerville agents and the Warren Group, a property information firm. Larry Rich said he and his wife bought one of them in the eastern section of Somerville, for $1.2 million. But, ''It's my feeling that we paid too much for it," he said. Being a pioneer, he said, also ''brings a certain amount of notoriety I'd just as soon not have."

Lee Robinson, an agent for Coldwell Banker Residential Brokerage, had a recent client who, against her advice, asked $1.2 million for a house. ''They ended up with $910,000," she said.

She is certain her new listing, a Victorian on Allston Street in Dorchester, is worth every penny of its $1.1 million price tag. A second Dorchester house just a few blocks away, on Alban Street, was listed by a competitor for $1.5 million. Either could become the first house in that neighborhood to sell for more than $1 million, according to MLS Property Information Network, a database for agents.

Dorchester's grand Victorians with apron lawns are underappreciated, she said, and a Dorchester address doesn't translate to million-dollar cachet in many people's minds.

When people look for a house in Dorchester, she said, ''it never occurs to them there might be things over $1 million."

Kimberly Blanton can be reached at blanton@globe.com.