House hunting? Think small, old

It's home buying season again, and shoppers venturing out for good deals should hew to a simple strategy: think old, think small.

Small houses line the streets of many older neighborhoods, like those built quickly for the masses of veterans returning from World War II. Through the 1950s, small houses could be easily built on smaller lots, before restrictive zoning rules led to the rise of one-acre home lots, said Henry Pollakowski , the director of the Housing Affordability Initiative at MIT's Center for Real Estate.

"Finding small houses is really part of the trick," he said. "Suburban zoning tries to keep lot sizes large, to bring in above-average income people. But you can find little niches where there are small homes, there are nooks and crannies that you can poke into."

Several communities have many three-bedroom houses selling for less than $300,000, or at least below $370,000, the median price for Eastern Massachusetts in the first quarter. Dracut, Randolph, Billerica, Marlborough, Quincy, Framingham, Methuen, and Weymouth all have at least 65 single-family houses priced below $370,000, according to the MLS Property Information Network. All ranked in the top 25 of MIT's Housing Affordability index of 142 Boston suburbs, which also factored in schools, open space, and access to job centers.

Prices for starter homes are "down a bit, but given that they were so high, it's not like there's any major news there," Pollakowski said. "We're seeing most affordable homes holding steady."

Dracut, which sits between Lowell and the New Hampshire border, ranked number one in the MIT study. It has 77 homes selling for less than the $370,000 median and 42 single-family homes selling for less than $300,000, according to the property network.

Many of Dracut's sub-$300,000 homes were built between 1900 and 1960, on lots less than half an acre -- a far cry from the town's minimum of one acre today. Realtor Brenda Beaudoin pointed to a dramatic example of older homes that could never be built now: summer cottage colonies on West Lake, Lake Massacupic, Peters Pond, and the Merrimack River built between the 1930s and 1950s and later turned into permanent housing.

"That's a big reason Dracut has so much affordable housing," she said. "As home prices escalated, people bought them to convert them into year-round houses." Many are Colonials of less than 1,500 square feet, on lots smaller than 5,000 square feet. Despite the cozy confines, many families have made them home, she said.

Dracut is close to Route 93 and Interstate 495. Boston is about a 40-minute commute, and Lowell's commuter rail station is just minutes away.

Like elsewhere in Massachusetts, homes prices in Dracut dropped when the market cooled. In 2006, the median sales price was $315,000, down 6 percent, from $335,000 in 2005, according to MLS Property.

Realtor Carole Barrett described Dracut as a blue-collar bedroom town that is "very community-oriented, with a small-town feel." Despite topping the MIT rankings, "it's still kind of a secret," she said.

Affordable homes that are less than 20 years old can be found at a development called Primrose Village, she said. Barrett's agency is selling a three-bedroom, two-bath Colonial there with 1,486 square feet and a porch for $262,000.

The cost of new houses is driven up by the state's scarcity of land, so starter homes are more likely to be older houses, said Boston realtor John A. Keith . They don't have to be perfect, because the average couple stays in such a house for only five years or less, he said.

"Every neighborhood and every city will have old pockets of homes," he said. "You might have to settle with one bath, the kitchen might have Corian countertops, not granite. The cupboards might need to be refaced, it might have linoleum floors, but the pride of ownership trumps all that."