Some Mass. areas see a rise in home values
Home values in Massachusetts have dropped about 17 percent since their peak in 2005, but that doesn’t mean sellers in Brookline, Arlington or Winchester have to expect steep price cuts when they put their homes on the market.
Indeed, more than twenty Massachusetts towns - including smaller municipalities such as Granby to the west and Manchester-by-the-Sea on the North Shore, have experienced increases in single-family median-home prices during the first six months of 2011 compared to the same time in 2005 at the peak of the local housing market, according to a data supplied by Warren Group, a Boston company that tracks local real estate.
The increasing values reflect a mantra in real estate thinking: All real estate is local. Some Massachusetts towns weathered the economic downturn better than others largely do to reputations for good school systems and proximity to Boston or other large cities, universities and employment, real estate specialists say. Other Massachusetts municipalities such as Brockton, Gardner, and Hyannis were hard hit by the subprime crisis and the economic downturn, with single-family median prices falling more than 40 percent since 2005, according to Warren data.
Purchasing homes in distressed areas can provide attractive bargains for buyers looking for a bigger house or a long-term investment. However, Timothy Warren, chief executive of Warren Group, said many smart homebuyers should consider the stability of a town when purchasing property now. “People tell you to buy the cheapest house on the best street you can afford,’’ he said. “The same thing holds true for towns.’’
Brookline - one of Boston’s immediate neighbors - held at $1.16 million during the first six months of the year, up 11 percent compared to the same time in 2005, according to Warren data. Chobee Hoy, head of Chobee Hoy Associates Real Estate Inc., attributed the town’s strength to good schools, public transportation, and a diverse community. She said many people from other countries contact her office interested in moving to Brookline, lured by its strong reputation.
“It is a combination of being so close to Boston and also the services,’’ she said. “The school system is first rate. We have public transportation all over the place.’’
Communities like Charlestown have seen a revitalization over the last decade as more young couples decide to stay in the area and raise children, said Frank Celeste, with Gibson Sotheby’s International Realty in Charlestown. He said the local elementary school, the Warren Prescott K-8, is increasingly popular. Median home prices were at $630,000 during the first six months of 2011, up 15 percent compared to the same period in 2005. “As soon as there was a hint of a child they would flee to the suburbs,’’ Celeste said about past generations. “Now they are making a commitment.’’
Farther out, Manchester-by-the-Sea enjoyed a spike in its single-family median price this year partly because of its popularity and the sale of several multimillion properties that likely skewed values upward, according to Jon Gray, chief executive of J. Barrett & Company LLC, a real estate company that focuses on the North Shore. Gray said good schools, the commuter rail, and the beach have lured many families to the area, pushing the median home price to $791,250 for the first six months of 2011.
“There’s a lot of people buying with cash and say this is the time to invest in real estate,’’ Gray said. “It’s a great town with great schools and a great tax rate.’’
The small town of Granby, outside of Springfield, traditionally has fared well during housing downturns because it is a quaint community next to a cluster of universities including Mount Holyoke College, Amherst College, and the University of Massachusetts Amherst, said Gayle Demary, a real estate agent at Brooks Real Estate in Granby. Median prices for single-family homes between January and June rose to $248,700 in 2011, compared to $208,894 during the same period in 2005. “There has been an upswing in the prices of homes,’’ she said. “It is a small pleasant community.’’
Overall, however, most Massachusetts towns have not recovered from the US housing crisis that has stalled sales and dropped prices from Dorchester to Western Massachusetts. The town of Bourne, which bills itself as the gateway to Cape Cod, has seen its median price for single-family homes drop about 35 percent since 2005 to $245,000 for the first six months of 2011, according to Warren data.
Joseph Melanson, a real estate broker at Century 21 Bourne Landing in Buzzards Bay, said values have sunk so low because many financially troubled homeowners had to sell their second homes in an area with few jobs - and he expects prices to still fall further. Melanson tells buyers now to purchase not as an investment but because they want to enjoy the house - and plan on owning for five to 10 years.
“Some people are absolutely shocked at what their homes are worth,’’ said Melanson.
Brockton also was hard hit by the downturn - with median home prices plunging to $152,000 in the first six months of 2011, a 43.7 percent drop from the same time in 2005. This has turned many local real estate agents into specialists in foreclosures and short sales, a process in which a homeowner sells a property for less than the size of the mortgage with the agreement of the lender.
Terri Tobin-Young, a real estate agent at Copperwood Real Estate in Brockton, said distressed home sales can take a long time and be emotionally painful for troubled homeowners. Despite low prices, she said sales have been slow with the exception of some investors looking for deeply discounted properties. “There are investors who are out there who are snapping these up who are not going to be good landlords,’’ she said.
Jenifer B. McKim can be reached at firstname.lastname@example.org.