Recovery seen along 128, but outskirts lag
Home prices are hitting new highs in Weston and even nearing peak territory again in Burlington.
And while home values in some of the other affluent communities along Route 128 west of Boston dropped over the past year, most remain a mere 10 percent or so from the record numbers reached before the last recession.
But the same can’t be said for real estate values along the Interstate 495 corridor, which took another beating this past year and are in some towns 40 to 50 percent down from their peak in 2005-2006.
“It’s just ready access to the city – the further away you get away from the center, the more likely you are to see the swings in value,” said Alex Coon, market manager for the Boston area office of Redfin, an online real estate brokerage.
A comparison of year-to-date values between this April and the same period in 2004, 2005, and 2006 reveals some dizzying home price declines along the I-495 corridor.
Just take US Senator Scott Brown’s hometown of Wrentham, where the median home price has dropped from a peak of just under $500,000 in April 2006 to $262,000 in April, according to the Warren Group, publisher of Banker & Tradesman.
Plainville saw an even bigger collapse, from a high of $460,000 in April 2006, to $201,000 this April.
Meanwhile, Milford has seen prices fall more than 30 percent since April 2006, when they stood at $334,750, to $210,000 in April. Franklin, in turn, has seen a 24 percent drop in its median price, from $444,000 in April 2006 to $338,750 this April, Warren Group figures show.
Towns along the western and northern stretches of 495 have also taken it on the chin with prices, with Bolton’s median plunging from $600,000 in April 2004 to $397,000 this April.
Other 495 communities, such as Marlborough, Westborough, and Littleton, have fared somewhat better, but generally have seen declines of well beyond the 10 percent mark.
Along Route 128 though, there is little sign of the downturn that has kept home prices in turmoil for years now in Massachusetts and across the country.
Weston’s $1.4 million median home price is now higher than its last peak of $1.3 million in 2005, while Burlington, at nearly $394,500, is not far from the $405,000 median price the town reached back in 2005.
A popular hometown for CEO’s, Weston’s ever higher home prices are not exactly a big mystery.
Burlington, by contrast, has seen prices edge up, in part, because it has become an alternative for buyers who don’t want to spend another $200,000 to $300,000 to get into Lexington or Newton, Redfin’s Coon said.
The sprawling town at the intersection of Route 128 and Route 3, an area with millions of square feet of retail and office space, is at the vanguard of the corridor’s comeback from the recession, stealing some buzz from Waltham with a proposed $500 million redevelopment project.
The Northwest Park proposal calls for a boulevard of local restaurants leading to a new, 140,000-square-foot Wegmans supermarket, among other attractions.
“What bubble?” asked Redfin’s Coon. “It’s just a little bit of air out of the balloon.”
Newton, Needham, and Lexington are still no more than 10 percent away from their last home price peak reached in the mid-2000s.
After a tough 2011, Lexington’s median home price stood at $637,000 this April, having dropped from $697,000 last year. Yet it is still just a little over 10 percent off its April 2006 peak, when it hit $713,500.
Newton and Needham saw price drops over the past year, to $726,000 and $570,000, respectively, this April.
But both remain within striking distance of their last market peaks in 2005, when the median price hit $768,000 in Newton and $628,000 in Needham.
Waltham and Wellesley by contrast, have been the hardest hit, with prices in both towns now off more than 20 percent from their last peaks.
Wellesley’s median price, at $775,715 in April, is high by any measure, but still represents a sharp decline from 2006, when it stood at just over $1 million, the Warren Group reports.
Waltham’s median price fell more than 20 percent, to $332,250 in April compared with $424,750 in April 2005. OK, where does this all leave homeowners along Interstate 495, in the shadow of all those towns along Route 128/Interstate 95 where prices never really seem to decline?
Well, as already high prices get even higher along 128, that should push more and more priced-out homebuyers out to 495 and beyond, said Ned Mahoney, a broker at RE/MAX Leading Edge in Newton.
After all, buyers hoping to stay under half a million dollars are going to have more options along 495 than near 128.
“Homes are flying off the market in Brookline and Newton where they weren’t a year or two ago,” Mahoney said. “There will be a ripple effect moving west.”
That ripple effect may already be starting to happen.
The number of homes changing hands is also picking up statewide, with a 22 percent jump in homes sold in April compared with the same month the year before, the Warren Group reported.
“Historically, it’s always been difficult to tell when you have hit the bottom, but based on the number of properties that have multiple offers on them, the market has at least stabilized,” said Chuck Joseph, owner of RE/MAX Executive Realty in Franklin.
Scott Van Voorhis can be reached at firstname.lastname@example.org.