Tuesday, March 22, 2011

MARKET TRENDS: Home prices resilient in the beltway

Both Route 128 and its sister suburban beltway, Interstate 495, are vaunted technology corridors. But when it comes to home values, they are miles apart.

Though the economic crisis hit housing markets in both regions, prices along Route 128 suffered a milder fall and in some communities had nearly recovered as of last year.

Of eight cities and towns along Route 128 from Burlington to Dedham, only two saw median single-family home prices fall more than 10 percent between 2005 and 2010, according to data from the Warren Group. Lexington showed the most resilience, slipping just 1.5 percent.

It’s a different story along I-495. Of a dozen communities stretching from Littleton to Plainville, all but one saw price declines of more than 10 percent. Milford took the biggest hit: 27.4 percent.

It’s a contrast that makes Paul Yorkis, president of Patriot Real Estate in Medway and a veteran of the I-495 market, a bit envious.

“I was just talking with a friend and fellow realtor who does business within 128,’’ Yorkis said. “Good homes are receiving multiple offers.’’

He’s now hoping that some buyers, priced out of the 128 market, will make it out his way.

So what’s to explain the resilience of home prices along Route 128?

Well there’s no one simple answer. Proximity to Boston certainly plays a big role. John Prescott, who makes his living selling homes along the 128 corridor, says most newcomers are more familiar with those towns than with their cousins along 495.

“If you travel somewhere, it’s more likely someone in California will have heard the name Wellesley than Boxborough,’’ Prescott said. “Wellesley is a pretty well- known name around the country and even around the world.’’

And if they find Wellesley is a bit pricey, they are likely to end up in another town in the area. He pointed to a European executive who put down $1.1 million for a home in Natick after initially looking around Wellesley.

Median prices in 2010 ranged from a high of nearly $1.1 million in Weston to $346,850 in Dedham. Other towns along the Route 128 corridor included Burlington ($382,000), Lexington ($694,250), Newton ($735,000), Waltham ($385,000), Needham ($630,000), and Wellesley ($900,000), according to the Warren Group.

Median housing prices along I-495 last year ranged from $248,000 in Bellingham to $519,500 in Hopkinton.

There’s also a difference in how fast homes are selling along the two tech corridors.

A well-priced home along the 128 corridor, say in Lexington, can easily spark a bidding war and sell within a week or two. Even if it’s well priced, a home along 495 can still take longer to sell.

“You are talking still in months, not in days,’’ Yorkis said.

Compounding the mystery, if it were just about the quality and size of the homes, I-495 might be the one holding up better now. For what you might spend for a somewhat worn 2,000-square-foot 1960s Colonial along 128, you could probably find a brand new, 3,200-square-foot home along 495, Yorkis noted.

Yet it’s not so much that I-495 is a laggard as that Route 128 has successfully defied real estate gravity.

To put it all in perspective, median home prices across Massachusetts have fallen roughly 20 percent since 2005, according to the Warren Group.

Traffic alerts
Stressed out 128 commuters may soon be turning to a new number for help: 511.

The 128 Corporate Alliance is in talks with state officials about ways to get better and more timely traffic alerts out to the hundreds of thousands of commuters who drive along 128 each day.

One possibility is building upon a system of traffic alerts already in place that uses the 511 bandwidth, said Jack Troast, a commercial real estate executive and former Romney administration economic development expert who launched the alliance in 2009.

Sendza, a private Massachusetts company, already runs such a system on behalf of state highway officials. It enables commuters to punch in their commute and then get regular traffic condition updates on their cellphones.

The system is essentially advertiser supported, with companies or organizations paying for the chance to hawk their services just before the alert comes on.

“We are on the precipice of some pretty interesting technologies here,’’ Troast said.

Scott Van Voorhis Boston Globe March 13, 2011

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