Twelve of the state’s fastest-growing communities experienced a sharp rise in home prices over the last decade – in most cases surpassing the state average increase. In dozens of Massachusetts towns, buyers spent nearly twice as much on single-family homes last year than they would have 10 years ago.
Across the state, communities saw median home prices rise 36.7 percent – from $144,900 to $198,000 – during the last decade.
But many communities saw their home prices jump 50 percent or more, according to information provided by Warren Information Services, Banker & Tradesman’s sister company. Those statistics are based on all single-family homes sold in 1990 and 2000 for $100 and above.
The rise in single-family home prices is particularly notable in communities with more than 5,000 residents that grew 30 percent or more based on recently released U.S. Census data. Those communities saw median prices for single-family homes escalate anywhere from 34 percent to a whopping 228 percent during the last decade, with 11 of the 12 cities and towns in that category exceeding the statewide median.
Many Bay State communities grew at such a rapid pace that Realtors and developers couldn’t keep up with customer demand, leading to skyrocketing home prices.
“It’s been a very interesting market to work in,” said Chuck Joseph, owner-broker of Re/Max Executive Realty, which sells homes in Franklin, Hopkinton and other towns. “Buyers are very frustrated by the tremendous lack of inventory. There has been much more buyer demand than availability of product.”
Nantucket, which grew 58 percent during the past 10 years – from 6,012 to 9,520 residents – saw one of the biggest home price hikes. In 1990, the median price for a single-family home in Nantucket was $235,000. Last year it ballooned to $771,150 – a 228 percent increase. Sales of single-family homes also jumped 84 percent. Only 125 single-family homes were sold in 1990, compared to 231 homes last year.
Other similar spikes occurred in Middleton, Hopkinton, Southborough, Mendon, Mashpee, Kingston, Franklin, Shrewsbury, Mansfield, Sandwich and Berkley.
In suburban Middleton, located in Essex County, new home construction took off during the last few years and is expected to continue, Realtors say.
Sales of single-family homes shot up 127 percent over the last decade, and so did prices. The median price for a single-family home in Middleton increased from $142,000 to $300,000, a 111 percent increase.
Some 7,744 people lived in that town last year, a 57 percent increase from the 4,921 population recorded in the 1990 census.
Chris Economo, regional vice president and manager of Coldwell Banker Hunneman, said Middleton has all the ingredients to make it even more popular.
Land is available and the community has an excellent school system and good access to major roadways, notably Route 114 and Interstates 93 and 95, he said.
Coldwell Banker Hunneman recognized the value of Middleton and opened its Danvers office three years ago to focus on the area. Last year, 26 percent of all sales in Middleton were handled by Coldwell Banker Hunneman, according to Economo.
Economo said he expects new home construction to continue at a fast pace because families want to move to the area for the reputable school system. And Middleton’s development rules aren’t overly restrictive, Economo said.
Years ago, towns along Route 128 were booming, but since most of those communities have already been heavily developed and land is scarce, Economo said people are turning to areas like Middleton.
“Middleton is still a town to develop in,” Economo said. “It still has available land and it has an excellent school system.”
A Taxing Issue
Located more than 85 miles south of Middleton, Mashpee has seen its own kind of growth over the last two decades.
Mashpee, situated on the southeast coast of Cape Cod between Falmouth and Hyannis, grew 64 percent – from 7,884 residents in 1990 to nearly 13,000 in 2000. Single-family home sales volume surged 326 percent. Only 83 single-family homes were sold in 1990, compared to 354 recorded sales last year.
The increased sales corresponded with higher home prices. The median price for a single-family home rose 62 percent, from $123,400 to $199,950.
Five years ago it wasn’t unusual for a Mashpee home to linger on the market for nine months, said Realtor Jamie Regan, broker/owner of Century 21 Regan Realtors in Mashpee. Today, a similar home is on the market only six weeks to 90 days, he said.
Business was much slower for Mashpee Realtors in the 1970s and early 1980s because of a lawsuit brought by a Native American tribe seeking to hold onto land, Regan said.
When the issue was resolved, the real estate industry revived, he said. The town experienced growth over the next 20 years, with a slight lull during the recession.
Today, Mashpee residents fall into three categories: year-round dwellers, summer vacationers and retirees.
Over the years, many people over 50 flocked to Mashpee, building new homes for a lot less money. Older customers, many of whom were not yet retired, would sell their $400,000 suburban homes in Greater Boston and other areas, and buy a similar or better home on the Cape for $100,000 less, Regan said.
These customers were benefiting from what Regan and other Realtors call the “Cape Cod windfall.” But Regan can’t say for sure if the trend is going to continue.
“What we’ve seen in the past few years is that the windfall is shrinking,” said Regan, a certified residential specialist and certified residential broker.
Even so, Regan said he has seen a number of adult communities catering to people 55 and over spring up all over Cape Cod.
“They can’t seem to build them fast enough,” he said.
However, the supply of buildable land in Mashpee and on Cape Cod in general is quickly diminishing, pushing home prices even higher, he said.
“We’re right around the corner on build-out,” Regan said of Mashpee.
Regan said in the future, instead of looking for lots to build a new house, more buyers will be renovating outdated homes along the coast or tearing them down to build new ones.
This population and price surge has kept Realtors in many communities on their toes.
Joseph, of Re/Max Executive Realty, said the high prices and lack of available homes often force clients searching in Hopkinton and other fast-growing towns to look in other communities for something more affordable.
Hopkinton grew 45 percent over the last 10 years – from 9,191 to 13,346 residents. Some 108 single-family homes were sold last year, compared to 202 in 1990, representing an 87 percent increase.
Along with the rapid growth in Hopkinton came higher home prices. Even though the percentage increase in Hopkinton single-family home prices was slightly below the state average, homebuyers in that town were still paying $75,000 more for a home than they would have 10 years ago.
Hopkinton, a suburb of rolling hills located at the intersection of Interstate 495 and the Massachusetts Turnpike, started experiencing its boom in the late 1980s. Professional couples came to the area because of its easy highway access and its location between the state’s two largest cities, Boston and Worcester, Realtors said.
As companies started discovering I-495 and its lower rents, Hopkinton and nearby communities continued growing because many more workers were searching for homes in the region.
While development took off during those years, Joseph said he expects a slowdown in new home construction over the next few years because there is no available land.
Instead, Joseph said he sees other trends developing in Hopkinton. A lot of older homeowners, daunted by the escalation in real estate taxes resulting from home price increases, are moving.
Homeowners whose school-age children have grown and moved out are heading for more affordable communities where school systems are not as well-regarded, Joseph said.
“Real estate taxes in particular are becoming an issue for a lot of folks,” Joseph said. “Many people are looking at their current needs and saying, ‘My needs don’t match what these taxes are buying.'”
But in contrast to some of the older homeowners, Hopkinton residents with children are staying put.
Hopkinton families wanting to “trade up” to a newer and bigger house are searching for homes within Hopkinton instead of moving to other towns, Joseph said. And that trend is likely to continue, he said.
“They don’t want to trade up to other communities,” Joseph said of Hopkinton families with school-age children.
