An Up-and-Coming Million-Dollar Community
David Bates / March 8, 2011-1:42 pm
Needham, a town bordered by three perennial high-volume million-dollar-selling communities (Newton, Wellesley and Dover) is about to become a town known for its own high volume of million-dollar sales.
In 2004, Needham recorded 50 million dollar single-family sales in MLS. In 2007, it registered 63. And in 2010, with 71 million-dollar sales, it was the 5th most prolific suburb in Greater Boston in that category. Needham is also the only community that this blog covers that had more million-dollar sales in 2010 than it did in 2007 or 2004.
Why has Needham boomed when other million-dollar towns busted? I believe it has to do with the fact that this nice suburb — complete with a solid school system — is becoming an “up-and-coming” million-dollar community.
Residents of more established communities believe buyers will flock to their community based on reputation. As such, sellers in those communities typically don’t spend time updating and upgrading (maybe that’s why you don’t see Home Depots in established luxury communities like Newton, Wellesley and Dover?). Up-and-coming towns, on the other hand, are always known for great finishes. These communities use new, bright and shiny features and benefits to make up for the lack of a high-browed reputation. This certainly seems to be the case with Needham versus its neighbors. In 2010, 62 percent of Needham’s million-dollar sales had been built within the last three years. That’s about five times the rate of neighboring Newton (about 12 percent) and 2.5 times the rate of neighboring Wellesley (about 25 percent). Outside of real estate, “new” beats “used” every day of the week, so it’s no wonder that many buyers chose Needham’s new construction over the “classic” options in neighboring communities.
And if million-dollar buyers were just considering new construction homes, they would see Needham’s new million-dollar construction listings sold for $1.37 million on average, more than $500K less than Newton ($1.89 million average) and $800K less than Wellesley ($2.17 million average). So it’s no wonder why many new construction buyers bought in Needham.
If these value discrepancies continue, Needham’s million-dollar sales growth is sure to continue, as well.