According to the National Association of Realtors, the national average of housing affordability in 2009 was 169, which basically means that the typical family had an income that was 169% of the qualifying income to buy the median priced home in the community in which they lived.

Residents of this town can only afford 65% of the typical home selling in their community

Boston.com published a list of the 20 Massachusetts towns with the highest median income and the 20 towns with the lowest median income, so I came up with the median home prices in those communities (circa: 2009) and plugged the numbers into NAR’s affordability index calculation to determine which towns on the list were the least and most affordable.

Of the 34 towns I could obtain both median family income and median home sale prices, Weston, the Massachusetts town with the second highest median income, was by far the least affordable town to own a home. Weston had an affordability rating of just 65, meaning the median family income in Weston was only enough to qualify to buy 65% of the median priced home sale in Weston. So, it might be concluded that not only would the residents of Lawrence be more qualified to buy a home in their community than the residents of Weston, but Weston might be the least affordable town in all of Massachusetts. Surprising? I thought so. We don’t typically think that the citizens of our wealthiest communities are the most challenged to buy a home. Yet Weston wasn’t the only affluent community where residents appeared to be house rich and cash poor. The nine towns with the lowest affordability ratings in my analysis were among the state’s highest income communities. And perhaps, just as surprising, six of the state’s poorest communities were among the eight most affordable towns for residents to purchase a home.

Below I have listed the five least and five most affordable towns, with their affordability rating, from my analysis.

Least Affordable
1. Weston – 65
2. Dover – 83
3. Wellesley – 84
4. Cohasset – 97
5. Concord – 99

Most Affordable
1. Athol – 215
2. Southborough – 180
3. New Bedford – 176
4. Wenham – 171
5. Springfield – 165

Helpful links:

(http://www.boston.com/business/gallery/medianincomesinmass/)

(http://www.realtor.org/research/research/hameth)

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484 Charles, River is one of the highest assessed homes in Needham, MA

 

Brookline
1. 150 Woodland Rd              $17,431,000
2. 39 Sears Rd                        $10,873,000
3. 53 Sargent Crossway        $10,489,000
4. 209 Sargent Rd                   $9,514,000
5.  40 Cottage St                      $9,434,000

Weston
1. 5 Willow Rd                       $16,338,000
2. 38 Winsor Way                 $13,684,000
3. 63 Winsor Way                 $13,200,000
4.  118 Chestnut St                $12,009,000
5. 5 Concord Rd                    $10,793,000

Newton
1. 48 Sargent St                      $14,708,000
2. 98 Montvale                         $7,805,000
3. 100  Essex Rd                      $7,135,000
4.  32 Suffolk Rd                      $6,626,000
5. 40 The Ledges Rd                $6,626,000

Concord
1. 221 Balls Hill Rd                 $12,605,000
2. 130 Buttricks Hill Dr           $5,736,000
3. 495 Hugh Cargill Rd           $5,270,000
4. 1235-E Monument St          $5,149,000
5. 709 Monument St                $5014,000

Wellesley
1. 144 Edmunds Rd               $9,792,000
2. 5 Sabrina Road                   $8,395,000
3. 99 LIvingston                     $7,756,000
4. 170 Pond Rd                      $7,414,000
5. 209 Cliff Rd                        $7,129,000

Cambridge
1. 168- R Brattle St               $9,311,000
2.  88 Appleton St                  $7,977,000
3. 168 Brattle St                    $7,653,000
4. 163 Brattle St                    $7,414,000
5.  12 Lake View                   $7,202,000

Wayland
1. 4 Moore Rd                      $8,579,000
2. 45 Waltham Rd               $8,103,000
3. 52 High Rock Rd             $4,011,000
4. 16 Ellie Ln                        $3,230,000

Dover
1. 6 Wilsons Way                $8,057,000
2. 21 Claybrook Rd             $6,862,000
3. 8 Hamlns Xing                $6,220,000
4. 55 Farm St                      $5,620,000
5. 192 Claybrook Rd            $5,180,000

Lincoln
1. 6 Winchelsea Ln                $6,452,000
2. 133 Weston Rd                   $6,075,000
3. 109 Todd Pond Rd              $3,948,000
4. 23 S Great Rd                     $3,841,000

Needham
1. 1184 South St                     $4,702,000
2. 636 Charles River St          $4,074,000
3. 410 South St                       $4,048,000
4. 484 Charles River St          $3,398,000
5. 914 South St                        $3,257,000

Lexington
1. 7 Bennington Rd               $4,441,000
2. 23 Burroughs Rd               $2,835,000
3. 17 Hayes Ave                     $4,157,000
4. 132 Marrett Rd                 $3,621,000
5. 28 Oakmont Cir                $3,153,000

Somerville
1. 101 Orchard St                      $997,000
2. 115 College Ave                     $981,000
3. 137 Sycamore                       $960,000
4. 23 Chester                              $944,000

(Based on a BatesRealEstateReport analysis of MLS Public Records Section in December 2011)

 

150 Woodland, the highest assessed home in Brookline

 

I did an analysis of 2011 Single-Family-Sales median sale prices based on the year the home was built. It made for what appeared to be a very simple and understandable chart that simply showed the older the era of the house, the less the median sales price. But don’t get fooled by it. It’s not age that is devaluing the home, like miles on a car, it’s that the newer the era of the home, the more features and benefits the home has which are creating value.

The older the home, the lower the value?

For example, the average size of the newly constructed U.S. home grew from 983 square feet in 1950 to over 2,300 square feet in 2004 according to the National Association of Home Builders. Over that time period, consumer demand for extra-large and supersized homes in Greater Boston mirrored the national trends. In my analysis of the single family homes that sold in 2011 and were built between 1945 and 1969, roughly 4% were larger than 3,000 square feet and about 2% were larger than 4,000 square feet. Compare that to the 32% of homes constructed after 2000 (and sold in 2011) which were more than 3,000 square feet and the 14% which were larger than 4,000 square feet.

The newer, bigger homes had more bathrooms as well. Of the single family homes that sold in 2011 that were constructed between 1945 and 1969, only about 40% had more than one full bathroom and about 6% had at least three full baths. But of those constructed after 2000, 95% had more than one full bathroom and over 25% had at least three full baths.

There are a host of other features adding value to newer homes as well, including more efficient heating (insulation, high efficiency, etc), better cooling systems (central a/c) and fewer known hazardous materials (no lead paint, uffi or asbestos).

So, in terms of value, maybe some folks see the age of a home as a direct correlation to value and maybe others see… “The Bates Formula for Predicting Super High Home Values” as the lens for understanding value? LOL

Do you want to lower your monthly real estate payment?

Buy in a community with a low real estate tax rate.

Towns assess your home’s property tax contribution by first having the assessing department determine a value for your home and then multiplying the value by the town’s property tax rate. You’ll owe the town x number of dollars per thousand of the value assessment. So if you bought your $500K assessed home in Dover ($11.70 per thousand assessed) instead of Sherborn ($17.72 per thousand assessed), you’d pay $5,850 (500x$11.70=$5,850) in annual property taxes instead of $8,860 (500x$17.72=$8,860). That’s a savings of $250 a month, $3,000 a year or $30,000 over 10 years.

About a dozen Massachusetts communities offer a residential exemption on property taxes which is a further savings for owner occupied home owners. To get a residential exemption in these communities all you have to do is owner occupy the home you buy and let the city know that you are owner occupying it. For example, Cambridge offers a residential exemption and Newton doesn’t. So if you bought your $500K assessed home in Cambridge ($8.16 per thousand assessed) instead of Newton ($10.90 per thousand assessed) you would not only save $2.74 per thousand assessed, but you would also be able obtain a residential exemption of $198,095 off the assessed value on your Cambridge home, a savings of around $1,623 on your property taxes. End result, your Newton property tax bill would be $5,450  a year and your Cambridge tax bill after the residential exemption would only be $2,463 a year, a savings of around  $250 a month, $3,000 a year, or $30,000 over 10 years.

I have ranked the property tax rates of 50 key Massachusetts communities below. I have also noted the communities which offer Residential Exemptions as well as the amount of the exemption.

1. Springfield             $19.49
2. Sharon                   $19.47
3. Wayland                $19.35
4. Westborough        $18.24
5. Amherst                $18.20
6. Sherborn               $17.72
7. Boxboro                 $17.38
8. Sudbury                 $17.03
9. Carlisle                   $16.13
10. Framingham       $16.03
11. Everett                  $15.89
12. Randolph              $15.47
13. Revere                   $14.44
14. Lexington             $14.40
15. Dedham                $14.37
16. Watertown           $13.92 (Residential Exemption: $1,182.40)
17. Westwood             $13.83
18. Chelsea                  $13.81 (Residential Exemption: $685.20)
19. Malden                  $13.58 (Residential Exemption: $925.10)
20. North Andover     $13.52
21. Lynnfield               $13.49
22. Quincy                  $13.42
23. Belmont                $13.24
24. Concord                $13.10
25. Waltham               $13.09  (Residential Exemption: $1,027.44)
26. Boston                   $12.79   (Residential Exemption $1,628)
27. Somerville             $12.71   (Residential Exemption: $1,738.02)
28. Natick                   $12.60
29. Melrose                $12.46
30. Arlington             $12.41
31. Beverly                 $12.41
32. Lincoln                 $12.37
33. Stoneham            $12.21
34. Winchester          $12.10
35. Dover                   $11.70
36. Cohasset              $11.59
37. Wellesley             $11.43
38.  Weston               $11.39
39. Brookline             $11.30 (Residential Exemption: $1,864.50)
40. Needham            $10.90
41. Newton                $10.90
42. Saugus                 $10.62
43. Norwood             $10.10
44. Hyannis                $9.38
45. Cambridge            $8.16  (Residential Exemption: $1,679)
46. Provincetown       $6.81
47. Chatham               $4.28
48.  Nantucket            $3.58  (Residential Exemption: $1,000+/-)
49.  Edgartown           $3.40
50. Chilmark               $2.13

(Based on an analysis of MLS Public Records section conducted in February 2012. With the exception of just a few towns, 2011 Tax Rate is the rate listed. Residential Exemption amounts were determined by contacting town’s assessors office)

 

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Town/City Address High Sale
Weston 75 Doublet Hill $15,600,000
Wellesley 209 Cliff Road $6,800,000
Manchester 28 Masconomo $5,100,000
Brookline 35 Single Tree $4,900,000
Newton 33 Kingsbury $4,550,000
Marblehead 8 Davis Road $4,120,000
Cambridge 46 Brewster $3,869,000
Dover 203 Dedham $3,799,000
Duxbury 33 River Lane $3,325,000
Lincoln 78 Winter $2,950,000
Needham 11 Village Lane $2,800,000
Belmont 30 Audubon Lane $2,675,000
Lexington 8 Alcott Road $2,600,000
Winchester 3 Robinson Cir $2,600,000
Swampscott 50 Littles Point $2,500,000
Westwood 665 Clapboard Tree $2,500,000
Concord 79 Macon Farm Way $2,400,000
Andover 7 Manning Way $2,394,289
Mefield 66 Foundry $2,300,000
Sherborn 46 South main $2,025,000
Sudbury 40 Skyview Lane $2,000,000
Milton 118 Woodland Road $1,805,000
Rockport 15 Phillips $1,750,000
Ipswich 178 Argilla Road $1,700,000
Marshfield 1230 South River St $1,600,000
Natick 20 Apple Ridge drive $1,500,000
Beverly 7 tall Tree Drive $1,455,000
Quincy 17 Landgrane $1,305,000
Arlington 46 Candia $1,250,000
Canton 2 Navaho Drive $1,225,000
Wakefield Lot 11 Carriage Lane $1,100,000
Sharon 7 Kings Road $1,075,000
Somerville 8 Kingston $965,000
Waltham 59 Gilman $939,900
Saugus 2 Long Pond Dr $841,500
Melrose 8 Stratford $775,000
Meford 34 Mammola Way $768,500

(Based on information collected from MLSPIN for the settled dates 1/1/11 – 12/31/11)

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.

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If you are going to buy a single-family home in the most prized parts of Boston — the Back Bay, South End or Beacon Hill — then 83 percent of the time you are going to spend more than $1 million (MLS cumulative statistics, 2004-2009). But if you are going to live in a single-family home outside the city, then Weston is the town that you are most likely to spend $1 million. Between 2004 and 2009, 64 percent of Weston’s homes sales were for more than $1 million.

With 56 percent of the single-family home sales topping the million mark, Brookline was the second most likely place where your home purchase cost over $1 million dollars. Lincoln was third (53 percent) and Dover fourth (49 percent).

Wellesley nearly doubled the amount of Weston’s sales that topped the million mark (956 to 490), but because Wellesley sold nearly three times as many homes as Weston, it meant that only 48 percent of the Wellesley’s single-family sales were more than $1 million, which meant it ranked fifth.

Newton, the tenth-largest city in the state and the most voluminous for million dollar sales (933 single-families and 96 condos), ranked 11th for percentage of single family sales over $1 million (27 percent)

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What does the highest-priced home sale in a community tell us about value in that community? Was the ultimate value the community could produce in any given year limited by the excellence of the best available property for sale? Or was the maximum dollar amount garnered in that town for residential real estate limited by forces outside the community? Perhaps, at that particular time and in that particular community, consumers would not pay one dollar more for a property? And in our competitive world, if a town can have a higher-priced sale than its neighbors, does it mean that it’s somehow perceived as more valuable by consumers than the lesser-priced maximum sale in another community? These are questions to ponder as we look at the 2009 highest-priced sales ranked by community.

Although each community gave its best, only one managed to have a home that had all the right features of “location, location, location,” condition and amenities to find a buyer willing to pay $7 million — and that was in Beacon Hill. Outside Boston, Manchester did the best with a sale that topped $6 million. Beverly and Wellesley sold residential homes in excess of $5 million. Cambridge, Dover, Winchester and Brookline had sales that topped $4 million. In one of the toughest years ever in real estate, 24 different towns in the Greater Boston MLS were able to have homes sell in excess of $2 million.

In some communities, there was a significant difference between the highest-priced sale and the second-highest-priced sale, which seemed to indicate that the highest-priced sale in a town was determined by how good was the best available property. Such was the case in Natick, where the highest-priced sale was more than 60 percent higher than the next best.

In other communities, there truly seemed to be a ceiling. While no less than 50 cities and towns in the Greater Boston MLS accomplished million-dollar sales in 2009, Braintree, Quincy and Pembroke topped out at $975,000. Was there anything that would’ve taken one of them over the top? Was there anything that would have caused a buyer to pony up another $25,000 so that the community would have had a million-dollar sale, like Worcester did, or were buyers subtly delivering the news that those are not to be considered million dollar communities?

Conventional wisdom holds that you shouldn’t buy the highest-priced home on the street — but what does it say about buying the highest-priced home in an entire town? That’s a question perhaps best answered by the buyers of the properties listed below, which were the highest-priced sales in their communities.

Where does your town rank?

Rank Town Address Top Price
1 Boston 56 Chestnut $7,000,000
2 Manchester 00 Summer $6,332,250
3 Wellesley 59 Ledgeway $5,960,000
4 Beverly 75 West Street $5,000,000
5 Cambridge 8 Hilliard $4,850,000
6 Dover 72 Farm St $4,420,000
7 Winchester 3 Central Green $4,100,000
8 Brookline 49 Woodland $4,000,000
9 Weston 281 Country Drive $3,775,000
10 Nahant 3 Swallow Cove Road $3,575,000
11 Newton 107 Waban Hill $3,475,000
12 Barnstable 262 & 265 Ocean Drive $3,250,000
13 Carlisle 211 Bellow Hills Road $3,250,000
14 Marblehead 33 Bradlee Rd $3,211,000
15 Westwood Lot 126 Summer St $3,010,910
16 Sudbury Lot 14 Kato Summit $3,010,000
17 Needham 47 Southwood Lane $2,859,000
18 Mashpee 31 Starboard Lane $2,850,000
19 Lincoln 39 Tabor Hill $2,600,000
20 Marshfield 1233 Union $2,337,000
21 Dartmouth 72 Elm St $2,325,000
22 Hingham 52 Fearing $2,300,000
23 Duxbury 21 River Lane $2,125,000
24 Lexington 24 Burroughs Road $2,110,000
25 Wayland Lot 7 Hidden Springs $2,100,000
26 Natick 116 Elliot $1,950,000
27 Topsfield 123 Asbury St $1,875,000
28 Milton 59 Highland $1,715,000
29 Framingham 1064 Grove $1,712,000
30 Hull 20 Summit Ave $1,700,000
31 Gloucester 130 Hesperus Ave $1,620,000
32 Hamilton 675 Bay Road $1,600,000
33 Lynnefield 6 Joseph Lambert $1,580,000
34 Newburyport 386 Merrimac $1,575,000
35 Mansfield 31 Carriage Lane $1,560,000
36 Andover 15 Regency Ridge $1,520,000
37 Essex 51 Lufkin Point $1,520,000
38 Medfield 273 Noth St $1,490,000
39 Hopkinton Lot 55 Connelly Hill Road $1,454,000
40 Scituate 16 Barrys Landing $1,375,000
41 Ipswich 6 Mill $1,350,000
42 Plymouth 44 Five Lanterns Ln $1,340,625
43 Wakefield 127 Chestnut St $1,265,000
44 Melrose 26 Bellevue $1,200,000
45 Newbury 18 High St $1,200,000
46 Norfolk 3 Keeney Pond Road $1,150,000
47 Somerville 1 Benton $1,100,000
48 North Andover Lot 5 Abbey Ln $1,075,000
49 Waltham 58 Matthew Lane $1,052,000
50 Worcester 6 Academy $1,000,000
51 Braintree Lot 4 Oregon Ave $975,000
52 Pembroke 32 Canoe Club Ln $975,000
53 Quincy 46 Crabtree $975,000
54 Watertown 25 Russell Ave $967,500
55 Foxboro 4 Alice Bradley Lane $949,000
56 Holliston 6 Deer Run $940,000
57 Boxborough 394 Littlefield $927,500
58 Hanover 43 Forest St $910,000
59 Canton 23 Cherokee $900,000
60 Marlborough 87 Stetson $880,000
61 Salem 376 Essex $870,000
62 Burlington 10 McCafferty Way $784,900
63 Saugus 12 Vinegar Hill $770,000
64 Medford 26 Woodland $759,000
65 Danvers 40 North St $735,000
66 Peabody 5 Lantern Ln $710,000
67 Lowell 24 Harland Ave $682,250
68 Norwood Lot 3 629 Nahatan $680,000
69 Stoneham 2 Thomas Cir $650,000
70 Millis Lot 16 Orchard St $629,000
71 Haverhill 45 Seven Sister $525,000
72 Brockton 29 Rockmeadow $510,000
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