The Biggest Bang for the Buck
Remember 2002, when stock charts went vertical and pink slips fell like rain? Surely, said the real estate gods, housing prices would be next to plummet. The newspapers were filled with so much talk of the vaunted real estate bubble, they read like the year-end report at Hubba Bubba.
Never happened. Prices are now more than double what they were just five years ago, houses in the once-sleepy farm communities around I-495 are going for a million dollars plus, and bids are ending at $25,000 over the asking price.
“I think all the experts who were so glib with the bubble talk are hiding in their closets right now,” says Terence Egan, editor of the weekly local real estate and banking newspaper Banker & Tradesman. “The bottom line is, demand is still outstripping supply, and you aren't going to see a drop-off anytime soon.” At least, he says, appreciation is now in the single digits, not the 20 percent that confronted homebuyers in some MetroWest and South Shore towns in past years (and delighted those already snug around their hearths). Even so, single-family home prices here rose by 9 percent last year, not exactly reassuring news for buys.
So why did last year see record area home sales? Two words: interest rates. To arouse an intractable economy, a slap-happy Alan Greenspan has become the borrower's best friend as hearts that may have balked at 7 percent now thrill at 51/2.
The trick is in knowing where to put your money. When you need a minimum of three hundred thou to enter the market in most towns, finding a bargain is a laughable proposition. The concept of value, on the other hand, depends more on what you get for your money than on how much money you spend.
So, to figure out which towns give you the biggest bang for your buck, we let the numbers do the talking. We sifted through the minutiae of property taxes, MCAS scores, crime stats,budget line items — even library holdings — then compared median home prices to find out which towns in each price bracket are really worth the money. What we found surprised even us. (Framingham?) “The biggest thing that stood out was the diversity of towns that appear in the top 25,” says I. Elaine Allen, a statistician at Babson College who crunched the numbers for us. (See methodology, page 148.) “We have some blue-collar towns as well as some towns that are known to have the best education and open space. The fact remains that you can find great values for homes in typically underrated communities.”
After all, you don't always get what you pay for. Sometimes you get more.
Take Wayland. If Wayland were a car, it would be a Toyota Camry. Not as flashy as the Lexuses next door in Weston, not as showy as the SUVs in Wellesley. But, metaphorically speaking, it can keep up on the highway, accelerate when you need it to, and still command value on the resale block.
Like a Toyota, Wayland offers something for everyone. “The school system is second to none,” says real estate agent Barbara Matyi, who has lived in Wayland herself for more than 20 years. “There's lots of conservation land, and at the farthest, you are half an hour from Boston.” The numbers back her up: MCAS scores and the percentage of Wayland students bound for four-year colleges are in the top 10 in the region, while more than 40 percent of the town is open space. Yet Wayland's median home price is near $525,000, just about half that of Weston's cool million and significantly less than Wellesley's $750,000.
Part of the reason for that discrepancy is in the housing stock. Unlike neighboring towns, Wayland has stuck to bylaws that prohibit the tear-downs and mansionization that spread like wildfire through MetroWest in the Roaring '80s. It's filled with more modest slab ranches and bungalows, with a smattering of Colonials and Capes. That makes it affordable to people like Wendy Millet, a single woman who grew up in Wayland and was able to move back last year after throwing up her hands at ever being able to afford to live in communities like Newton. There, she says, prices “were to the point where I would need to reevaluate eating on a regular basis.” With the help of real estate agent Elaine Sweeney, Millet found an “adorable little bungalow” in the south Wayland neighborhood of Cochituate for under $300,000. In the bargain, she bought into a close community with various income levels, where she says she feels welcome as a single woman. And it's still only 10 minutes from the Mass. Pike — and 5 miles from where she grew up. “As a kid, I couldn't wait to get out of Wayland,” she says. “Now I couldn't wait to get back in.”
Real estate agent Matyi says housing stock and proximity to Boston tell only half the tale when comparing Wayland to its “W” neighbors: The rest she chalks up to “snob appeal.” “A lot of people say they have to live in Weston, or we have to live in Wellesley. Which is sad because it does Wayland a great injustice. In terms of value, you can't compare the value overall unless you compare the lifestyle as well.” In other words, reputation can overvalue one town and correspondingly undervalue another. “In real estate, it's all location, location, location,” says another real estate professional who asked not to be named, “but the second factor is address, address, address. Weston is a tony address, Lynnfield is a good address.” But he says you can live a half-mile away and pay half as much.
That's certainly the case when you compare Concord to its neighbor Acton. Though parts of the two towns have almost identical housing stock, the historical cachet of Walden Pond and the Old North Bridge helps boost Concord's median home price by $200,000. Yet, like Wayland, Acton has some of the best education outcomes in the state. “School was the primary factor in all of our searching,” says Christopher Whitley, a nurse who, along with his wife, Karen, an attorney, bought a four-bedroom Colonial in Acton two years ago. For less than $600,000, the Whitleys got two acres of land and a swimming pool — more than they found in either Concord or Stow, the towns where they grew up. “We think we got a lot of house for the money,” Whitley says. “Concord was pretty pricey. In Acton we paid for and received what we thought was fair.”
Oddly enough, reputation has had the opposite effect in the North Shore community of Marblehead, which came in at the top of our rankings, despite its reputation as an exclusive seaside community. “Think of it this way,” says Leslie Gould, executive director of the Marblehead Chamber of Commerce: “Most men think a beautiful woman is unapproachable. Am I wrong? It's the same thing with this town. People see all this beauty and all the money in the harbor, and they think, Oh, they must be really stuffy up there. But we're not.”
Indeed, when most people think of Marblehead, they are apt to picture the grand mansions on the bluffs of Marblehead Neck, overlooking the lobster buoys bobbing in the harbor. But while it's easy to pay seven figures for one of the all-brick Federal houses with yachts in their front yards, the fact is that saltbox Colonials and workingmen's cottages are peppered among them. “If you had asked me to guess Marblehead's median home price,” says one real estate professional, “I'd probably say it was about $850,000.” The real number is about half that — $480,000.
“There are homes to fit everybody's budget,” confirms Marblehead real estate agent Marion McCauley. “It would probably be difficult to find anything under $400,000, but there's lots of wonderful neighborhoods where you can get a nice home for around that much.” Recent transplant Corey Tapper, for example, found a three-bedroom Colonial with a small yard for $484,000. “When you tell people you live in Marblehead, they think you're loaded,” he says. “I wish that was the case, but I don't see any millionaires in my neighborhood.” No matter what part of town homebuyers pick, they enjoy the perks of living on a peninsula with enviable access to the water, a vibrant cultural scene with a well-stocked library and four museums, and even discounted sailing lessons. But because of the downtown commercial base — not to mention the taxes from those mansions on the Neck — Marblehead's property tax rate is only $8.42 per $1,000 valuation — the sixth-lowest in the region. The downside: Because Marblehead is away from the main highways, it's a longer commute to Boston than it looks like on a map.
It doesn't take a statistician to figure out that value for money decreases as you get closer to the city. But it does take one to tell you by how much: According to the model created by Babson's Allen, every mile you get closer to the city adds $3,000 to the median home price.
Consider the savings, then, of living in the inner suburbs of Wakefield or Melrose, both of which come in at a median home price of less than $400,000, despite being less than 15 miles from the city. With their modest-sized house lots and retro downtowns, both communities strike a balance between congested mill towns such as Lynn and ritzy bedroom suburbs like Lynnfield. The difference between Wakefield and Melrose is primarily one of age: Wakefield features modern split-level ranches and newer Colonial-style homes, while Melrose tends toward an older stock of stately Victorians. “We drove through Melrose and fell in love with the main street,” says Kate Bowers, a fashion editor who moved with her architect husband, Michael, from California in December of 2002. After renting for eight months on Beacon Hill, the couple wanted to live outside the city and spent months looking for an affordable, close-to-Boston home. “Winchester is a fabulous town, but it's not worth it to live in a tiny house no bigger than a condo,” says Bowers. “Belmont was depressing — we asked to see stuff in our price range, and the only thing on the market under $485,000 was a teeny-weeny ranch that looked like a glorified storage shed. That was the beginning and the end of our search in Belmont.”
After a friend mentioned Melrose, Bowers and her husband brought the idea to their home-buying consultant, who was surprised himself when he looked into it. “He was pretty stunned,” says Bowers. “Every house we looked at, he was like, ÔThis house is great. . . .'” They settled on a three-bedroom Queen Anne with a fireplace, gumwood trim, beechwood floors upstairs, and front and back yards for $415,000. And at seven miles from Boston, the couple can be downtown in 15 minutes without traffic.
For other young professionals looking to stretch their dollars, it's not so much about finding a home close to the cosmopolitan trappings of the city as it is about finding the cosmopolitan trappings of a city close to home.
In the heady days of the late 1990s, Internet startups filled the central mill buildings of Maynard, where Digital Equipment Corporation hung its shingle in the 1970s and '80s. A population of hipsters equally charmed by the town's urban infrastructure and rock-bottom prices
created a new and ready market for local businesses.
“A friend of mine calls Maynard the Harvard Square of MetroWest,” says Christa Collins, 34, who, with her husband, Jeff, recently bought a four-bedroom Colonial fixer-upper there for $260,000. While that may be a stretch, the five-square-mile town boasts several thrift stores, a record shop, and no fewer than two Thai restaurants; the pad thai in the surrounding towns is harder to find. “Maynard has been looked at as the poorer sister of Sudbury and Acton,” says Michael Sanders, who with his wife, Barbara Blankenship, bought a four-bedroom in the same neighborhood for $307,000. “But there's more to this tiny town than you get in a lot of other towns.” Nor is Maynard all just brick and storefront: A quarter of the town is a national wildlife refuge that plans to open walking trails to the public soon.
Where Maynard does pale in comparison to Acton is in education. In fact, both Melrose and Maynard have school scores in the dispiriting middle of the pack. Melrose's Kate Bowers has taken a wait-and-see attitude to see if the schools improve during the next five years. Sanders and Collins, on the other hand, hope that Maynard's new population of young professionals creates a more activist constituency. “We're hoping that will make a difference on the spending on schools,” says Collins. “Hopefully, in the next decade or so you'll see more emphasis on building quality schools here.”
So what about Framingham, a town that a local comedian once derided as “the gateway to Worcester”? He might be surprised to learn that Framingham scored just outside the top 10 in our rankings, but real estate agent Bruce Klemer isn't. “I'm not shocked at all,” he says. “People don't get it. We're such a big town and have such a range of populations. As far as shopping and convenience, it's probably one of the best in the state, and we have a lot of very nice starter homes that are absolutely a first step for a homeowner.”
All snickering aside, Framingham compares more than favorably to other cities in its population range, with far better scores in education, crime, and the environment than Lynn, Lawrence, or even Cambridge. And despite the appearance of Route 9, the town is nearly one-third open space. “My office is right next to the malls,” says Klemer, “and in two minutes, I show people cow country.” As prices have increased, he says, many homebuyers have made a killing buying starter homes in Framingham and then trading up to bigger houses.
Which goes to show you: When it comes to value, looks and reputation can be deceiving. As Babson's Allen puts it, the numbers don't lie. “People don't just buy a home based on price. They make comparisons,” says Klemer. “And I think that's why we do well. Because we're one of the best deals around.” B
The rankings in this story were calculated by I. Elaine Allen, Christopher Sveen, Helene Hansteen, and Antonia Komitova at Babson College (www.babson.edu), based on data collected by Boston magazine. Variables were divided into six categories: costs, education, public safety, health, environment, and lifestyle. Costs include property taxes, water and sewer rates, and car insurance. Education includes per-pupil spending, average teacher salary, student/teacher ratio, MCAS scores, SAT scores, percentage of classrooms hooked up to the Internet, percentage of students who are college bound, dropout rate, percentage of high school students who graduate, and percentage of residents with a bachelor’s degree or higher. Public safety includes per-capita fire and police spending, violent crimes, property crimes, structure fires, motor vehicle deaths, and number of police officers. Health includes health and welfare spending per capita, age-adjusted death rates, incidence of HIV, heart disease deaths per capita, the percentage of residents with adequate prenatal care, and the incidence of leukemia and breast, colon/rectal, prostate, and lung cancer. Environment includes population density, percentage of open space, number of sources of air pollution per square mile, number of contaminated sites per square mile, and presence of radon. Lifestyle includes per-capita cultural and recreational spending, library holdings, daycare providers, health clubs, and houses of worship, as well as voter participation, racial diversity, percentage of housing defined as affordable, percentage of families living below the poverty line, and percentage of residents who are unemployed.
These data were used to predict the median housing price for 147 towns. Then the towns were ranked based on the difference between the model’s predicted housing price and the actual median housing price. The overall rank of towns was derived by combining the individual factor ranks in a weighted average to give higher ranks to the variables (such as education) that were more significantly related to housing prices, and then by an independent weight derived through a survey of real estate agents who prioritized the factors most important to homebuyers.
To see how your town — or the one where you’re hoping to settle — fares in close to 80 different categories, go to www.bostonmagazine.com.