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Boston-area drivers spent, on average, 164 hours caught in traffic in 2018 according to traffic data firm INRIX, equivalent to a whole month of workdays.
Home prices in the towns along Interstate 495 have long been a bargain compared to Boston and the ring of ever-tonier suburbs that surround it, where teardowns to make way for McMansions and million-dollar fixer-uppers are a fact of life.
Not surprisingly, the 495/MetroWest Partnership has put a positive spin on this fact, with the business– and municipal-backed booster group touting 495’s relatively lower home prices and office rents – which are a third less expensive than Boston’s core – as great draws for both homebuyers and companies.
In and of itself, that price difference is not necessarily all that unusual, with outer suburbs and exurbs historically offering lower home prices for buyers ready to put up with a long commute.
The idea that 495 has become a low-cost alternative for homebuyers and businesses is great spin.
But the gulf in prices points a grittier reason for the shift: Discouraged by increasingly grueling commutes, buyers are simply bypassing the outer suburbs in favor of communities closer to Cambridge and Boston.
A Great Disparity
It’s normal that some parts of Eastern Massachusetts would come a bit back faster than others after the Great Recession; however, few would have predicted the massive disparity that emerged over the past decade. Home prices in Boston and Cambridge rose 92 percent over that period compared to 23 percent in MetroWest, according to the 495/MetroWest Partnership’s recent Economic and Commercial Real Estate Report.
But even that underplays the trend. The survey included towns like Natick, Sherborn, Wayland and Sudbury that are arguably closer – both geographically and otherwise – to upscale suburbs along Route 128 than their more middling counterparts along 495.
Take out those communities, and the price gains along 495 are likely to fall well below 20 percent, and possibly even lower than 10 percent, according to data from The Warren Group, publisher of Banker & Tradesman.
Median prices in many towns along 495 have just recently moved past their previous high-water marks set more than a decade ago at the end of the early 2000s housing boom.
Ashland’s high–water mark came in the spring of 2008, when the median price of a home in town hit $395,000.
Home prices in MetroWest have risen much more slowly since the recession compared to the Boston area’s inner core, showing commute times still dominate homebuyers’ decisions.
Nearly 10 years later, in the spring of 2017, it still hadn’t climbed back and, at $359,500, was still $35,000 short of where it was back in early 2008.
It was only last year that Ashland moved past its 2008 single-family median price high point, hitting $473,250 in a big breakout.
Franklin is the same story, though without the big breakout, finally surpassing its 2007 mark of $407,250 in 2018, when the median price reached $420,000.
Meanwhile, other communities have yet to make it back to the starting line.
At $352,000, Marlborough’s median price has yet to get back to its high of $361,000 in 2007, while Bellingham at $295,000 is still a step or two below its 2008 peak of over $319,000.
Demand Soars Close to Boston
By contrast, home prices have soared during the past decade in Boston’s urban core and its surrounding suburbs, according to The Warren Group.
Cambridge’s median home price has doubled to nearly $1.5 million, Concord’s has nearly doubled to more than $1.3 million, while Lexington’s hit $885,000, up from $673,000 a decade ago.
And it’s not just the toniest ’burbs that have seen big jumps, with more middling communities seeing big increases thanks to their proximity to the Boston area’s urban core.
Burlington’s median price at $580,000 during the first two months of 2019 represents a jump of well more than 50 percent from 2008, when it the median price in town was $360,000.
Or take Waltham, with a median price of more than $583,000, now well above its 2007 peak of $421,000.
A shift in population growth is behind this growing gap in home price growth between the outer suburbs and inner suburbs and Greater Boston’s urban core. The Boston area’s urban core saw its population surge by 9 percent between 2010 and 2016, compared to a 4.5 percent increase in the exurbs, according to Forbes.
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Buyers Pay to Avoid Long Commutes
For real estate agents I have interviewed over the past few years, there is no great mystery what’s driving this trend.
Much has been made of Millennials’ supposed affinity for city living. But many buyers are looking to get as close into the urban core – and the jobs there – as they can to reduce the amount of time spent in commuter hell.
Despite years of attempted reforms by the Baker administration, the MBTA’s unshakeable unreliability is well documented.
But our major highways and byways are also over capacity, especially Route 128, which crossed that threshold years ago.
Transportation data company Inrix named Boston the worst metro in the country for traffic gridlock in 2018. We even beat out Los Angeles in this dubious category, with Boston–area drivers spending, on average, 164 hours caught in traffic last year. That’s equivalent to a whole month of workdays, with drivers forced to spend $2,291 each year.
Business boosters and politicians can spin all they want about the lower home prices out on 495.
Scott Van Voorhis
But the price gap is really a reflection of a major structural problem, with Greater Boston’s traffic woes driving up prices of homes closer to the urban core while artificially suppressing values out on 495.
A modernized highway and public transit system would go a long way towards evening out those price differences.
But as long as living out on 495 dooms you to hours of commuting hell each week, buyers will continue to pay whatever it takes to get as close in as possible.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
