ANN TRUDEAU
Lincoln ‘tightly regulated’

Move over, Weston.

It looks like there are at least three other sought-after Boston-area suburbs where the median selling price for a single-family home is more than $1 million.

Brookline, Dover and Lincoln had median selling prices that exceeded $1 million in 2005, according to statistics compiled by The Warren Group, parent company of Banker & Tradesman.

Those three towns hit the $1 million mark for the first time last year, joining Weston and such exclusive locales as Nantucket and Boston’s Back Bay and Beacon Hill neighborhoods, which already reached that high point years ago.

“They are very high-end communities. They are very desirable communities and there is a constrained supply [of homes] compared to the demand, and that by itself keeps prices high,” said David Wluka, president of the Massachusetts Association of Realtors.

The news comes even as many industry watchers indicated a slowdown in the residential real estate market late last year, with the number of unsold homes climbing and price adjustments abounding.

Many experts are expecting price appreciation to ease in 2006, with the market favoring buyers more than it has in the past three to four years. But whether selling prices will actually drop in Massachusetts, including those in some of the higher-priced communities, is up for debate.

Wluka said median selling prices aren’t likely to decline in Brookline, Lincoln and Dover because those towns aren’t doing anything to significantly increase their supply of housing.

“[These towns] have all the attributes that make them desirable and make people who can afford to live there want to live there,” he said.

“We don’t see a substantial retreat in prices in 2006,” said Christopher Bernier, executive vice president of Coldwell Banker Residential Brokerage, who oversees 20 sales offices west of Boston, including locations in Lincoln, Winchester and Lexington.

Bernier pointed out that the fundamentals are good, with interest rates expected to increase only slightly, employment at a good level and no indications of any economic problem that would spur a major downturn in the housing market.

“Obviously, what we don’t know is what sort of demand curve we’ll be looking at in 2006,” he said.

The current absorption rate, 5.7 months, indicates more of a buyer’s market, according to Bernier. Bernier, citing information from the MLS Property Information Network, said the stock of unsold homes listed in MLS PIN’s datebase has fallen from roughly 26,000 in October to about 20,000. Some of the properties may have been sold, or temporarily pulled from the market because of the holidays, he said, while others could have been permanently removed from the inventory by sellers.

‘A Slight Dip’
Real estate brokers in Greater Boston said they aren’t surprised that median prices in towns like Dover, Lincoln and Brookline – communities where it’s tough to find single-family homes priced under $500,000 – reached $1 million.

Buyer demand in communities within close proximity to Boston that feature acclaimed public schools usually outstrips the supply of available homes, they noted.

Large-lot zoning has restricting the housing supply in towns like Lincoln, Weston and Dover and has helped push up land prices and make new-home construction more expensive.

“Lincoln has a very, very small supply of homes. [The town] is tightly regulated, so there is not a lot of new product coming on,” said Ann Trudeau, who manages J.M. Barrett & Co., which has offices in Lincoln, Concord and Carlisle.

New-home construction in Lincoln is rare, according to Trudeau, although there have been cases where older homes have been torn down and replaced with new larger residences.

But Trudeau said the tear-down phenomenon that has been popular in towns where there is more demand than supply has not been a “prevailing theme in Lincoln.”

In Lincoln, where 56 single-family homes were sold last year, the median selling price for a single-family home reached $1.14 million in 2005. That represents a 23.4 percent jump from 2004, when the median selling price for a single-family home in Lincoln was $924,750.

A home in the $700,000 range is considered inexpensive in Lincoln, Trudeau noted.

“I can’t imagine anything in the town of Lincoln [being priced] under $400,000,” she said.

In fact, the median selling price for a home in Lincoln has exceeded half a million dollars every year since 1998, according to statistics from The Warren Group.

As of last week, 18 of the 26 single-family homes listed for sale were priced $1 million or higher, according to Bernier. That’s a drop from the 29 single-family homes priced over $1 million that were available for sale a year ago.

“The inventory is down relative to last year,” said Bernier.

In Dover, land values have contributed to the run-up in home prices, according to Jay Hughes, a broker who has been in the real estate business for more than three decades.

The median price for the 90 single-family homes sold in Dover last year surged above $1 million – almost 20 percent higher than the $884,000 median price recorded in 2004.

“To me, this is a milestone,” said Hughes, who owns Dover Country Properties and is a member of The Realty Guild, which represents independent real estate firms. “We could see it coming, but in a market where the fourth quarter [in 2005] was slowing it’s interesting that we did get over the $1 million level.”

Some of the higher-end sales in town last year included an 8,250-square-foot, five-bedroom home which was still under construction that went for $4.4 million in September, and a 13-room Colonial sited on five acres on Snow’s Hill that sold for $3.5 million in late November.

Dover’s open space, good schools, proximity to Boston, and low taxes make it very desirable, said Hughes.

Homebuilders have apparently noticed.

In Dover, where the predominant zoning calls for one- to two-acre lots, many smaller homes sitting on large parcels have been demolished by builders and replaced with mansions that feature price tags of at least $1.6 million, according to Hughes. That has put upward pressure on home prices, he says.

Of the 40 single-family homes that were available for sale last week, more than half, or 25, were priced $1 million or higher. At least six of them are newly built homes, said Hughes.

With the real estate market softening, Hughes said prices in Dover may slip a bit. “We may see a slight dip below $1 million,” he said.

But Hughes said the newly constructed homes, as well as the abundance of unsold $1 million-plus homes in the town, likely means that the median selling price will stay close to $1 million.

“Pricing is going to be the key to motivating sellers and buyers to come together this year, and it is up to the Realtor to merge those two parties effectively,” he said.

Another community in Norfolk County that saw its single-family home median price surpass the $1 million mark in 2005 is Brookline. Last year’s median price is nearly 12 percent higher than 2004 when the median in Brookline was $975,000.

Some 258 single-family homes were sold in Brookline last year. Among the notable sales was a stucco-and-shingle country estate house sited on over two acres on Clyde Street that fetched $5.8 million in late November and a Georgian antique on Sargent Road that sold for $4.6 million in September.

In Weston, where the median selling price for single-family homes has exceeded $1 million for the last three years, the median actually slipped from $1.205 million in 2004 to $1.2 million last year.

On the island of Nantucket, the vacation destination of choice for many wealthy families, the median selling price for a single-family home spiked to more than $1.4 million, a 27 percent increase from 2004 when the median was $1.11 million.