The TAB’s Jonathan Dame has the discouraging figures and a graphic to illustrate it..
In 2015, for the first time ever, more homes sold for over $2 million than for under $600,000.
Just 9 percent of homes sold for less than $600,000 – down from more than 32 percent in 2009. And only two homes out of 734 – 0.27 percent – sold for less than $400,000.
We have a very modest home, but I believe it would be knocked down if we ever sold it and a much larger house would be built. 🙁
400k, 600k, 2M all seem like arbitrary choices for an analysis, and give the impression that they were cherry-picked to arrive at an exciting result. Better to just say how much the median price has increased, or use some other broad measure that does not depend on a subjective choice.
The Newton Assessor has a wealth of information on median sales prices for each neighborhood assessing district: http://www.newtonma.gov/civicax/filebank/documents/78806
Over the last ten years, the median sales price in the city has risen from $763,000 to $1,100,000.
Actually, I think those are pretty good numbers to use.
The median house price is $1.1 million, which means half of the houses cost more and half cost less. But I think it is very helpful to know what is available at prices people who already live here can afford. The median household income in Newton (which includes both individuals and families) is $120,000, and a $400,000 home is about all that household can afford. The median family income (which only includes families) is $155,000 and a $600,000 home is all that family can afford.
We know that the median house price is almost double what a family earning the median income can afford and almost triple of what people earning the median household income can afford. Knowing that there are more houses selling for over $2 million–which is more than 3 times what a median income family in Newton can afford–than for under $600,000 tells us most of the people who already live here are pretty much priced out of the Newton housing market. By a lot.
These are accurate though unfortunate numbers indeed. Another number: a condo in the SHI, supposedly affordable housing, is priced over $300,000.
We are quickly losing the economic diversity that has always been a part of Newton. Those who wish to keep the status quo and dislike change should embrace accessory apartments and true affordable housing.
@Marti: I agree but please include doing something to preserve the small modestly sized homes where we can because those homes are being replaced by the $2 million McMansions that contribute to the divide. I am all for a multi-pronged approach to housing.
This is misleading. Let’s pretend that in 2006, Newton had 4 homes that sold for $400K, $600K, 1.5M, and $2M. Thus, in 2006 25% of the homes sold for $600K or less, and 25% of the homes sold for $2M or more. Assume all homes have the same price appreciation of 5% per year. In 2015, these homes sell for $621K, $931K, $2.3M, and $3.1. So, in 2015, 0% of homes sell for under $400K and 50% sell for over $2M. This does not imply that low-price housing buyers are adversely affected anymore than anyone else.
Ten years ago the housing market went absolutely bonkers. I’m not sure it’s proper to compare today to what is hopefully a once in a century kind of housing market event.
@Jeffrey Pontiff – I beleive it does suggest lowet income earners are arversely affected. In your example house price rose 5%/year but only the people at the top of the income scale had their income rise by 5% per year.
That in fact is the exact crux of the problem. When house prices rise for an extended period of time faster than the average person’s income, the result is a housing crisis.
The only incomes over the last 10-20 years that having been keeping pace with rising real estate prices are those,at the top of the income scale.
Jeffrey, you lost me at “let’s pretend.” I think it is pretty clear that the median priced single family home is getting farther and farther out of reach for the family earning the median income in Newton. The fact that there are more houses available for people who make three times the median family income or more, and nothing or next to nothing available for those who make the median income says a lot. And Jerry is right: median family income is not keeping pace with the increase in housing prices, it is losing ground.
Jerry and Ted. All that the article is saying is that housing prices have been going up in Newton. Is that news to anyone?
I agree that there is national evidence that over the past 10 years or so, non-high earnings have seen very little economic gain. This will change if the economy picks up. I don’t know about Newton-specific or MA-specific evidence. I would love to see it if it exists. I predict that our experience is not as bad as the rest of the country, but that is a guess.
The cost of buying a home is only one factor in determining affordability. Property taxes play a role too. When was the last time Newton lowered residential property taxes to make our city more affordable for families with moderate incomes? It’s time the freeloaders in our community were forced to pay their fair share. I’m referring to religious and private educational institutions that pay zero $ in property taxes. Wealthy institutions like BC are getting a free ride on the backs of homeowners, and this nonsense has got to stop. The Catholic Church just burned $850,000 trying to stop legalized marijuana in Massachusetts. So don’t tell me they can’t afford to pay their rightful share of property taxes. And I hope the next Mayor of Newton has the courage to take on this issue.