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Local view on Globe article: Exurbs vs Suburbs

April 7, 2012

Exurbs as percentage of Suburbs

 

 

 

 

 

 

 

 

 

 

 

In Friday’s Boston Globe, there was an AP article titled “High gas prices put brake on expansion of US exurbs.”  The article was not focusing on Massachusetts but it was making the case that, partially due to the cost of gas, the outer suburbs of US cities are struggling while the towns closer to the cities thrive.   I figured I would test that theory for our area.  In this case, the “exurbs” would be the towns out on 495 that did so well during the boom times – Medway, Hopkinton, Millis, and Southborough are the examples I chose.  For closer in towns, “Suburbs”, I’ll use Newton, Needham, and Wellesley.  First of all, it is worth saying that Newton, Needham, and Wellesley have always been strong towns and will always be strong towns because of their proximity to Boston, their schools, and their public transportation options.  But, to test the theory, I decided to compare the exurbs to the suburbs, as the article did, looking at 2006, 2010, and 2011.

What I found is a mixed bag of results for the Exurbs.  I found that the number of homes sold in the Exurbs as compared to the Suburbs was flat from 2006 to 2010 and actually went up a little in 2011.  Meanwhile though, the median price of a home sold in the Exurbs as a percentage of the Suburbs went from 63% in 2006 to 56% in 2010 to 53% in 2011.  From a new construction perspective, none of the towns were able to match their 2006 numbers but as a percentage, the Exurbs inched up in 2011 from 15% to 16% of the suburbs.

The numbers above should be looked at on a relative basis only, watching the change in percentages rather than paying too much attention to the actual percentage itself.

My conclusion from this analysis is that the same formula is in place that has always been there.  The Exurbs offer much more home for your dollar so people are willing to buy there, pay the gas prices, and deal with the longer commute.  As the Exurbs have gotten even more affordable as compared to the Suburbs, more people are buying there and building homes there.  The big question in my view is when will the median home price difference level out or come back the other way?  When it does, I expect the relative numbers of homes sold and new constructions to change to be in favor of the Suburbs.

Bill Paulson
Prudential Advantage Real Estate
781-929-2453
bill@billpaulson.com
www.facebook.com/conciergerealtor

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