Income by Percentile in Massachusetts

by Michelle J. Lane, Realtor

For those of you who received my recent newsletter you know that the real estate market in showing signs of slowing growth.  There are serveral reasons for this.  I mentioned that a major reason is simply that buyers have hit the wall on how much house they can afford.   This post provides some background on what that means.   

Looking at the country as a whole, the income required to be a top earner is as follows.  

  • $480,930 – to be considered in the top 1% 
  • $214,462 – to be considered in the top 5%
  • $138,031 – to be considered in the top 10% 
  • $122,744 – to be considered upper class (earning twice the median of $61,372)

Contrast that with what it takes to be in those same percentiles in Massachusetts:

  • $582,774 – to be considered in the top 1% 
  • $260,286 – to be considered in the top 5%
  • $192,612 – to be considered in the top 10% 
  • $164,760 – to be considered upper class (earning twice the median)

The good news is that more people in the Boston metro area earn an income in the Upper Class bracket than in the rest of the country.

The bad news is that the median price of a single-family house in the Boston area is $615,000 vs $200,000 in the US as a whole.   Other surrounds towns median prices are as follows:

  • Brookline – $1,760,000
  • Newton – $1,202,500
  • Wellesley – $1,433,250
  • Milton – $688,000
  • Cambridge – $1,442,500
  • Somerville – $752,500
  • Medford – $611,000

If you want the numbers for your town, just ask and I will look that up for you.

SO, the median home price in the US is 3.26 times the median income of $61,372. The median home price in Massachusetts is 7.45 times the median salary of $82,380.  

In Newton, where I live, the median income is $147,854. The median home price is $1,202,500.  That is a ratio of home prices that are 8.13 times the median income. This is untenable. Granted, the Boston area has more high income earners than other parts of the state and certainly, other parts of the country.  See the chart below.  But there are only so many high earners to buy in the area and those earners want the best houses – those that are new or in like-new condition and in desirable locations.  That leaves sellers who do not have new or near-perfect homes with a smaller pool of buyers which is why we are seeing a softening of the market on the lower end.  Higher interest rates are bound to compound the problem.

The good news is two-fold 

  1. every house can sell.  It just has to be priced right for the amount of money and effort you are willing to invest to prepare it for the market.
  2. because of low inventory, the market is not going to slump. It appears, for now, simply that price growth is slowing.


Michelle J. Lane
Century 21 Commonwealth
CELL: 617 584-3904



The Housing Shortage by the Numbers

If you are feeling like there are just not enough houses on the market this spring, you are not imagining things.  A recent article on outlined the problem.  In short:

From 2009 (the slump) to today new construction of single-family homes, condos, and apartment units totaled 5.6 million.  Over the same period, roughly 1.7 million housing units were deemed uninhabitable or obsolete and were demolished.  That is a net of 3.9 million houses.

In that same time period, the population grew by 17.3 million.  Given the average household size is 2.5 persons, a total of 6.9 million new housing units would be needed – a shortage of 3 million homes.  So no surprise that home ownership is down 3.7% since 2009.

Add to that the fact that incomes have grown at slow pace – 2% over the past year.  While home prices have risen by 6% in the same time period.

To give a more local perspective, below are some local comparisons from 2009 to today:

  • The median price of a single-family home in Newton grew from $939,000 to $2,124,999.
  • The median price of a condo in Boston grew from $419,900 to $829,000.
  • The median price of a condo in Cambridge grew from $489,500 to $668,000
  • The median price of a condo in Somerville grew from $364,450 to $709,950

The problem has been exacerbated by the fact that retired adults are moving back into the city.  Everyone want to live in walkable neighborhoods.  Typically, these retired baby boomers have the money (in cash) to buy up properties that would normally be bought by young families working in the city making the battle for these limited properties more frenzied.

That is not to say that prices are up everywhere.  Home values follow the jobs.  The farther you are from the Boston/Cambridge mecca of job opportunities, the less likely it is that prices have risen.  For example:

  • The median price of a single-family home in Worcester is exactly the same at $214,900, while condo prices are down.
  • The median price of a single family in a majority of towns outside the Greater Boston area are up about 5% in that same time period from 2009 to today. – from cities such as Lowell to suburban towns like Boxboro, Georgetown, Foxboro, etc.  While that is great for people looking to buy in these towns, it means the possibility of selling in one of these towns and moving closer to the city is drifting off farther into the distance.
If you want to know what has happened to home values in your town, just ask.
All this means that we need more new construction.  A problem that is not easy to solve.  Debates on this topic can be followed in the editorial section of most local papers and no one seems to have the answers.  The cost of land in these towns make it impossible for builders to create affordable houses. 40B is flawed in that a builder must just put aside 20-25% percentage of units as affordable, while the units overall could still be super expensive.
Hopefully, the state, cities and developers will come up with creative solutions – perhaps more development of micro apartments for single adults and clusters of small houses on small plots for seniors or couples starting out.
If the state is smart, they will build more and better commuter transportation so people can live in suburban towns and not feel like they are so far from the action.  These suburban towns may even need to up their game on building centers with more to do and better transportation within the town so seniors don’t need to own a car or have a driver’s license. We shall see what the next few years bring.
In the meantime, it does mean though that home buyers will have to move farther away from the city to get a property they can afford.  Or be willing to buy a home that needs a lot of updating – or both.
If you need help finding a home, just ask.  You can complete this survey to let us know what you are looking for and we will contact you to start your path to home ownership – Home Buying Survey

Michelle J. Lane

Century 21 Commonwealth
CELL: 617 584-3904




MA Small City Rankings on WalletHub

WalletHub has ranked the best and worst small cities in the U.S.  Lots of positive news for Massachusetts.

Northampton ranked the highest MA town on the overall list at #8.   The rest of the Top 10 are:

  • 14 – Milton
  • 26 – Lexington
  • 105 – Wellesley
  • 120 – Danvers
  • 138 – Saugus
  • 143 – Somerville
  • 150 – Melrose
  • 165 – Newton
  • 171 – Needham


To find the best small cities in America, WalletHub’s analysts compared 1,268 cities across four key dimensions: 1) Affordability, 2) Economic Health, 3) Education & Health and 4) Quality of Life. For our sample, we chose cities with a population size between 25,000 and 100,000 residents. Please note that “city” refers to city proper and excludes surrounding metro areas.

Lists on which MA ranked highest.

WalletHub - Most EducatedWalletHub - MIllenials

WalletHub - Highest Percentage with Health Insurance

 Click Here For the Full Breakdown

Other key findings for Massachusetts home buyers –

MA ranked #1 as the best state for education.

  • 9th Happiest State
  • 13th Best State to Have a Baby
  • 5th Best State for Working Moms
  • 21st for Women’s Equality
  • 11th for Nurses
  • 28th for for Doctors

So Massachusetts has a lot going for it. Not the best state for retirement – will cover that in a future blog post.  So that tells me this is a great state for everything from going to college up to retirement, then it might be time to move someplace warmer, less expensive and slow paced (could we actually slow down?).  Whatever phase you are at, if you need help Contact Me.

Michelle J. Lane

Century 21 Commonwealth
CELL: 617 584-3904


Seller Testimonial – Hyde Park


Michelle helped sell me my first home. That was a wonderful experience from beginning to end. I felt like her most important client, so I was eager to work with her again when it was time to sell that home.

Michelle impressed me at every stage of the sale. Her expertise was a given, based on my previous experience, but her extra effort, attention to detail, and availability to answer my questions were excellent.

Michelle makes what could be an intimidating process straightforward and successful. Plus, you know that you are never alone, when you work with Michelle. She will be there for you every step of the way.”

Ben Irwin, formerly of Hyde Park, MA 

New Listing – 2-bedroom condo in West Roxbury $219,000

36 Westgate - Kitchen (3)

Spacious 775sf 2-bedroom,1-bath Chestnut Village Condo. This is a two-bedroom garden level unit featuring an eat-in kitchen and SS appliances. Newer windows.New range and dishwasher. Wood floors in kitchen and living room, tiled bathroom floor. Freshly painted with new bedroom carpeting. Unit comes with 2 assigned parking spots. Complex is professionally managed onsite with live-in superintendent. Complex includes pool, tennis courts, playground and on-site laundry. Close to shopping, restaurants, Route 9, Putterham golf course, Chestnut Hill “T” stop and commuter rail. MBTA BUS #37 is close by. Taxes do not reflect residential exemption.

More Details Here

CONTACT ME for a showing.

Michelle J. Lane
Century 21 Commonwealth
CELL: 617 584-3904

Buyer Testimonial – South End


I successfully found my dream condo in 2013.   Michelle was fantastic! She really knew her stuff and kept my spirits up during the whole process.

Hilary Hayes, Boston, MA 

Home sales and prices jump again in Massachusetts – October 2013

From Erin of the Boston Globe
By: Michelle J.Lane Realtor

This article is written for the entire Massachusetts market. My take on the greater Boston area specifically is that we saw the biggest boom in the spring and summer. It does appear to be leveling off now as the median price of condos on the market in Boston is actually down from $524,000 last year to $499,000 this year. Inventory is UP by 10%.

In Newton, where I live, inventory is down 10% from same time last year. Median price of homes on the market is up considerably. But that is more because there are more higher end homes on the market and none at the entry level price range. It is always important to look at what the market is doing in your part of Massachusetts so that you know how best to plan your purchase or sale. If you want to know what the market is doing in your town, contact me and I will fill you in.

The Article
The Massachusetts housing market continued to boom in October, as home sales and median prices jumped by double-digit rates from the same period last year, according to a report Tuesday by a Boston real estate tracking firm.

October Home Sales

Single-family home sales rose 18.5 percent last month, while the median price increased nearly 10 percent, to $313,050 — the highest price for October since 2007, according to Warren Group. It was the fourth consecutive month that sales increased by 10 percent or more from the previous year.

“The pace of the housing market has surpassed expectations this year,” said Warren Group CEO Timothy M. Warren Jr. “The past four months have really been booming.”

If the trend continues, Warren said, home prices by next year could return to their pre-recession peak of $355,000, reached in 2005. The median price for homes sold for the first 10 months of this year was $324,900.

A widely followed survey of metropolitan real estate markets, the S&P/Case-Shiller Home Price Indices, also found Boston area values on the rise. The index, which tracks repeat sales, showed that Boston area prices rose for the third consecutive month in September, gaining 7.5 percent from a year earlier.

Warren said the surging housing market is driven in large part by pent-up demand from Massachusetts residents who put off buying homes in the years following the housing bust and economic downturn. With the economy recovering and consumer confidence improving, buyers are now making their move.

That strong demand coincides with a tight supply of homes on the market. The result: rapidly rising prices. The inventory of single-family homes for sale this October decreased by nearly 20 percent from the same period last year, according the Massachusetts Association of Realtors.

The realtors group, which tracks a slightly smaller universe of sales than Warren Group, reported similar statistics Tuesday. Home sales rose 12.2 percent from a year earlier, and prices jumped 12.3 percent year-over-year to $320,000.

“If sellers continue to sit this market out and inventory continues to shrink, we’re going to see fewer qualified buyers able to keep up with increasing prices,” Kimberly Allard-Mocia, president of the realtors association, said in a statement. “Full recovery is close, but now it is up to the sellers to make it happen.”

Warren and Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University, said they expect housing inventory to increase this spring, as buyers continue to bid above asking prices for months and potential sellers realize they can recoup their investments — and more.

“We’re going to see a significant amount of single-family homes for sale, which will tend to moderate price increases,” Bluestone said. But for now, he added, “This is becoming a very good time to sell.”

Search Homes for Sale in MA

Want to talk about selling your home? Feel free to contact me.

Michelle J. Lane

Michelle J. Lane
Century 21 Commonwealth
CELL: 617 584-3904

Case-Shiller Home Price Index for Boston

I am publishing this for those of you who wonder when the height of the market in the Boston area was and where home prices are in relation to the height.  The height was in 2005.  The bottom was in April of 2009.  We’ve been bouncing along that bottom since then, hitting it again in Dec 2011/Jan 2012.  But, as you can see, home prices are starting to do a steady creep upward.

I believe this is in large part due to the fact that there is very little inventory on the market in the past 6 months.  This time last year, there were roughly 26,000 single-family houses on the market.  Today there are about 21,000, roughly a 20% drop.  Low inventory is bound to push prices up. 


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Lovely 2-level condo in JP - with 2-car garage!

Coming up in early March. Spacious two-level condo offers all the charm of a period home, yet is beautifully updated and maintained for modern living. This 1536sf 2-bed, 1.5 bath home offers a walk-in master closet, a formal dining room, eat-in kitchen with tile floor and radiant heat, living room with beautiful fireplace, sun-filled den/office, and laundry room. Hardwood floors throughout, 2-car garage and a gorgeous private patio! Fantastic location – beautiful dead-end street, right up the street from the T.

Century 21 Commonwealth
CELL: 617 584-3904