February 2, 2012
254 Second Ave
Needham, MA 02494
February 2, 2012
My name is Ryan McDonnell, and I am a Needham resident and co-owner, with fellow Needhamite Mathew Roth, of Hawthorn Real Estate. We are residential builders and real estate brokers, and the article published in the Needham Times on February 2, 2012 on teardowns is very relevant to our business as well as to our community.
In reading the article, there are a few points where clarification or further discussion is warranted. In this letter, we hope to provide some additional perspective on the issues raised.
Demo permits are on the rise, and schools are being strained. While it is notable that demo permit applications have increased, there is nothing in those statistics that highlights who is applying for them. Rather, the implication is that builders are demolishing perfectly good homes to replace them with ostentatious homes to be sold to non-Needham residents. However, on multiple occasions during each of the years referenced, our company has been contracted to demolish and build new homes for current Needham residents. These are residents who, in many cases, either already have children in the Needham schools or have pre-school age children, so there is only upside to the town in terms of the incremental tax revenue earned from the higher assessment of the new home. In these cases, residents are designing and building custom homes that are tailored to their individual tastes and budgets rather than the construction of everyone’s favorite new construction generalization, a McMansion. In principle, it is no different than a large scale renovation of an existing home, but is often easier and more cost-effective to tear down a home than it is to retrofit by way of an addition.
There should be additional restrictions on new construction. When we are approached by a homeowner looking into the possibility of selling their home for redevelopment, the first question we ask ourselves is whether the home has value to another homeowner in its current condition. On more than one occasion, we have encouraged the owner to focus on selling either through the traditional real estate sales channel or we have introduced them to a buyer we know is in the market. The homes that are being torn down are the ones that are not necessarily attractive to buyers in their current condition. They are frequently in disrepair and often require significant costs to bring them to the standards of today’s Needham buyer. As such, placing restrictions on new construction will have an adverse effect on the salability of many of these homes and thus prevent some residents from being able to sell their homes at all. In some cases, we are buying homes from long time homeowners who are eager to downsize and/or move into a more comfortable living situation. These residents, in many cases, need the equity in their current homes to do so. If the market for new construction (ie redevelopment of these homes) is not there on the back end, then the value of and the demand for these homes will decrease significantly.
Needhamites are being priced out of the market. Speaking of those property values, according to MLS, Needham’s median sale price for a single family home in 2011 was $690,000 (as opposed to the $1.273m cited in the February 2nd article) with an average sale price of $818,141. It is possible the number being referenced is the current average list price, which is as of this week is $1.288m. Also, while prices have risen since 2000, to make the inference that the increase is attributable to teardowns and new construction ignores the impact of the rapid price appreciation and mismanagement of the lending industry in the early 2000’s that contributed to the housing market collapse towards the end of the decade.
We sympathize with residents and prospective buyers who are frustrated that they are unable to find a home in Needham. But, this is not a problem that is unique to Needham. As a real estate broker, I have worked with buyers looking in towns all over greater Boston who express frustration at the gap between their budget and their ideal home. The fact that Needham is experiencing a period of real estate growth with respect to neighboring communities should be viewed as a positive and a sign that we have a community that is attractive to both current residents as well as those relocating from other areas.
The real estate market is predicated on the basis of supply and demand. The current environment allows for residents and builders to choose new construction as an option as long as the zoning bylaws and building codes are adhered to. Imposing further restrictions simply because new construction does not benefit and/or please everyone is a knee jerk reaction and could have town-wide economic and social consequences.
Hawthorn Real Estate