Home Buying

Prices for newly constructed homes are through the roof

Prices for new constructions are growing much faster than homes overall, largely because of high land and labor costs.

A new home goes up in Wayland, which is near the Route 128 corridor where prices are highest. Wendy Maeda/Boston Globe

By Scott Van Voorhis

January 25, 2016

3 minutes to read

House hunters seeking brand new construction in the Boston area better prepare to ante up.

Buyers can expect to pay anywhere from $700,000 to well over $1 million for a new house inside the Route 128 beltway.

New home prices in the Boston area are rising by a percent a month, or 12 percent a year, notes Jeff Rhuda, business development officer at Beverly-based home builder Symes Associates.

By contrast, the median home price in Massachusetts – which includes all homes – rose just 2.3 percent in 2015 through the end of November, to $340,000, according to The Warren Group, the Boston-based real estate publisher and data firm.

Closer into Boston, restrictive zoning and a scarcity of building lots has combined to drive new home prices through the roof.

There are still new homes for sale for a half million or below, but you’ll have to go west to I-495 and beyond, where land is cheaper and building lots are more plentiful.

“If you are talking about detached single-family homes, I haven’t seen any sub-$500,000 construction anywhere and our company focuses primarily within I-495,’’ Rhuda said.

The western suburbs are the most expensive place to buy a new home, with prices often starting at well over $1 million and going up.

In Wellesley, you’ll have to fork over at least $1.6 million to get anything new. That small fortune will get you a 4,500-square-foot house on a quarter-acre lot, noted Elaine Bannigan, broker owner of Pinnacle Residential Properties in Wellesley.

“Luxury’’ construction starts at $2.8 million, which will get you a 5,500- to 5,900-square-foot house on a half-acre lot. In addition, the extra money will buy you nice touches such as molding, fireplaces, a paneled library, cabinetry and built-ins.

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In Weston, it’s hard to get anything new under $3.7 million. For that price, you’ll get an 8,000-square-foot home, Bannigan said.

A new home in Needham is also likely to cost you well over a million, with builders tearing down older homes to put up new ones as the town runs out of available housing lots.

“The cost is high because land is expensive, materials are expensive and labor is expensive,’’ Bannigan wrote. “In the pricier communities such as Wellesley and Weston, you’d be hard pressed to find a new home for less than $1.5M.’’

Concord in the western suburbs and Lynnfield and Reading to the north of Boston are three more towns where you have to spend nearly a million or more if you want something brand spanking new.

Symes Associates is building 22 new homes in Concord at an average asking price of $975,000 and eight in Lynnfield at roughly $1 million apiece, Rhuda said.

Even so, there are a few suburbs within a half hour of Boston where you can still buy something new for under a million.

In Burlington, Symes just finished selling 32 new homes at an average price of $741,000. The developer is also now building five new homes in Wakefield, which are expected to sell in the $700,000 range.

However, if you are determined to stay below $500,000, then the I-495 corridor and beyond may be a better fit.

Northbridge’s Hemlock Estates has homes under $400,000, while the price range at Wildflower Meadows in Littleton is $400,000 to $500,000, said Tom Skahen, founder and chief executive of StreamLine Communities.

Homes at Groton’s Academy Hill are priced between $500,000 and $600,000.

David Crowley, head of marketing at One Boston Real Estate, said when he talks to buyers, he explains how pricing of new homes can be dramatically different depending on whether you are looking at homes in the Route 128 beltway or out on the I-495 corridor.

“What I tell buyers is that it’s the ‘Tale of the Two Rings,’’’ Crowley said, adding the “pricing in terms of larger, new construction homes depends on which ‘Ring Road’ you’re on.’’