Sales of single-family homes sales may be dropping in pace, but that doesn't mean it's any easier or cheaper for buyers to purchase their first home.

NewsCenter 5's Liz Brunner reported that new construction costs have soared. Modest existing homes, though less expensive, are not modest in price.

So what does the starter home of 2004 bargain look like and what does it cost?


Young families flocked to Oak Hill Park in Newton after World War II to follow the American dream to suburbia. At the time, the small starter homes were reasonably priced. But today, those homes are selling for $400,000 and higher. More often than not, developers buy them, raze them and build bigger homes that cost $1 million. It's a phenomenon throughout MetroWest.

"It's unfair to the first time home buyer to some degree because they don't have a chance. They're not even able to compete against the builders," said Waltham realtor Dee LeBlanc.

LeBlanc said there are alternatives for homebuyers.

Across the state contractors are completely rehabbing multi-family homes and turning them into condominiums.

"Affordable housing is really what it is. The young professional couples cannot afford a single family home in the condition they want," said LeBlanc.

If you want to stay close to Boston, nix the yard and the picket fence, and go condo. The price?

"Those are in the mid- to high ($300,000s), whereas the rehabs you will get in the low ($300,000s)," said LeBlanc.

Bob and Heather Elliot were hoping to buy a single-family home for about $250,000, but ended up buying a rehab condo for $300,000.

"We were looking in Watertown and Waltham for a single house with a yard. Prices were beyond our reach," said Heather Elliot.

And the hunt for houses farther away from Boston isn't much of a bargain hunt. In fact, communities where prices had the steepest climbs over the past five years were the farthest from Boston.

The median home price in Bellingham jumped 111 percent to $334,000. Next door in Medway, a starter home is on the market for $327,000.

"I think still the first-time buyers are thinking they can buy something under $300,000 that is in a quiet spot with a nice yard. Sometimes we show them condos that are in the price range," said Medway realtor Ellen Rao.

But condo prices are climbing too with almost a 13 percent increase from just a year ago. Older capes and ranches are still out there in the outlying suburbs, but prices keep rising. And realtors say it's just a matter of time before developers scoop those up, too.

"It's more affordable for them to find a dilapidated ranch house, purchase that at a reasonable price and put something for $800,000 to a million. So, that is happening a lot right now," said Rao.

Condos may be the least expensive way to go for a first home, but they are selling fast and appreciating quickly. Condo sales increased 22 percent from a year ago.

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