By Brian Denitzio
Reporter Staff

A higher than usual number of properties on the local housing market, mixed with related and outside economic forces, has slowed up the long-hot Dorchester real estate game. Observers say that the slowdown is likely not indicative of the bubble bursting, but rather a leveling-off of prices that had skyrocketed in recent years.

"We're just going to see an adjustment of probably no more than 10 percent, which would just about negate the gain of the last year," said Lee Robinson, a broker with Coldwell Banker.

Robinson reported that she hasn't seen a significant decrease in prices to date, but said that in recent weeks she's seen fewer interested buyers coming to open houses and predicts prices coming back to more reasonable levels in the future.

"We've leveled off, there are fewer and fewer people that can afford these prices so it's slowed the market up," said Robinson.

This softening of the housing market is seen in the relatively high number of homes currently on the market in the neighborhood.

Robinson said that she normally carries between six and eight homes, but currently has eight listings and expects to have at least four more. Robinson also said that homes are staying on the market for slightly longer than she's used to seeing.

"Instead of a month, now it's six to eight weeks," said Robinson

Her experience and those of other brokers are supported by statistics from the Multiple Listing Service, one of a handful of listing services utilized by real estate brokers in the area. According to MLS, there were 93 single-family homes on the market in Dorchester as of Tuesday, which had been listed for an average of 55 days.

The number of homes available is roughly 50 percent higher than the average of about 60 listings.

Some believe that the buyers are still there, but are simply playing the waiting game.

"The buyers are in a wait-and-see mode," said Marlea Mesh, a local broker with Addison Wellesley Real Estate "There's a lot of inventory for them to digest and current events are having an impact on everybody."

In the long term, the increase in the number of homes for sale could be offset by what observers call a low number of new housing starts statewide.

"We're only building between 18,000 and 20,000 [housing starts] a year when we really need to be building twice that," said Tom Callahan, director of the Massachusetts Affordable Housing Alliance.

Callahan said that anecdotal evidence supports a leveling off of prices, but at what he calls a "very high level."

Developer Carl Lizio is banking on the market holding. Last August, Lizio and his partners purchased a home at 199 Neponset Ave. a two-family Victorian on a 12,000-square foot lot. They restored the home, converting it to a single-family, got permission from the city to divide the lot into thirds, and plan to build two new single-family units on either side of the home at 199.

That property just went on the market, and Lizio is confident that not only will there be a buyer for the original house, but that the market will remain strong when it comes time to sell the two homes yet to be built.

"I see these gloomy articles, but that's all chicken little stuff," said Lizio.

Lizio admits that current events, such as the aftermath of Hurricane Katrina and rising gas prices could influence consumer confidence, but believes that the market is in the midst of a correction, not a full-on decline. Further, some buyers have hesitated out of a belief that the steep climb in home prices will fall at some point.

"I don't expect the bubble to burst, but I expect it to adjust downward a bit to where people are more comfortable," said Robinson.

Robinson has been selling in Dorchester since the early '90s and said that in that time she's seen prices nearly triple in some parts of the neighborhood.

Today, homes frequently sell for over a half-million dollars.

"Houses between $650 and $900K sell pretty easily, which didn't used to be the case," said Robinson.

Restored Victorian homes are grabbing the attention of buyers who are drawn in by the quality of the architecture, but who come to see other benefits to settling in Dorchester. Proximity to the MBTA and a strong sense of community are important to buyers, said Robinson, who grew up in Marblehead but moved to Dorchester eight years ago and said has no plans of leaving.

"Dorchester is much more like Marblehead was when I was growing up; it's a back fence neighborhood," said Robinson.

This week, Robinson listed a home on Allston Street near the Shawmut T Station for close to $1.1 million dollars. The home is a restored Victorian, converted from a six-bedroom with one bathroom to a three-bedroom with three baths. The home boasts a four-room master suite, a music room, and a hidden garden with a reflecting pool in the yard. Robinson and others believe that homes such as this one, where considerable work has been done to update homes more than a century old, will continue to draw buyers.

"The market remains strong for highly desirable properties," said Shawn Burgess, a broker with Burgess Real Estate.

Brokers and developers, with a vested interest in continuing the boom of recent years, are confident that while the market might come back to earth a little bit, a move to Dorchester will continue to make sense for many.

"Stand there and look at the Southeast Expressway and all those people on their second or third gallon of three dollar gasoline while they're driving through one of the nicest neighborhoods on the East Coast. All they have to do is come to their senses and do the math," said Lizio.