In Pepperell, which faces unprecedented fiscal difficulties this spring, Town Administrator Robert Hanson said the drop in new housing is a bad sign in the immediate short term, because it means the town cannot raise its levy capacity by much for fiscal 2009, starting in July.

On the other hand, unrestrained residential growth would also be a negative for the town.

“I suppose, if you want to address the effect of growth on services, the lack of new growth is a good thing,” said Hanson. “If you want to address the flexibility in terms of the town’s finances, then it’s a bad thing.”

Regardless of the vantage point, one thing is clear: The town is in uncharted waters, financially speaking.

Pepperell has never faced a Proposition 2 1/2 override vote, a measure Hanson said is becoming increasingly likely this year as officials assemble the annual budget.