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Mass. housing market held steady for 2010

By Jenifer B. McKim
Globe Staff / January 26, 2011

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The long-troubled Massachusetts housing market appears to have stabilized in 2010, with single-family home sales down less then 1 percent compared with the year before and median prices up by 3.5 percent to $295,000, according to data released yesterday.

The final figures were aided by a healthy jump of 6.9 percent in sales of single-family homes in December, which offset declines in some other months.

It marked the first time sales increased in the state since June, according to Warren Group, a Boston company that provides local real estate data. Even as more homes were sold, median prices fell by almost 6 percent in December, the only month in 2010 when home values dropped compared with the year before, according to Warren Group.

The various numbers prompted several local economists to say the Massachusetts housing market is still bouncing along a bottom that it first hit in March 2009.

“You are not seeing some death spiral of housing prices, but rather a long slow period in the muck,’’ said Edward Glaeser, an economics professor at Harvard University.

“The hope is it gets out of neutral and gains some steam,’’ said Eric Belsky, managing director for the Joint Center for Housing Studies at Harvard University.

The state’s housing market has fared somewhat better than the rest of the country, with home values down about 16.3 percent from their peak in September 2005, according to the S&P/Case Shiller Home Prices Indices, which measures repeat home sales.

In comparison, housing values in 20 cities tracked by S&P/Case Shiller have fallen about 30.4 percent from their 2006 highs. Over the last year, Boston-area housing values dropped about 0.8 percent, according to S&P/Case Shiller, which released November data yesterday.

Laurie Cadigan, president of the Massachusetts Association of Realtors, said she hoped that sales would continue to improve as prices decline. But she is worried that the harsh winter will hurt business. “We will have to wait and see the impact that the multiple feet of snow we’ve had will have on buyers,’’ she said.

As the overall housing market struggled locally in 2010, some segments of the market fared better. For example, sales of condos in downtown Boston increased by 3.8 percent and median selling prices rose by 5.4 percent to $470,000 compared with the year before, according to Listing Information Network, a Boston company that tracks condo sales in 12 downtown neighborhoods, including the Back Bay, Beacon Hill, and the South End.

Sales in Boston luxury buildings, hard hit by the 2008 financial crisis, also jumped a robust 22.15 percent in 2010 compared with 2009, according to Listing Information Network.

It was the first time sales in the luxury market — defined as buildings with concierges and other services — increased since 2004. Median sales prices also went up, by nearly 2 percent.

David Stenberg, manager of Hammond Residential Real Estate in Boston, said he expects this year to be stronger than last.

“The road to recovery is continuing,’’ Stenberg said. “I don’t believe it will be dramatic but I think it will be slow, steady, continued progress.’’

Jenifer B. McKim can be reached at jmckim@globe.com.