By Keith Reed, Globe Staff | September 25, 2004
A drop in the pace of home sales was not enough to keep housing from getting even more expensive across Massachusetts last month.
Median prices for single-family dwellings jumped 12.4 percent in August compared to the same month last year, despite that sales slowed by 0.5 percent during the same time frame, according to the Massachusetts Association of Realtors’ monthly report.
The median price of a single-family home in Massachusetts was $358,000 last month, compared with $318,500 in August 2003.
Meanwhile, condominiums, the more affordable option, are selling and quickly appreciating.
Condo sales leapt 22.1 percent last month compared with August 2003, and median prices surged by 14.1 percent during the 12-month period, from $240,000 to $273,900.
Real estate brokers said the numbers continue to reflect a strengthening economy in which housing is considered a good and safe investment. Steadily rising prices show home buyers have yet to be affected by an expected increase in interest rates in the near future, said Judy Moore, president of the Massachusetts Association of Realtors. The average 30-year fixed mortgage rate was at 5.7 percent this week, according to Freddie Mac.
‘‘Usually when the rates reach a certain point, the prices moderate, and we haven’t seen that,’’ she said. ‘‘The reason for that is because the economy is improving. Housing continues to be one of the strongest parts of our economy.’’
Home prices are still strong in Massachusetts, but the slowed pace of single-family home sales here and nationally could indicate the cooling of a three-year hot streak in the housing market. Nationally, sales of single-family dwellings ticked up 3.9 percent in August, while the median sales price jumped 7.7 percent over the same time a year ago.
Moore said sales in Massachusetts probably lagged the rest of the country in August because of interest rate hikes earlier this year. Fixed-rate, 30-year mortgages peaked at 6.44 percent in June, she said, and that likely knocked many prospective first-time buyers out of the pricey Massachusetts real estate market.
‘‘Summer is typically slower for home sales, and because many first-time buyers jumped in early, as rates climbed they got sidelined,’’ she said.
‘‘We’re expecting the fall to be extremely busy again, and then after the election, the expectation is that the rates will start to climb.’’
The real bright spot continued to be condos, as both sales and prices kept a strong pace statewide last month. Condos are doing very well because they ‘‘appeal x to all buyers, the first-timers and the baby boomers moving back into the city from the suburbs,’’ Moore said.
But some market observers cautioned that homeownership may be getting too expensive for even middle-class Massachusetts families. Surging home prices show that a growing number of people continue to want to live here, but many others may be getting priced out of the market, said Sam Yoon, director of housing for the Asian Community Development Corp. in Boston, and a recently declared candidate for Boston City Council.
‘‘It certainly tells us that Massachusetts continues to be a very desirable place to live,’’ Yoon said.
‘‘But it is a real problem for one very important sector of the market — families or individuals who are buying a first home, people who are transitioning from renters to owners. For them, the American dream is increasingly out of reach in Boston.’’
Keith Reed can be reached at reed@globe.com. 
