Massachusetts housing sales and prices fell in 2011

It's official: 2011 was a bad year for the local housing market.

Sales of single-family homes in Massachusetts dropped by almost 6 percent last year, to 38,994, compared with 2010. That was the fewest number of deals since 1990, according to Warren Group, a private company that tracks local real estate.

Median home prices also declined by 3 percent, to $286,000, marking the third year in a row in which median prices were below $300,000.

Condominium sales in 2011 also slowed, falling 16.2 percent compared with the previous year, Warren Group said, the lowest number of condo transactions since 1995. In one of the few positive trends, median prices for condos rose almost 2 percent compared with 2010, reaching $270,000.

Most real estate specialists say that the statistics won't be dramatically different in 2012.

"We continue to be trapped in this vicious circle where unemployment and the pipeline of foreclosures continue to restrain any recovery at all in the housing market,'' said Michael Goodman, associate professor of public policy at the University of Massachusetts Dartmouth. "The best-case scenario would be some slow improvement from this bottom.''

Timothy M. Warren Jr., chief executive of Warren Group, expects sales to increase this year, but he predicts prices will remain flat. Warren said 2011 was the first full year without the federal home buyers' tax credit that spurred sales in the first half of 2010 and then prompted a major slowdown during the remainder of that year. He said the fact that sales were off by only 6 percent last year - without federal government intervention - passes as good news.

"It could have been a whole lot worse,'' Warren said. "The question is whether the market is poised to make a slow and steady recovery. The coming spring market will tell a lot.''

Single-family home sales in December dropped 5 percent statewide, compared with the same month in 2010, dampening hopes in the real estate industry that sales were starting to pick up, according to Warren Group. But the number of sales in the fourth quarter reached 9,991, 5.6 percent more than during the same period in 2010.

Houses that sold in December were also on the market slightly longer compared with that month in 2010 - 119 days versus 112 - according to the Massachusetts Association of Realtors, which also released data yesterday. The association, which calculates housing data slightly differently than Warren Group does, found that December sales were largely flat compared with the year before.

Despite the generally down data, some in the industry found some reason to be optimistic, citing several factors that could boost the market as the spring selling season approaches.

"We are encouraged by the strides the market made in the second half of the year,'' said Trisha McCarthy, broker at Keller Williams Realty in Newburyport. "The milder winter, coupled with low interest rates and reasonable home prices, should improve the outlook.''