Mass. home prices jump in March

Prices of single-family houses and condominiums in Massachusetts surged at double-digit rates in March amid strong sales activity.

The median price for a single-family home in Massachusetts rose 12.7 percent to $350,000 in March from $310,500 a year earlier, the Massachusetts Association of Realtors reported yesterday. That was the biggest price gain since last November. The median price of condos in the state rose 10.9 percent to $265,000 from $239,000. The median price is the midpoint price of all houses or condos sold in a given period.

Steve Andrews, vice president of capital markets for Sovereign Bank, said people want to get into the market or to trade up to a larger house before prices or interest rates -- or both -- creep higher. Despite a series of short-term rate increases by the Federal Reserve Bank, 30-year fixed rate mortgages fell below 6 percent last summer and have stayed there for most of the year.

Sales activity for both condos and single-family houses was strong last month, but the rate of condo appreciation is well below monthly price gains seen during most of last year, when they reached as high as 18 percent. Condo prices actually dipped last month from February, when the median price was $269,000.

John Dulczewski, Massachusetts Realtors Association spokesman, said condo prices have moderated because inventory is more plentiful. ''There has been a lot of new construction," he said. There were 2,300 more condo listings on the market last month than in March 2004, Dulczewski said.

Complicated local permitting and zoning regulations make it ''a challenge to bring new detached, single homes on line" in large quantities, Dulczewski said. Prices continue to escalate significantly because the supply is ''not really adequate to meet the current demand," he said.

The 3,382 closings on single-family houses last month was the second highest recorded for the month of March. The record of 3,507 sales was set in 1999 when the state's economy was booming. Between January and March, 8,654 detached single-families were sold, compared with 8,288 during the first three months of last year. The 4,064 condominiums sold between January and March were up from 3,334 during the same period last year.

''Buyers continue to defy" predictions that sales will slow, said Dulczewski.

Andrews said long-term mortgage rates have remained low because the bond market has felt the Fed has been successful in containing inflation. The Fed raised rates four times between November and March to curb economic activity and inflation. More recently, there has been renewed concern on Wall Street that rising oil prices are driving up inflation.

Interest rates ''were so low for so long [home buyers] were just trying to jump in before they went over 6" percent, said Maribeth Boisvert, an agent with the Shrewsbury office of Coldwell Banker, whose market encompasses the Metrowest area. Since January, she said, ''our office has been just going nuts."

Kimberly Blanton can be reached at blanton@globe.com.