For the first time in more than a year, Massachusetts sales of single family homes rose on a year-over-year basis in January 2007. According to the Massachusetts Association of REALTORS® (MAR), single-family home sales spiked more than 12 percent last month.

The increase was the first double-digit sales increase since January 2005.

"While there was growth compared to last year, sales volume did decrease 13.3 percent from December 2006 (3,166 homes sold to 2,744 homes sold in January 2007).  However, this decrease is typical, as sales volume historically drops between the months of December and January.  In fact, this is the smallest decrease for any December to January time period on record, which typically experiences an average drop of 26 percent."

On February 27, 2007, The Boston Globe reported, "The median price of a single-family home fell to $340,000, a 2.4 percent drop compared to a year earlier but virtually unchanged for the past four months."

A combination of the lack of snow and more affordable homes are credited with the increase in sales.

Condominium sales also increased, the MAR reported.

"Sales of condominiums also rose in January compared to the same time last year with an increase of 5.3 percent (1,207 units sold in 2006 to 1,271 units sold in 2007).  On a month-to-month comparison, sales volume was down 17.7 percent (from 1,544 units sold in December 2006 to 1,271 units sold in January 2007).  Similar to the single-family home market, sales volume historically decreases from December to January. 

"Median selling prices for condominiums remained nearly unchanged as there was an identical drop of less than one percent (-0.7%) in both year-over-year and month-to-month benchmarks.  The median selling price for condominiums in both January 2006 and December 2006 was $270,000, with a median sales price of $268,000 in January 2007."

A significant statistic getting little play in the media so far in the decrease in inventory.

"The inventory of residential properties (single-family detached homes and condos) on the market decreased 16.2 percent in January 2007 compared to the same time last year (from 51,122 listings to 42,794 listings in 2007).  At the current sales pace this represents 10.7 months of supply, a decrease from 14.6 months of supply in January 2006.  It is considered a balanced market when there is between 7.5 and 8.5 months of available housing supply.  Residential properties did stay on the market an average of 142 days in January 2007 compared to an average of 104 days in January 2006."

The Warren Group, a provider or real estate data in New England, released its own statistics indicating Massachusetts single-family home sales rose 5.1 percent and prices fell 3.4 percent.

"'This rise in sales, while not yet a trend, could be a hopeful sign for the housing market ,' said Timothy Warren Jr., CEO of The Warren Group. 'When sales started to fall in 2005, it was almost a year before prices did the same. The opposite could be true now. If sales continue to climb, it could take several months for prices to increase again. It can take time for supply and demand to even out, and homebuyers need to see strong evidence of an increase in sales before they become more willing to compromise over what they will pay for a home.'"

The Warren Group said condo sales in the Commonwealth rose 2.8 percent in January 2007 compared to year-before numbers, from 1,821 in January 2006 to 1,871 in January 2007, and the median sale price remained flat at $267,500.

Potential home buyers hoping for even better deals in the spring or summer may be disappointed. Although I do not expect steady increases in prices before the fall or early 2008, the across-the-board sales declines seem to be over.

The decline in inventory will also impact the mindset of sellers and buyers. Sellers will feel less pressure to significantly lower their asking prices, and buyers will not feel as confident that something comparable will be available or come on market, if a seller isn't willing to accept a particular offer.