Mass. housing market ends worst year in decade

The Boston Globe reports:

Massachusetts house prices tumbled 5.4 percent in December, in a sour endnote to the worst year for the state's housing market in a decade.

Amid new evidence the state is still struggling to emerge from the housing downturn, economists said it is likely prices for single-family houses will continue to decline this year. Single-family sales for 2006 were 41,593, which was the lowest total since 1996, according to the Massachusetts Association of Realtors, which released its monthly market report yesterday.

"We're working through the correction," said Larissa Duzhansky, an economist with Global Insight, a Lexington economics and consulting firm. She predicted, "We're going to see home prices going down in 2007."

The backdrop for Massachusetts' woes was the biggest one-year drop in home sales nationwide since 1989, 8.4 percent. Last month, existing home sales across the country were down 0.8 percent to an annualized rate of 6.22 million homes, the National Association of Realtors said.

The Northeast and the West Coast were hit particularly hard, with sales declines of 2.8 percent and 9.1 percent last month, respectively, the realtors association said. That offset higher sales in housing markets in the South and Midwest, fueling speculation that the housing market may be dampening economic growth.

Maybe if Massachusetts had decent population growth things wouldn't be so glum.