Single-Family Home Sales, Prices Drop in December

Massachusetts single-family housing sales had their worst December since 1991, and the median sale price fell 8.1 percent to $310,000 in December 2006, the lowest monthly figure since March 2004, according to a report by the Warren Group, a Boston provider of real estate data and the publisher of Banker & Tradesman.

December single family-home sales fell 8.4 percent from December 2005 to 4,037, the lowest level for the month since 1991. For all of 2006, single-family home sales dropped 14.4 percent to 54,203, the lowest since 1995, and down 20 percent from the peak in 2004. The Median sales price droped 5.8 percent to $325,000 in 2006; the first annual drop since 1993.

In other area news that has attributed to the above conditions...

Land use restrictions in metro Boston among the most stringent in U.S.

A new study examining land use regulations in more than 2,600 communities across the U.S. found that Boston and its immediate suburbs impose some of the most restrictive rules on residential construction in the nation. The study, conducted by the University of Pennsylvania's Wharton School of Business, ranked Boston and 40 nearby cities and towns as second only to the Providence, R.I. area among 47 metropolitan markets in terms of severity of regulation placed on housing development.

This heavy regulation is contributing to the region's high housing prices and helping to limit the local housing supply, which in turn is prompting young professionals and working-class families to leave the state in increasingly larger numbers, according to the study's authors. These findings come as little surprise to local REALTORS® and help to validate the public policy efforts undertaken by the Greater Boston Real Estate Board, in recent years to support legislation aimed at expediting permitting processes and reducing the amount of zoning and land-use controls placed on residential and commercial development in the Commonwealth.

The Boston area's high ranking is attributable in part to minimum lot size requirements that are much larger here than in communities in the South and Midwest, as well as the prominent role local elected officials, neighbors and community groups are often given in reviewing residential projects and zoning proposals. In many Bay State communities, it's not uncommon for municipal zoning departments, boards of health and other elected officials to impose excessive regulatory controls on residential development to limit growth, reduce housing density, or preserve open space, the report found.