Nantucket Island Massachusetts Directory of Real Estate Resources

Rising mortgage rates could slow the soaring housing prices in Massachusetts, but a repeat of the price drop-off in the early 1990s is unlikely according to economists with the federal government.

A report from the Federal Deposit Insurance Corp. shows wide variation in the Massachusetts housing market with prices on Cape Cod more than doubling over the past five years — nearly twice the growth rate in the Springfield and Pittsfield areas.

The statewide average price rose nearly 72 percent from the first quarter of 2000 to this year’s first quarter, exceeding the nearly 51 percent growth for the nation as a whole.

The report also stated that a decline in housing prices is unlikely because supply is so tight. By contrast, in the 1980s many homes were built in anticipation that a buyer could be found, leading to a glut of homes and falling prices when the economy soured.

This seems most applicable to Nantucket with a finite supply and buyers on the sidelines waiting for any dip in prices to get into the market.

The Mass Housing Market article can be found on Boston.com