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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n