Applebaum (not to be confused with Papelbon) of the Boston.com and the Globe reports that

Sales of single-family homes in Massachusetts remained in a deep rut in February, 19 percent below sales in the same month last year, but in a sign that the worst may be upon us, the depth of the rut did not increase.

All markets are cyclical. We are in our 28th month of decline in the Boston market. It is only a matter of time before prices turnaround. I used to provide a lot of statistics and I’ve been thinking I should get back to that. So here are some:

Average Asking Price for a Multifamily in Massachusetts
March, 2007 - $398,315
March, 2008 - $337,735
16% decline

Average Multifamily Sales Price
YTD 2008 $296,714 on volume of 958 Sales
Same period 2007 $368,390 on volume of 1240 Sales
19.5% Drop in Value
23% Drop in Volume

These numbers are according to MLSPIN and are not filtered for size. This is a statewide survey. Some locations are fairing better than others.

One of the reasons the volume and price declines in the multifamily market are so steep is because condo conversions largely drove the multifamily boom, it certainly wasn’t rental rates. Now as the multifamily number settle back down the numbers are going to start to make sense for rentals again.

I am really encouraging any client I’m working with to NOT attempt condo conversions on multis right now it is a VERY dangerous game. Of course each market is different, but largely I’d ask you please to avoid the condo conversion business plan.