It's not surprising Massachusetts tops the list of a significant federal house price index.

Harsh winters aside, New England's Bay State enjoys a unique economy that's attractive to many home buyers -- technology-intensive industry supported by a well-educated labor force.

Home prices in Massachusetts rose 13. 5 percent in the past year, faster than any other state in the nation, according to the Office of Federal Housing Enterprise Oversight's (OFHEO) first quarter House Price Index (HPI).

Massachusetts' HPI of 309.9 is expected to surpass 400 by year's end.

Based on an index of 100 in 1980, the OFHEO's quarterly House Price Index tracks, not home prices, but average house price changes of repeat sales or refinanced mortgages on single-family properties.

Massachusetts' index rose 42.1 percent in the past five years. Only Michigan, with a five year index increase of 43.6 percent and Colorado, with a five-year index increase of 42.3 have risen faster.

Actual prices in Massachusetts pushed even higher than the HPI gain, according to the Massachusetts Association of Realtors.

Average single family home prices in the first quarter 2000, at $266,925, were up 18.6 percent from $ 225,063 in the first quarter in 1999, said MAR which does not record median prices.

With strongest price and sales gains in the state's more metropolitan eastern counties, move-up buyers and others after more expensive homes are driving the market.

"The current trend is a predominance in upper-end unit sales. In the first quarter, sales of homes $500,000 and up were up 26 percent. Sales of homes priced $300,000 and below were down 12.2 percent," said John Dulczewski, MAR spokesman.

"Certainly part of it is the investments people have made in stocks and mutual funds. They are moving that money into housing. In general, the economy has been quite strong," Dulczewski said.

Along with thousands of jobs created by the technology industry, Massachusetts is also a mutual fund and biomedical research and development center with an unemployment rate that's nearly off the charts.

The state's 2.5 percent unemployment rate in May helped establish the state's first 2.8 percent three-month average.

"Massachusetts is attracting upscale families earning a decent living. A large foreign population settling in eastern Massachusetts has also contributed to the strong demand for housing in the last five years. They are from Europe, but Boston has a strong Asian population," Dulczewski said.

The I-495 Technology Corridor of high-tech industries and research and development concerns built along the eastern region's primary north-south route is also fueling the market.

"In the eastern half of Worcester (Central Massachusetts) there has been a pretty significant revitalization of active multifamily communities taking advantage of commuter rail system improvements. It leads in terms of home buying increases. That I-495 swing from north to south brushes against the eastern towns of Worcester County," Dulczewski said.

Published: July 21, 2000

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.