The Boston Herald has the latest from Massachusetts. "Massachusetts house sales plummeted 21 percent last month, stoking fears that the housing bubble may have burst and could send shock waves across the economy. It was the biggest year-over-year sales drop in almost 11 years, as Realtors recorded the slowest January since 1996."

"What’s more, one of the worst fears of homeowners appears to be coming true: House values have dropped nearly 8 percent since August."

"The MAR reported yesterday that only 2,345 houses changed hands last month. That’s down more than 20 percent from January 2005’s volume and an even steeper 34.4 percent from December levels. 'Higher mortgage rates, increased inventory levels and bold predictions of major price corrections' kept buyers on the sidelines, said MAR President David Wluka."

"The MAR also said median house-sale prices fell to $345,500 in January, off 0.1 percent from January 2005 and 2.4 percent from December. All told, median prices have dropped 7.9 percent from August’s $375,000 peak. Wellesley College economist Karl Case said the latest figures show 'evidence of a bubble, but housing-market bubbles don’t unwind the way stock-market bubbles do.'"

"The MAR said median condo-sale prices hit $270,000 last month, down 1.8 percent from December but up 1.9 percent from January 2005."

The Boston Globe. "The number of 'active listings'; homes being offered for sale, for both single-family homes and condos in January rose 41 percent from January, 2005, the realtors association said. 'It's a balloon, not a bubble,' Wluka said of the local housing market. 'Balloons inflate and deflate; bubbles burst.'"

"'For the last few years, buyers often outnumbered the supply of homes for sale, allowing prices to escalate rapidly, but that's no longer the case,' said Wluka. More recently, activity has picked up because of mild weather and 'more realistic pricing on the part of home sellers,' Wluka said."