Bay State condo sales have been dragging for the last four years.

Condo sales peaked in 2005, when 32,907 condos traded. About half that amount – only 15,308 condos – have been sold in the first 10 months of 2009, according to The Warren Group.  

The last two months have offered some hopeful news. Unit sales increased year-over-year in September and October.

In fact, The Warren Group reports today that condo sales statewide jumped 12 percent to 1,854 in October from 1,655 in October 2008. Still, sales are 13 percent below what they were a year ago.

There are a few towns that are bucking that downward trend.

Westborough, Wayland, Lexington, Melrose, Weymouth and Boston’s Roslindale neighborhood are among them.

In Westborough sales shot up to 70 in the first 10 months of 2009, more than twice the unit sales recorded last year.

In Weymouth and Roslindale, condo sales transactions rose 37 percent from 2008 levels.

In some communities, the increase in unit sales may have to do with new developments that have come online in the last year or so.

Still, in others, reduced prices, attractive interest rates, and a first-time homebuyer tax credit are drawing buyers. 

Check out this graph that shows condo sales by month from 2007 to today.

Perhaps someone needs to remind Curt Schilling that Medfield isn’t Weston.

It’s not that Medfield isn’t a lovely and desirable community. I know some great families who’ve moved there and rave about the town.

It’s just that Medfield homes don’t fetch the kind of prices that Weston homes do.

Schilling has been trying to unload his 26-acre estate since last year.

The Boston Herald reports that the property, which includes the Schillings’ 11,000-square-foot residence, was originally listed for $8 million but the price has been reduced to $4.5 million.

Just how many homes with $3 million-plus price tags have sold in Medfield? Exactly two in the last 10 years, according to data from The Warren Group.

One is the estate that the former Boston Red Sox pitcher currently owns.

He and his wife Shonda purchased the property in 2004 for $4.5 million from Drew Bledsoe.

And the other property that sold doesn’t really count.

It’s a single-family home on 34 acres – the historic Cronin homestead — that the town of Medfield purchased for $3 million last year for preservation purposes.

For the record, 84 homes priced $3 million and higher have sold in Weston in the last decade.

During a tour of foreclosed properties in Fall River earlier this week, U.S. Housing and Urban Development Secretary Shaun Donovan noted that he’s seeing early signs of progress because foreclosure rates nationwide have dropped.

Part of that drop probably has to do with the federal push to get lenders to modify loans for borrowers. The U.S. Treasury Department reports that more than 650,000 borrowers have signed up for trial loan modifications.

Here in Massachusetts, the number of residential property foreclosures has declined from last year.

But petitions to foreclose – which mark the first step in the foreclosure process – are up more than 20 percent. And nationally, the mortgage delinquency rate has hit a record.

The Warren Group will release its latest report on foreclosures in Massachusetts tomorrow and depending on how you look at the numbers, there’s a mixture of good and bad news.

But there’s one factor that will always spell bad news for foreclosures: unemployment. And unfortunately, there haven’t been any early signs that unemployment is heading down.

By now, most real estate industry professionals have already heard about the rosy forecast that the chief economist of the National Association of Realtors has made.

Lawrence Yun, NAR’s head economist, predicts that home prices will increase between 3 percent and 5 percent next year while existing-home sales will jump nearly 14 percent to 5.7 million.

Yun says barring any “unforeseen events impacting the economy”, factors like the expansion of the tax credit and the drop in housing inventory are helping to stabilize the housing market and should lead to its recovery.

But I can hear the skeptics now: what about the fact that unemployment is expected to increase through the first half of 2010 and may even reach 11 percent?

And I can appreciate the skeptics’ concerns.

NAR’s chief leaders have been criticized for their overly optimistic forecasts and their failure to acknowledge the last housing bubble. In fact, some bloggers and web sites emerged in recent years devoted to ridiculing Yun’s predecessor, David Lereah, who authored a book titled “Are You Missing the Real Estate Boom?”.

What are your thoughts? Do you think Massachusetts home prices will increase next year?  

There have been several reports, including one from Zillow earlier this week, about home prices rising or stabilizing in some parts of the country.

Does that include the Bay State?

Statewide, median home prices so far this year are off almost 10 percent from last year, according to The Warren Group.

But the rate of decline has been narrowing over the last several months, and in September the price drop was only 1.4 percent.

Greater Boston home prices actually rose year-over-year for the first time in 2009 during the month of September.

The median price for single-family homes sold in towns and cities within Route 128 inched up 1.9 percent to $360,000 in September from $353,250 in September 2008, according to The Warren Group.

Will Greater Boston home prices climb in upcoming months? I’m guessing that the momentum and popularity behind the tax credit has helped boost sales and may lead to some improvement in Boston-area. But I don’t think we’re going to see a big bump-up in prices.

Homeowners with two mortgages or those who used 100 percent financing to purchase their residences and are now trying to negotiate a short sale may be facing even more trouble in the future.

Short sales, when a property is sold for less than what is owed on the mortgage, have become more common because properties values have plunged and more homeowners are facing foreclosure.

Short sale deals involving a primary mortgage and second mortgage have always been tougher to hammer out.

But in the past, homeowners with two loans who were trying to avoid foreclosure have been able to negotiate short sales deals where the second mortgage holder gets a small amount or nothing at all.  

Now, second mortgage holders aren’t as willing to agree to such deals.

A recent story in BusinessWeek noted that Bank of America, is requesting homeowners to fork over as much as 5 percent of the sale proceeds in transactions where the bank holds the second mortgage.

Those are tough terms for already-stretched borrowers to accept.

I have to admit that I’m one of those people who watch reality television. Lately, I’ve been watching the Bravo TV series “Million Dollar Listing”.

The show follows three young, stylish and incredibly self-centered real estate agents who make hefty commissions listing and selling mansions in Beverly Hills, Malibu and all sorts of other ritzy parts of Los Angeles that I’ve never visited.

This is the third season of the show.

The first two seasons featured plenty of scenes with these hot-shot agents gloating over how much money they made from the deals they inked — $100,000 here another $80,000 there …

Fast forward to this season: The real estate market has tanked and real estate agents all over the country are hurting.

The Million Dollar Listing trio is now spending a lot of time trying to convince clients to lower their asking prices or wait out the market. At least one of them has partnered with another agent to move a property.

They all spend some time complaining about their demanding clients – hmm, I would be demanding too if I had a multi-million dollar property and I was hiring an agent who stood to make an almost six-figure commission on the sale.

But they still manage to drive expensive cars, wear cool designer clothes, and eat at all the trendy restaurants.

Even though this is supposed to be a “reality” show, I really don’t think this is the reality for most real estate agents today.

Fannie Mae has announced a new program designed to help homeowners who are facing foreclosure.

The government-controlled company is giving homeowners at risk of foreclosure the option of renting their homes.

Homeowners who are interested would have to transfer ownership of their homes to Fannie and sign a one-year lease. But to qualify, homeowners must be able to prove that they can afford market rent that can’t be more than 31 percent of their pre-tax income.

The new effort will be of little comfort to roughly 760 homeowners in Massachusetts who were foreclosed on by Fannie Mae since the beginning of this year, according to The Warren Group.

Still, it could help people who desperately want to remain in their homes and avoid the harm a foreclosure would cause to their credit records.

Investors are out in droves snapping up discounted properties.

I haven’t done a scientific poll to prove this, but if you listen to real estate agents, auctioneers and even some prospective homebuyers who’ve had their purchase offers rejected you’ll believe that to be the case.

In today’s Boston Herald, for example, a story about an auction held in Boston on Monday night gives readers an idea of what kind of deals can be had in this housing market. At the auction, one bidder bought a Foxboro condo that previously went for $206,349 for a little over $89,000

 “First-time homeowners and investors walked away with some incredible  bargains,” the auctioneer told Herald reporter Thomas Grillo.

In some cases, these investors are also driving up prices. A friend recently told me about a multifamily home in Newton that he and his wife wanted to purchase. He put in an offer but there were several other offers on the home.

 He refused to increase his offer and the home eventually went to someone who was prepared to pay several thousands more than the asking price.

Such multiple offer situations and bidding wars are a bit disappointing for prospective homebuyers who’ve been told that price reductions make this a good time to buy — particularly in neighborhoods that they previously couldn’t afford.