Despite signs that the sizzling-hot condo market was starting to fizzle out in the last months of 2005, condo sales in Massachusetts shot up 12 percent last year, spurred in part by continued demand from aging baby boomers and young first-time buyers.

A total of 34,672 condos were sold last year, up from 30,918 in 2004, according to The Warren Group, parent company of Banker & Tradesman. Prices were also on the rise, with the median selling price for a condo reaching $278,379, an 8 percent increase from a year earlier.

Year-over-year condo sales climbed in most parts of the state, except Suffolk County and Barnstable County where sales slipped slightly. Condo prices and sales have risen steadily in Massachusetts since 2001, when 22,863 condos were sold and the median selling price was $172,000.

Real estate brokers say empty nesters seeking to move out of their suburban homes and into newly built condos that require less maintenance continued to fuel demand. New age-restricted condo developments designed for people 55 and older that have been springing up throughout the state in recent years have helped boost overall sales, they say.

“There are a whole lot of new 55 and older communities in the marketplace. They’re all being built condo-style and we’re seeing a bunch of people turn to those,” said Bruce Taylor, president of ERA Key Realty Services, a Whitinsville-based firm that has offices in several Worcester County communities. “That’s a new element in the marketplace that we didn’t have five to six years ago.”

And it’s not just aging baby boomers who are moving into condos. Buyers who can’t afford a single-family home in many Bay State communities are also turning to condos.

“People have had to seek other alternatives and they’ve bought condos instead of single-family [homes] because they can afford them,” said Taylor. “More than ever now, the starter option is to buy a condo.”

‘Circling Around’
Condo sales jumped 30 percent in Worcester County last year, with a total of 3,055 units sold compared to 2,350 in 2004, according to The Warren Group. The median selling price for condos increased 15 percent to $205,127 from $178,000.

Sales also surged 29 percent in Middlesex County, where 8,798 units were sold, and the median price for a condo escalated 16.6 percent to nearly $300,000 last year.

In Plymouth County, condo sales were up 20.3 percent. Some 1,817 condos were sold last year compared to 1,510 a year earlier.

Plymouth broker Rita Gallant said there is a limited supply of condos in Plymouth County, even though a number of apartment complexes have been converted into condos and some higher-end, waterfront condos are available.

But Gallant said there are very few condos priced between $250,000 and $350,000 in Plymouth County.

“We need more condominiums in all price ranges,” said Gallant, who is president of The Realty Guild, an organization representing independent firms in Massachusetts.

The median price for condos sold in Plymouth County crept up 6 percent to $267,000 in 2005 from $252,650 a year earlier.

Gallant, one of the owners of Plymouth Village Realtors, has seen the increase in condo prices firsthand. Gallant’s firm handled the recent resale of a condo that sold as a newly built unit in 1994 for $195,000. Three years later, the condo sold for $220,000 and then in 2003 it sold for $499,000. Last November, the same condo fetched $600,000.

While the condo market registered impressive gains in many parts of the Bay State, unit sales eased back 1.3 percent in Suffolk County last year, and the median selling price posted a more modest 2.1 percent increase, rising from $333,000 in 2004 to $340,000.

That’s a significant change from the prior two years, when condo sales in Suffolk County – which includes Boston, Chelsea, Revere and Winthrop – jumped 42 percent and the median selling price rose 11 percent from 2003 to 2004, according to The Warren Group.

Sales fell 10 percent in central Boston – which includes the Back Bay, Beacon Hill, South End, North End, Fenway, Financial and waterfront districts – neighborhoods where condos are plentiful. According to The Warren Group, 2,535 condos were sold in those neighborhoods last year, down from 2,828 in 2004.

But prices in those desirable neighborhoods continued their upward trend. The median price for condos sold in those central Boston neighborhoods last year exceeded $500,000, a 10 percent increase from the prior year.

Curtis Kemeny, chief executive officer and president of Boston Residential Group, said there was a slight correction in the Boston condo market during the fourth quarter following the Gulf Coast hurricanes, spike in oil prices and the terrorist subway bombings in London.

“There were a series of events that collectively eroded consumer confidence,” said Kemeny, who noted that buyers were “circling around” to see if home prices would come down.

Fourth-quarter condo sales in Suffolk County dipped 7.5 percent. A total of 1,723 condos were sold in Suffolk County during last year’s fourth quarter, compared to 1,863 during the fourth quarter of 2004.

Statewide, condo sales in the fourth quarter were relatively flat, with 7,806 condos selling during the last three months of 2005, compared to 7,726 during the same period in 2004.

The fourth-quarter “pause” in buyer activity was preceded by an overheated market when double-digit increases in prices and sales volume were common, according to Kemeny.

“It was not sustainable over the long-term,” he said.

Still, Kemeny doesn’t think the Boston condo market is headed for a bumpy road because of the healthy demand coming from empty nesters and young professionals. And even though a fresh supply of new condos has emerged in Boston and more units are under construction, Kemeny said the number of available units is still low.

“There’s always demand for unique, high-quality product even when the market slows down,” said Kemeny, whose firm purchased an office building at 285 Columbus Ave. with plans to convert it into 65 luxury condos.

Kemeny said he anticipates a return to “normalcy” this year, with sales and price increases of 3 percent to 5 percent. He added that he’s already seen a strong start to 2006.

“What we’re seeing is this significant increase in traffic, interest and commitment,” he said.