Sales of $1 million-plus residential properties, such as this shingle-style mansion built in 1900, have jumped during the first five months of 2004. This home located at 148 School St. in Manchester-by-the-Sea is available for $2.54 million.

It’s no secret that low mortgage interest rates have helped thousands to become first-time homebuyers. But it appears another segment of the home-buying market is benefiting as well – affluent buyers of luxury homes.

Sales of high-end properties in Massachusetts spiked during the first part of the year, according to statistics from The Warren Group, parent company of Banker & Tradesman. Some 680 single-family homes priced $1 million and higher have sold from January through May, a 71 percent increase compared with sales during the same months last year, when 397 homes in that price range traded hands. During the same five-month period in 2002, only 365 million-dollar sales took place. (Statewide statistics for 2004 were available through May 26 as of last week.)

Realtors say low interest rates, the improving economy and stronger consumer confidence have helped boost the high-end housing market.

“I think we’ve seen some good activity,” said Robert Byrne, owner of Century 21 The Alexanders in Needham. “Things have moved pretty well.”

Homes priced between $1 million and $1.5 million in communities like Needham, Dover, Wellesley and Weston have sold at a particularly good pace, according to Byrne. Out of the 680 single-family homes priced $1 million or higher that have sold statewide since January, the majority – more than 540 – have been in the $1 million to $2 million price range, according to statistics from The Warren Group.

As home prices have continued to appreciate in the Bay State, sales of $1 million-plus residential properties have also steadily climbed over the last three years. Some 3,359 homes priced $1 million and up were sold in 2003, a 19 percent increase from 2002 when 2,822 sales in that price category occurred, and 25 percent higher than 2001 when 2,688 high-end home sales were recorded.

But today, buyers of high-priced homes have plenty to choose from as the inventory has grown and continues to rise. “There’s a huge amount of inventory,” said Holly H. Fabyan, a vice president with Coldwell Banker Residential Brokerage in Manchester-by-the-Sea who lists and sells upscale homes in the North Shore.

In Eastern Massachusetts, there were 1,366 single-family homes priced $1 million or more available for sale as of mid-May, up from last year’s high point when there were 1,226 homes in that price range on the market, according to Fabyan, who cited information from Multiple Listing Service Property Information Network.

There is about a 13-month inventory of homes priced $1 million and above, meaning demand for such product could be met for more than a year with the existing supply. For homes in the $2 million range, there is a 20-month inventory, and in the $3 million range there is a 30-month supply inventory, said Fabyan.

“It’s [the luxury home market] never been better because it’s balanced. You’ve got just as many buyers and sellers in that [high] range,” said Fabyan.

While most high-end home sales in Massachusetts so far have been within the $1 million to $2 million price range, Fabyan said that a very active segment of the luxury-home market in eastern Massachusetts has been homes priced between $2 million and $3 million. Sales of homes in the $2 million to $3 million price range during the first four months of 2004 were 51 percent higher than during the same period in 2003, she said.

In prized residential communities like Brookline, where the median price for a single-family home last year was $850,000, million-dollar homes aren’t all that rare. There were at least 60 homes in that price range listed for sale in Brookline as of last week, and 25 of them were priced $2 million or more.

Mixed Results

A flurry of activity in the very high-end market in Brookline in recent weeks, however, has been an encouraging sign to real estate brokers. A Clyde Street home situated on 10 acres of land that was listed for $19.8 million, for example, went under agreement less than two weeks ago, according to a local real estate agent. In addition, two homes on Woodland Road – one with a price tag of $6.9 million – attracted a buyer about three weeks ago, and a newly constructed home on the market for more than $5 million went under agreement a week ago.

But while some real estate brokers are seeing strength in the luxury home market, others say they have witnessed a slowdown. In Newton, Roz Wennett, president of Prudential Edna Krantz, said million-dollar homes are taking longer to sell.

“I think the houses were selling much faster last year, but the prices also weren’t quite as high,” she said. “This year everyone’s decided their house is worth over $1 million.”

As of last week, there were 207 single-family homes listed for sale in Newton and nearly half of them, or 94 houses, were priced at $1 million or higher. “That’s a lot,” said Wennett.

In Needham and Dover, there were 77 properties in the $1 million-plus range available for sale as of last week, up from 56 a year ago, according to Byrne. And it’s taking longer to sell such homes this year. The average marketing time has stretched about three weeks longer in those communities, said Byrne, of Century 21 The Alexanders.

Still, Byrne believes that homes have moved well this year compared with 2003 and 2002, when people were very concerned about the economy and their job security. But as consumer confidence has started to improve, homebuyers and sellers have started to make decisions. “It [housing market performance] has a lot to do with people’s confidence in the economy,” said Byrne.

Meanwhile, in Weston – where the median price for a single-family home reached $1 million last year – about 75 homes out of a total of 97 single-family homes listed for sale last week were priced at $1 million or more. Prue Hay, a Realtor with Rutledge Properties in Wellesley, said there have been some big sales in Weston in recent weeks.

After lingering on the sales market for 329 days, an English Tudor at 4 Willow Road originally listed for $8.45 million sold for $7 million on May 21. Two multi-million-dollar homes that had been on the market for more than a year – a $5.2 million property on Dogwood Road and a $4.3 million mansion on Chestnut Street – went under agreement recently. In addition, a $6.5 million home on Love Lane that had been on sale for 238 days recently attracted a buyer.

With summer quickly approaching – a time when buyer activity typically slows – Hay is hoping that the momentum won’t ease, especially since she just listed a $5.4 million home on Wellesley Street in Weston.

“I’ve got my fingers crossed that the high-end buyers are still circling around. I know they’re out there. Hopefully, they’re still in the market and won’t put everything off until September,” said Hay.