Home price drops key in reviving sales

Florida communities crushed beneath a collapsing housing market seem to have rediscovered a bracing formula: Cut prices sharply and sales will soar.

It's happened dramatically in places like Fort Pierce and Fort Myers, where 32-percent price drops in June drew in swarms of new home buyers. Fort Pierce's sales jumped 43 percent. Fort Myers' rose 29 percent.

It's happened more modestly in the Tampa Bay area, where a yearly 19 percent home price decline created a relatively small 3 percent dip in sales in June.

According to the Florida Association of Realtors, Tampa Bay area home sales totaled 2,346 in June, down from the 2,428 sales in June 2007. On a month-to-month basis, June sales were up 3 percent over the 2,270 homes that sold in May.

The median home sale price fell locally from $220,900 in June 2007 to $178,700 in June 2008.

Nationally, sales rises were reported in formerly slumping communities like Las Vegas, Bakersfield, Calif., and Phoenix. On the other hand, markets once resistant to the slump — think Atlanta and Houston — suffered larger declines.

"Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half," said Lawrence Yun, chief economist of the National Association of Realtors.

Pinellas, Pasco, Hillsborough and Hernando counties did better than the state as a whole, which suffered a 5 percent yearly sales decline. Nationally, single-family home sales fell 14.8 percent in June vs. a year earlier. But those numbers were seasonally adjusted to iron out differences between brisk summer and weak winter sales.

As South and Central Florida showed modest recovery, Florida's northern part caught a more severe dose of the downturn. Sales were off 28 percent in Tallahassee and 33 percent in Ocala.

Home prices didn't fall the past year in Panama City, but sales plunged 35 percent, the state's worst performance.

Realtors suggest that some of the sales improvement stems from bottom-feeding investors re-entering the market. Homes have gotten so cheap in some foreclosure-heavy neighborhoods that investors are once again buying and renting out homes at a profit.

Home price drops key in reviving sales 07/24/08 [Last modified: Monday, July 28, 2008 4:43pm]

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