The expiration of home buyer tax credits took a heavy toll in July, triggering a double-digit drop in Florida home sales and the biggest one-month drop nationally since record-keeping began in 1968.
The National Association of Realtors said sales of previously occupied homes across the country plunged 27 percent between June and July to an annual rate of 3.83 million. That's far worse than the 4.7 million estimate from economists polled by Thomson Reuters.
The story line was similar in Florida. Statewide, home sales were down 25 percent between June and July and down 14 percent compared to a year ago. In the Tampa Bay area, only 2,283 homes changed hands, a 29 percent plunge over one month and 19 percent lower than year-ago levels.
Sales prices also turned south year over the year, falling 9 percent to a median price of $130,500 in the bay area and dropping 7 percent statewide to $138,000.
Jennifer H. Lee, senior economist for BMO Capital Markets, called the numbers "truly gut-wrenching."
The downturn nationally was widespread — sales were down 50 percent from June to July in New York, down 35 percent in Ohio. That's disturbing news for a state like Florida that relies in part on the flow of Midwestern and East Coast retirees who traditionally have been able to sell their homes and use the tidy profit to move south. In the near term, those profits are expected to diminish further. Even before the July drop in sales, analysts were expecting national home prices to fall another 5 or 10 percent this winter.
Sean Snaith, director for the University of Central Florida's Institute for Economic Competitiveness, said the loss of the federal tax credit for home buyers "added a double dip to what has already been a harrowing ride in the Florida housing market."
The tax credit of up to $8,000 for first-time buyers and $6,000 for repeat buyers expired in April and buyers had until June 30 to close. Realtors had been bracing for a pullback since then, but they hoped that record low mortgage interest rates and bargain prices would help prop up sales.
Craig Beggins, owner of Century 21 Beggins Enterprises in Apollo Beach, didn't need to hear the latest statistics to know that scenario didn't happen. He had his own internal data: more than 200 sales in the last month of the home buyer tax credit and a pace of 120 to 130 sales a month after.
"The tax credit took everybody that was going to buy and forced them to buy early," he said. "You took June buyers and moved them into April. You robbed Peter to pay Paul."
With fall marking the start of the slow selling season, Beggins expects sales in the 80- to 100-a-month range for the next four months.
"I'd like to tell you it's going to be great," he said, "but it's not."
The latest numbers were a sharp reversal from June, when Florida home sales were still trending up strongly, up 15 percent over the year and nearly 8 percent from May. That was attributed in part to the closing of sales that were struck when the tax credit was still available.
With a stream of foreclosures continuing to depress prices and double-digit unemployment hampering people from relocating, economists are predicting several months of sluggish sales ahead.
"The combination of high inventories, increasing distressed transactions and declining home sales means prices should turn down again in coming months," Wells Fargo senior economist Mark Vitner wrote in a report Tuesday. "Home building will be restrained even further, making it a bigger drag on economic growth."
Lawrence Yun, chief economist with the National Association of Realtors, said home sales could pick up later this year "provided the job market continues to improve."
The Florida Realtors association took heart that condominium sales were improving, with activity up 11 percent compared to a year ago. However, the median condo sales price last month was $87,200, down 20 percent from the year-ago level of $108,500.
Beggins, who has watched home prices tumble 46 percent statewide since 2006, says recovery is already long overdue.
"It's brutal," he said. "I'm so tired. It's been four years now."
Times wires contributed to this report.