After three years of slipping and sliding, Tampa Bay area home prices finally found some traction in June, suggesting the worst of the housing bust may be over.
The S&P Case-Shiller home price index reported prices rose locally 0.4 percent from May to June. The annual numbers are still lousy. From June 2008 to June 2009, Tampa Bay home values are down 19.5 percent.
But in a housing market where close to 40 percent of sales involved foreclosure and preforeclosure properties, home appreciation has been an alien concept since summer 2006.
Craig Beggins, a real estate broker who specializes in Hillsborough County's Apollo Beach area, said his business closed 190 home sales in June. Prices didn't rise measurably, Beggins said, but they stabilized.
"We're selling the hell out of several neighborhoods," Beggins said, citing places such as ritzy waterfront MiraBay and middle-income Covington Park. "We're paying our bills."
The home price improvement occurred across nearly the whole Case-Shiller index, which takes in 20 large cities. In fact, Tampa was a laggard: The national home price improvement from May to June was 1.4 percent, vs. the 0.4 percent in Tampa.
Las Vegas and Detroit were the only cities where prices fell from May to June.
The convergence of several factors account for the recent price stabilization, economists say. Mortgage interest rates remain below 5.5 percent for credit-worthy buyers. The $8,000 first-time home buyer tax credit is up and running and scheduled to expire Dec. 1. Foreclosures, which could swallow more than a million homes in the United States this year, have pushed home prices below replacement costs in some areas.
"For the second month in a row, we're seeing some positive signs," said David M. Blitzer, chairman of the index committee at Standard & Poor's. "There are hints of an upward turn from a bottom. However, some of the hardest-hit cities, especially in the Sun Belt, show continued weakness."
The Case-Shiller index gets brownie points for accuracy since it compares repeat sales of individual homes. Tampa Bay Realtors keep their own highly quoted home price statistics. They registered a small price decline from May to June, from $141,100 to $139,400.
In Tampa Bay, prices have been, with minor variations, largely stagnant since February and March. Most Florida economists don't expect real estate to appreciate steadily until 2011. And based on the number of foreclosures entering the market, they expect the recovery to be "L-shaped," meaning prices will crawl along the bottom for a year or more.
"We're probably close to the bottom, but we're not there just yet," said Mark Vitner, an economist who specializes in Florida for Wells Fargo bank. "My hunch is that prices will remain at these levels for the next couple of years."
Vitner's biggest concern is mortgage defaults. More than half of Tampa Bay residential mortgages are underwater, meaning homeowners owe more than their houses are worth. While only a small percentage of these homes will enter foreclosure, we're still not out of the woods, Vitner said. "There's still an awful lot of troubled loans out there.''
James Thorner may be reached at firstname.lastname@example.org or (813) 226-3313.