Tampa Bay home sales had their best October in four years as buyers scooped up distressed properties using the $8,000 first-time home buyer tax credit.
Realtor sales in Pinellas, Pasco, Hillsborough and Hernando counties totaled 2,758 in October, the month's highest number of closings since 3,735 homes changed hands in October 2005.
The rise wasn't restricted to Tampa Bay. All 19 Florida metro areas reported year-over-year gains in home sales. Home buyers also turned out in greater numbers nationally.
Apollo Beach real estate broker Craig Beggins had his best month in more than a year: His realty company closed 124 deals worth about $20 million. A quarter of those were short sale homes in which banks approved transactions for less than the mortgage amount.
Typical of the first-time homeowners attracted to the tax credit, a young bartender Beggins befriended landed a 1,400-square-foot townhome near Apollo Beach for $61,000. It was selling for $120,000 just two years earlier, but the bank let the preforeclosure home go at a steep discount.
On top of that, the buyer will get a $6,100 check from the government next year to cover the first-time home buyer tax credit. The credit is 10 percent of a home's purchase price, up to $8,000.
"Her total payment's just $550 a month," Beggins said. "Now she's going to Home Depot to buy drapes and all that stuff. She's stimulating the economy."
The home sales data comes from Florida Realtors, which noted that Tampa Bay home sales rose 36 percent from a year earlier, when closings totaled 2,021. Foreclosure and preforeclosure homes made up close to half of all sales in October. The median home price dropped 10 percent over the year, from $152,300 to $137,500. That's 42 percent lower than it was at the price peak in the summer of 2006.
Across the country, resales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from 5.5 million in September. It was the biggest monthly increase in a decade and far better than what economists expected, according to Thomson Reuters. The median home price nationally was $173,100, down 7 percent since the previous October and 25 percent from the peak.
Low prices, the $8,000 tax credit and favorable interest rates combined to make it a good time for first-time home buyers. But in the Tampa Bay area, cash buyers were rife, too, suggesting it was much more than first-timers driving the market.
"We sold a half-million-dollar place on the beach to a couple from Scotland sight-unseen," said Mike Ward, a manager at Keller Williams Gulf Coast Realty in Seminole. "We just keep plodding through, and it all came to a nice culmination in October. Let's hope it continues."
What's good for home buyers isn't always good for banks. One Beggins cash buyer snagged a townhome originally worth $440,000 for $75,000 last month in the Little Harbor area of Apollo Beach. The payments are so small the investor-owner can profit by renting it out. "If he doesn't want to rent it, he's got a beautiful little resort townhome he can use part of the year," Beggins said.
The government recently extended the tax credit into 2010 and expanded it to non-first-time home buyers. To collect the subsidy, buyers need to sign a purchase contract by April 30 and close the deal by June 30.
Some housing analysts fear the expiration of the credit, combined with high unemployment and soon-to-rise mortgage rates, could postpone a full real estate recovery.
Rising foreclosures could prevent home appreciation next year, though one prominent real estate company, First American CoreLogic, forecasts that Tampa Bay home prices will rise 5.6 percent between September 2009 and September 2010.
"When we do kick those crutches out from under the housing market, will it be able to stand on its own?" said Mark Fleming, chief economist with First American CoreLogic. "It's really hard to tell."
James Thorner can be reached at [email protected] or (813) 226-3313.