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Tampa Bay homes sales rise 21 percent for June, but foreclosures cutting into prices

Tampa Bay area home sales rose 21 percent in June compared with a year earlier, but at least one Tampa Bay area housing analyst complained that banks are harming the housing market by unfairly dumping foreclosure homes.

The Florida Association of Realtors said sales improved to 2,848 in June from 2,346 in June 2008. That continues a trend of rising sales that started last September. The peak for June home sales was 5,230 in 2005.

Local home prices have been holding more or less steady since they bottomed out at $121,000 in January but still are down 22 percent from a year earlier. June's median sales price was $139,400.

Prices would be higher were it not for banks pouring cheap foreclosure homes onto the market at about half price, said Peter Murphy, president of Tampa's Home Encounter.

Home Encounter said distressed sales — both foreclosures and preforeclosures — constituted 37 percent of sales in June.

Murphy accused banks of prolonging the housing slump. He said the federal bank bailout perversely encouraged banks to sell homes at any price because the government is covering their losses.

"Lenders — not homeowners — have become the most powerful force in the U.S. housing market," Murphy said. "Yet rather than learning a lesson from the housing boom and acting in a responsible fashion, lenders are now selling homes at prices so low that they're single-handedly leading the decline in home values in Tampa Bay."

Nevertheless, the sheer volume of cut-rate distressed properties is driving the sales turnaround. Realtors also cited the $8,000 first-time home buyer federal tax credit that expires at the end of the year.

Tampa-St. Petersburg-Clearwater isn't alone. Home sales gained in all of Florida's 19 major markets except Gainesville, Sarasota-Bradenton and Tallahassee. Improvements were concentrated in hard-hit housing markets like Cape Coral-Fort Myers, where the average home changes hands for less than $88,000.

The cheapness of many homes is causing problems in some quarters. Lawrence Yun, chief economist for the National Association of Realtors, said poor appraisals tied to distressed property sales are killing deals.

"Poor appraisals are stalling transactions," Yun said. "The big question is how much the appraisal issue will impact the ability of contracts to go to closing."

June existing home sales

Region Sales Change from June 2008
Tampa Bay 2,848 m 21.4 percent
Florida 15,850 m 28.5 percent

June median home prices

Region Prices Change from June 2008
Tampa Bay $139,400 n 22 percent
Florida $148,000 n 27.9 percent

Sources: Florida Association of Realtors

Tampa Bay homes sales rise 21 percent for June, but foreclosures cutting into prices 07/23/09 [Last modified: Friday, July 24, 2009 8:33am]
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