Tampa Bay Area Home Sales Soar 23%

Sales of existing homes soared 23 percent locally as bargain hunters snatched up distressed properties and continued to keep home prices lower.

In the Tampa, St. Petersburg, Clearwater metro area, 1,856 existing, single-family homes changed hands in February, a 23 percent jump from a year ago. The median sale price, however, fell 27 percent to $131,400; it was $178,900 this time last year, according to the Florida Association of Realtors.

The sale price did edge up at bit from January's median price of $122,400. Experts think this is because some lenders slashed prices of foreclosed homes to get them off their books before the new year.

"The median price of an existing home has now round-tripped all the way back to September 2002 levels," said Mike Larson, a housing analyst with Weiss Research. "We have a lot of upside down homeowners in this country, and their ranks are swelling every day. "

Sales were up 20 percent statewide, and the median sales price dropped 29 percent to $141,900.
Nationally, sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January, according to the National Association of Realtors. It was the largest sales jump since July 2003.

The median sales price plunged to $165,400, down 15.5 percent from $195,800 a year earlier. That was the second-largest drop on record.

Buyers can afford more home now than they could during the housing boom. And the $8,000 tax credit for new home buyers in luring many off the fence. The credit was included in the economic stimulus package signed by President Barack Obama last and is expected to give an even bigger boost to some home sales this summer.

Buyers took out even riskier loans during the housing boom, then maxed out their home equity lines. Things are different now.

"Homebuyers are not over stretching" said Lawrence Yun, the Realtors' chief economist. "They want to stay within their budget."

The lower prices are needed to work off the inventory of unsold homes, but there's also a downside, Larson said.

As the prices continue to fall, more homeowners are finding they owe more on their mortgages than their homes are worth. This is tempting many to stop making payments.

"We'll have to see if recent government efforts to modify more loans and expand the ranks of those who can refinance will encourage homeowners to stick things out, rather than walk away, mail their keys to the lender, and rent elsewhere," Larson said.