Existing Home Sales Rise 23%

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

That's the largest jump since September, when sales rose 29 percent.

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 sales price, however, fell 27 percent to $131,400; it was $178,900 this time last year, according to the Florida Association of Realtors.

The sales price did edge up a 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."

"Upside-down" means they owe more than the house is worth.

Sales were up 20 percent statewide, and the median sales price in Florida dropped 29 percent to $141,900.

Nationally, sales of existing homes grew 5.1 percent to an annual rate of 4.72 million in February, up from 4.49 million units in January, according to the National Association of Realtors. It was the largest increase since July 2003.

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

The $8,000 new homebuyer credit that was included in the federal economic stimulus package is expected to give an even bigger boost to home sales this summer.

Lower prices are needed to work off the inventory of unsold homes, but there's a downside, Larson said. As prices continue to fall, more homeowners are finding themselves upside-down. 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.