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Home Prices Slip Sliding Away

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The Tampa Tribune

Published: December 31, 2007

Updated: 12/30/2007 11:56 pm

The Tampa Bay area's once red-hot real estate market continued to cool this year, even exceeding some economists' gloomiest predictions. During the housing boom, Bay area home prices skyrocketed nearly 140 percent, with the average home price peaking at $237,800 in August 2006. They held steady during most of 2006, when prices were falling in other parts of the country.

But the Bay area's real estate market was thrust into the national spotlight in 2007 when the Tampa metro area posted an 11.1 percent yearlong decrease in home prices during September - the worst in the nation.

In October, the most recent month for which data were available, the median price for existing, single-family homes fell to $222,100, an 8 percent drop from October 2006.

Florida's real estate market woes can be tied, in part, to the meltdown in the subprime mortgage industry.

During the boom years, subprime mortgages and exotic loans fueled a buying spree and enabled consumers to buy homes they ordinarily couldn't afford. The terms of many of those loans adjusted, bumping up payments beyond what many homeowners could manage.

Foreclosure filings skyrocketed, turning some subdivisions into ghost towns.

Florida's foreclosure rate rose to the second highest in the nation in September. The number of foreclosure filings in Hillsborough, Pasco and Pinellas counties has increased more than 130 percent since last year.

Economists predict more pain for the housing market in 2008 but say they expect the start of a recovery, too. Home prices in the Bay area may fall as much as 10 percent more, but that is needed to stabilize the market, economists say.

Shannon Behnken

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