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Bay Area Sees Worst Home Price Drop In U.S.

Tribune photo by ROBERT BURKE

Some Tampa Bay area home sellers are taking things into their own hands. This seller is offering a break on the price and interest rate.

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By SHANNON BEHNKEN, The Tampa Tribune

Published: November 28, 2007

TAMPA - Bay area home prices skyrocketed nearly 140 percent during the housing boom. Now, a report shows the area leading the nation in falling prices.

The Tampa metro area posted the largest yearlong decrease in home prices in September among 20 cities tracked by Standard & Poor's Case Shiller Home Price Index. Prices dropped 11.1 percent, compared with the same month last year, according to the index, released Tuesday.

Miami, the only other Florida city tracked, ranked second with a 10 percent drop. San Diego, Detroit and Las Vegas rounded out the five cities with the steepest drops.

"The cities with the biggest run-up in home prices are seeing the largest declines," said David Blitzer, chairman of the index committee for S&P. "Tampa saw prices go way up."

Since 2000, Tampa had the fifth largest increase in prices before the market cooled in 2006, according to information in the index. Tampa ranks second for falling prices since the peak of prices in 2005. Miami came in third.

The index tracks individual homes through repeat sales and takes a weighted average of the sales price differences for those homes. Some economists think the index more accurately reflects price trends than the median prices reported by the national and state associations of Realtors.

The index does not include actual home prices, but the Florida Association of Realtors data show the median sales price of homes in the Tampa-St. Petersburg-Clearwater area was $200,700 in September, down 10 percent from last year and down 16 percent from the market price peak in August 2006, when the median price of a home was $237,800.

The association is expected to release October numbers this week, and some analysts say the median sales price in Tampa Bay could drop below $200,000 for the first time since in May 2005, when the Realtors group reported a median sales price of $196,100.

Compare that with $122,100 in September 2000.

Mike Larson, with Weiss Research in Jupiter, also thinks prices in Tampa will fall further.

"I wouldn't be surprised to see 5 to 10 percent more of a drop in Tampa before this gets better," Larson said. "It's unfortunate, but this is what we're dealing with."

That sounds like a big drop for homeowners who bought in the past year or two. Because of the rapid increases since 2000, though, some longer-term homeowners still have large amounts of equity.

"It's the people who bought at the peak of the market who are in trouble," Larson said.

Five of the 20 cities tracked showed increases in price, but even those cities are seeing deceleration in home price growth, Blitzer said.

Those cities with increases were Seattle and Charlotte, N.C., at 4.7 percent each, Portland, Ore., at 2.2 percent, Atlanta at 0.4 percent and Dallas at 0.2 percent.

DROPS

1. Tampa

(-11.1 percent)

2. Miami

(-10 percent)

3. San Diego (-9.6 percent)

4. Detroit

(-9.6 percent)

5. Las Vegas (-9 percent)

INCREASES

1. Seattle

(4.7 percent)

2. Charlotte

(4.7 percent)

3. Portland

(2.2 percent)

4. Atlanta

(0.4 percent)

5. Dallas

(0.2 percent)

Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.

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