Real Estate Prices Tumble

Published by peter | Filed under Market Trends

The bargain prices helped rekindle buyer interest in January, at least locally. Sales climbed 17 percent for the year, from 1,342 in January 2008 to 1,573 in January 2009, according to the Florida Association of Realtors.

In the Tampa Bay area, prices have come down almost 50 percent from the peak in June 2006. About 3,442 homes sold that month locally.

The National Association of Realtors reported that 45 percent of sales across the nation in January involved distressed properties. The amount varied from 80 percent in Santa Ana, Calif., to below 20 percent in Chicago.

Nationally, existing home sales dropped 7.6 percent from January last year, while the U.S. median home price slid almost 15 percent to $170,300.

“Buyers will continue to have an edge over sellers for the foreseeable future,” Realtors’ chief economist Lawrence Yun said.

Though fear of recession and joblessness is playing on consumer confidence, the housing market’s recently gotten several adrenalin shots.

Last’s week’s economic stimulus plan included a new $8,000 tax credit for first-time home buyers who purchase between Jan. 1, 2009 and Dec. 1, 2009. The government defines a first-time home buyer as someone who hasn’t owned a principal residence in the previous three years. Unlike last year’s $7,500 tax credit, the $8,000 credit doesn’t have to be paid back.

Another attraction for buyers: Mortgage rates hover around 5.2 percent, among the lowest in decades.  (Sources: Florida Realtors Association, NRA, SPT.)