Home resales skyrocket in South

Published 5:59 pm Tuesday, December 22, 2009

MIAMI (AP) — Home resales in the South skyrocketed last month as first-time buyers hurried to grab an expiring federal tax credit while exploiting low prices and mortgage rates.

The South recorded 176,000 home sales in November, the National Association of Realtors said Tuesday, up 48 percent from a year earlier when the nation was dizzied by the financial market meltdown. The median sales price fell slightly more than 1 percent, to $151,400.

Nationally, existing home sales soared nearly 47 percent compared with last November, without adjusting for seasonal factors. The median sales price dropped 4 percent to $172,600.

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Half of the national sales went to first-time homebuyers using a tax credit of up to $8,000 that was set to expire last month. Congress extended the credit until next spring and also added a tax credit of up to $6,500 for repeat homebuyers.

The first-time homebuyer tax credit, along with mortgage rates below 5 percent, lured more buyers than during previous holiday seasons, real estate agents said.

“Remember that a year ago the months of October, November and December were pretty much the worst quarter in the history of real estate — and not just for San Antonio,” said Bob Leonard, a broker with Re/Max San Antonio.

“At least in the case of housing, the consumer confidence level is coming back,” Leonard said.

All 19 Southern cities covered by the Associated Press-Re/Max Monthly Housing Report showed sales increases compared with last November. Median sales prices were flat or increased in 11 Southern cities.

The AP-Re/Max report, also released Tuesday, analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Here are some highlights:

— Orlando, Fla.: This tourist mecca experienced two extreme swings in November. Sales doubled from last November, the biggest gain among Southern cities in the AP-Re/Max report. (Jackson, Miss., had the smallest sales gain at 15 percent.)

Meanwhile, the Orlando median sales price dropped by a quarter to $123,250, the steepest price decline among Southern metro areas in the AP-Re/Max report.

Homes priced $200,000 and below sold quickest in November, fueled by first-time buyers and investors, said Les Simmonds, president of L.G. Simmonds Real Estate Corp. in Orlando.

“If you have something in the low price range, your telephone will ring,” Simmonds said.

Still, prices could keep sinking because of consistently heavy foreclosure inventories, which have driven down property values in Orlando as well as in Miami and Tampa.

“That’s the kicker: It’s almost like you feel you are getting somewhere, then there’s always something to hold you back,” Simmonds said.

— Miami: This sunny metropolis saw the median sales price decline 23 percent to $152,000, but affordable prices for houses and condos helped spur a 59 percent sales increase from last November, the AP-Re/Max report showed.

Foreign investors and buyers looking for bargain foreclosures boosted sales for Ralph De Martino, owner of Ocean International Realty in Miami Beach. De Martino has presided over six deals since the start of November.

“Business has been pretty good — very good, actually,” De Martino said.

— Houston: With its steady oil- and health-care-based economy and solid employment base, Houston proved to be a strong market in November.

Sales of existing homes jumped 34 percent, while prices rose nearly 9 percent to $150,000 — the largest price increase among Southern cities in the AP-Re/Max report.

One hot area is central Houston, known as “inside the loop” because it’s encircled by expressways. There, nicer homes rarely sell for under $300,000, and the few properties listed below that price last just a few days on the market, said Tim Surratt, an agent with Greenwood King Properties in Houston.

“We’re extraordinarily busy days before Christmas,” Surratt said. “The window to purchase, where the prices are right and the interest rate is right, is closing.”

Michael Bradford has already jumped through that window. Bradford looked at about 20 houses after relocating from San Francisco to work for a Houston-based energy company.

He bought a three-bedroom, 2,300-square foot home for $405,000. He paid $6,000 above the list price after competing with other buyers for the home located inside the loop.

Bradford was surprised to see sellers refusing to budge on prices during his search.

“When I was dealing with sellers who had an irrational emotional attachment to the home, it really compromised the integrity of the process because they were not willing to understand what the market would bear,” said Bradford.

— Washington: Inventory in and around the nation’s capital dropped 40 percent compared with last November — the steepest rate among Southern cities in the AP-Re/Max report.

Industry experts say a decline in inventory is key to a sustainable housing recovery.

Existing home sales in Washington rose 36 percent from last November, while the median sales price inched up 1 percent to $286,000, the AP-Re/Max report showed.

In the “close-in” areas of Washington — which includes areas just outside the city such as Montgomery County, Md., and Fairfax County, Va. — the dollar volume of home sales surged 64 percent over last November, said Donna Evers, president of Evers & Co. Real Estate in Washington.