Home sales rising; prices diving

DAYTONA BEACH -- Federal tax credits, low mortgage rates and declining prices pushed sales of existing houses in October up 52 percent in Volusia and Flagler counties.

The positive momentum gained so far this year is expected to slow over the winter months, but pick back up after the first of the year with the help of an extended and expanded federal tax credit program. However, there is fear of a renewed foreclosure wave pushing median sales prices further down.

Realtors resold 729 houses in October, compared to 480 in October 2008, according to a Florida Association of Realtors report issued Monday. It is the third time this year and third time in the past four months single-family home sales topped 700 in the two-county area.

Much of the credit is given to the rush of buyers trying to qualify for the federal first time homebuyer tax credit of up to $8,000 that was to expire at the end of November.

"It brought a lot of buyers down off the fence. We were just going crazy in September and October," said Jean Armstrong, of Century 21 Armstrong Team and head of the West Volusia Association of Realtors.

Despite increased demand, the median sales price -- when half sell for more and half sell for less -- for a single family home dipped 21 percent to $124,400 in October from $157,400 a year ago. It also is the lowest median sales price so far in 2009 and the lowest since it hit $114,500 in February 2003 and peaked at $233,500 in December 2005.

Statewide results mimic local trends with all 19 metro areas posting sale increases.

Home sales rose 45 percent from 10,444 a year ago to 15,150 in October. The median sale price fell 17 percent to $140,300 from $169,700. October was the 14th consecutive month of sales increases in year to year comparisons.

Condo sales statewide increased 82 percent from 2,958 to 5,398. The median sale price fell 29 percent from $147,900 to $105,200.

Across the nation, October home sales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million from an adjusted 5.54 million rate in September. It was the biggest monthly adjustment in 10 years and the highest rate since February 2007, according to the National Association of Realtors.

The national median sales price for a single-family home was $173,100, down 7.1 percent from a year ago.

"We're getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal steady price growth," said Lawrence Yun, the national association's chief economist.

More buyers could be brought into the market since the federal first time homebuyer tax credit program was extended until April 30. It was expanded to include up to a $6,500 tax credit for persons moving from a home they have owned for at least five of the past eight years into a different principal residence.

"That is the best thing in the world that could have possibly happened," Armstrong said. "We have plenty of inventory. The issue has been getting buyers to buy. This is a wonderful incentive."

However, the possibility of higher mortgage interest rates, continued high unemployment and more foreclosures could dampen any expected housing rebound.

bob.koslow@news-jrnl.com

-- Information from the Associated Press was used in this report.

Click here to view the story and any reader comments.

MORE FROM NEWS-JOURNAL ONLINE.COM

News-Journal Online.com Section Front

Cops offer day to give up   From China, with dollars?   Fire destroys beachside shop   Ex-deputy not guilty in chase   Home sales rising; prices diving News-Journal Online.com Section Front   Add News-Journal Online.com headlines to your news reader: