Foreclosed
Home Volume Boosts Property Sales in the South
By Joseph B.
Smith
Southern states experienced a surge in its home sales activity
last month because of large volumes of foreclosed home, low interest
rates, affordable prices and first-time homebuyers who took advantage of
the $8,000 federal tax credit.
Last month's home sales increase was the first sign of market growth
for over three years, according to industry experts. For the given month,
home sales rose by 0.5 percent after consecutive drop of 8 percent or
higher since January. Experts said that the last time the region
experience a year-to-year increase in sales was March 2006.
The 14 states in the region saw their median sales prices drop by 12
percent to $163,200 in June compared to the same time in 2008. Experts
said that sales of foreclosed home pushed down property prices and
attracted buyers, thus increasing demand especially from first-time
homebuyers who are eligible for $8,000 federal tax credit if they purchase
properties before November 30.
University of Georgia's economic forecasting director Jeff Humphreys
said that sales activity in the region seems to have hit bottom despite
negative factors such as the large inventory of foreclosed home and
concerns over the growing unemployment rate.
He explained that hitting the bottom does not indicate a market
recovery but a flat sales activity for a long period of time.
Meanwhile, home resales nationwide rose by nearly 4 percent in June
compared with the same month a year ago. Home resales in June was the
third consecutive month of increase, which is taken as the start of the
housing market recovery.
However, the median home sales price across the country dropped to
$181,800 or 15 percent. Industry experts anticipate that prices will
continue to be under pressure until next year.
Year-to-year home sales activity declined in 13 metro areas in the
Southern region. On a positive note, six metro areas posted sales increase
last month, compared with the same month in 2008. Posting positive home
sales for five consecutive months were Washington D.C., Baltimore in
Maryland, Tulsa in Oklahoma and Florida cities of Orlando, Miami and
Tampa.
Meanwhile, median prices of existing houses dropped in 14 areas,
including Miami which fell 42 percent. This factor, together with tax
incentives, large foreclosed home inventory and affordable prices are
motivating first-time buyers to choose homeownership over renting.
Joseph B. Smith has been educating buyers on the finer points of
Foreclosed Home at
ForeclosureListingsNationWide.com for over five years.
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