Southern States See Sharpest Drop in Home Sales

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MIAMI (AP) -- Existing home sales in Southern states fell more than 10 percent in October compared to the same month a year ago, while the median sales price dropped nearly 6 percent to $161,000, the National Association of Realtors reported Monday.
The slower sales pace in the South is likely the result of reticence on the part of potential homebuyers who are watching the roiled stock market and slowing economy.

MIAMI (AP) -- Existing home sales in Southern states fell more than 10 percent in October compared to the same month a year ago, while the median sales price dropped nearly 6 percent to $161,000, the National Association of Realtors reported Monday.

The slower sales pace in the South is likely the result of reticence on the part of potential homebuyers who are watching the roiled stock market and slowing economy.

Nationally, October sales fell less than 1 percent nationwide - without adjusting for seasonal factors - while the median sales price slid about 11 percent to $183,300, the lowest level since March 2004.

In the South, 17 metro areas posted declining sales compared to the year-ago period, according to the Associated Press-Re/Max Housing Report, also released Monday. The report analyzed all home sales recorded by all real estate agents in those areas, regardless of company affiliation.

Twelve of those cities saw sales volume plummet more than 20 percent, with the North Carolina cities of Charlotte and Raleigh-Durham dropping more than 40 percent.

The news was a little better for median sales prices, with four of 20 metro areas - Jackson, Miss., Huntington, W.Va., Tulsa, Okla. and San Antonio, Texas - seeing median price increases, and another four cities seeing prices drop less than 2 percent.

Once again, three Florida cities, Miami, Orlando and Tampa, had price declines worse than 20 percent. The trend continues to be driven by intense price competition among banks selling foreclosed properties and by short sales, in which the bank agrees to accept a price that is less than the balance owed on the property and forgive the difference.

In Miami, median sales prices in October dropped almost 27 percent to $216,000 on a year-over-year basis, the AP-Re/Max report showed. However, sales were up nearly 40 percent.

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One seller who is facing stiff competition in suburban Miami is Frank Ortiz, 42. He first placed his 2,600-square foot, fully remodeled home on the market in September 2007, then took it off the market seven months later because of a lack of buyer interest.

He listed it for sale again this summer for $389,000, and despite lowering the price $10,000 and holding several open houses over the past few months, he's yet to get a nibble.

"I haven't even gotten a call with interest in the house," said Ortiz, an information technology consultant. "It's not like a dilapidated house or anything. It's a remodeled house. But no bites. It's very frustrating."

His agent, Pam Mayers of Esslinger-Wooten-Maxwell Realtors in Miami, says the house is priced below market value but is facing intense competition from lower-priced foreclosures and short sales.

"It's easy pickings for anybody buying a house right now," Ortiz said. "For sellers it's horrible. People are like vultures, flying around and picking whatever's left."

To the north in Atlanta, agent Ed Neubaum of ZipRealty said foreclosures also are hurting sales prices, which the AP-Re/Max report showed were down nearly 15 percent to $152,000 last month, compared to October 2007. Sales were down almost 26 percent, the AP-Re/Max report showed.

Still, Neubaum said first-time homebuyers have been more active recently. Part of the reason could be the temporary $7,500 tax credit for first-time home buyers currently being offered by the federal government.

First-time buyers typically purchase lower-price properties than buyers who are looking to move into a larger home.

"The move-ups are sitting out," said Neubaum, who specializes in the northern area of Atlanta. "They don't seem to be in the market as much as first-time homebuyers (who) can move more quickly than someone who has a house to sell."

In Memphis, Tenn., October sales were down nearly 25 percent compared to the same month last year, while median sales prices fell almost 19 percent to $103,000, the AP-Re/Max report. However, there is some room for optimism in the blues-and-barbecue city because inventory was down 37 percent on a year-over-year basis.

Further drops in inventory "should help bring us closer to a more balanced market," said John Snyder, president of Memphis Area Association of Realtors.

Meanwhile, the truism that all real estate is local is evident in Baltimore, a city of diverse neighborhoods. The Baltimore metro area had October sales fall 16 percent year-over-year, while median sales prices were down 5 percent to $255,450, the AP-Re/Max report showed.

Sales are down significantly in the downtown waterfront area, where sales prices generally run above $300,000, said Stephanie Bamberger Yungmann, an agent with ZipRealty in Baltimore. That area experienced significant high-end development, profit-chasing investors and inflated prices before the housing market and credit crises sent demand and prices crashing down, she said.

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"It was a very, very steep climb and a very drastic fall. Nothing is really moving unless it's so obviously a great deal" in the downtown area, Bamberger Yungmann said.

However, in other areas of Baltimore, more moderately priced homes - below $250,000 - are attracting interest from first-time buyers who are taking advantage of the tax credit.

"The benefit of the tax credit is that you buy a house that might need as little elbow grease ... and you have some funds to put into the house if you need to," Bamberger Yungmann said.

Accountant Barry Coulby took his time before getting the right house at the right price in the Baltimore area. He watched for more than a year as the price for the 2,500-square-foot renovated farmhouse dropped from $685,000 to $485,000, when he jumped on it and secured a contract.

"What we got it for, it's pretty undervalued," he said.

Coulby also is selling his renovated 1,800-square-foot townhouse for $315,000 - after buying it for $188,500 about five years ago. Coulby said he's not in a hurry to sell, and thus lower his price, because he is comfortable with his current mortgage and does not have to close on his home until mid-January.

His agent, Bamberger Yungmann, advises that sellers should research sales prices of similar homes in their area, pick a reasonable price and stick to it.

"It is not the market to test the waters," Yungmann said. "If your house should be priced at $225,000, this is not the market to try and see if you can get $245,000. The key is finding that sweet spot, where it is priced just right."

Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

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