Foreclosed Home Volume Boosts Property Sales in the South
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.
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.
Source...