AP Real Estate Writer
MIAMI (AP) — First-time buyers and investors snapped up low-priced properties last month, but their added interest was not enough to boost sales of previously owned homes in the South, the National Association of Realtors said Wednesday.
April's slide was significant because it follows an 8 percent annual drop in March. Low mortgage rates and the economic stimulus package have not been enough to offset job losses and other economic worries.
Meanwhile, discounted foreclosures sales kept pushing down prices in much of the South, where the median sales price slid almost 13 percent to $148,000, the Realtors group said. Nationally, April sales of existing homes declined 4.6 percent year-over-year, without adjusting for seasonal factors, while median sales prices fell more than 15 percent to $170,200.
Lawrence Yun, the Realtors' group chief economist, said most of the sales were lower-priced homes, the entry point for first-time buyers. Rookies made up about 40 percent of the national market, lured by low mortgage rates and an $8,000 tax credit for first-time buyers that's set to expire Nov. 30.
Still, "high-end home sales remain sluggish" because it is more difficult to get financing, Yun said. Also, the amount of existing homes available for sale rose almost 9 percent from March, representing a 10-month supply at the current sales pace.
April sales increased from last year in just four of 20 the Southern metro areas covered by The Associated Press-Re/Max Housing Report — Washington D.C. and the Florida cities of Miami, Orlando and Tampa. Transactions have increased for three straight months in the four cities, and the market likely has hit bottom in terms of sales there.
Of the 20 cities, median sales prices fell in all but two of them — Tulsa, Okla., and Little Rock, Ark., the AP-Re/Max report showed.
The AP-Re/Max report, released Wednesday, analyzes all home sales recorded by all real estate agents, regardless of company affiliation, in the metropolitan statistical areas.
Throughout the South, low prices mean good deals for buyers and a strategy change for sellers.
"A lot of sellers who weren't absolutely forced to sell have finally come to the realization that prices are indeed down and have brought their prices down to Earth," said Bill Weaver, real estate professor at the University of Central Florida. "Reality is beginning to seep in."
Meanwhile, cash-carrying investors have begun snapping up Florida properties with the goal of renting them out, Weaver said. These investors are different from the wave of speculators who used subprime mortgages to buy homes during the housing boom with the goal of reselling them for a quick profit.
"Many investors are beginning to realize there's some serious bargains out there," Weaver said. "There's a huge amount of small-investor capital waiting for the right time and place."
In Miami, April sales increased an eye-popping 56 percent compared with the same month last year, and median sales prices fell by 46 percent to $150,000, the AP-Re/Max report showed.
Affordability is what brought Rogelio Gonzalez, 44, back into the Miami market. Gonzalez sold his five-bedroom home in 2004 for $485,000 — he's been renting ever since. Now, prices have dropped to the point where he wants to buy a foreclosure in the $150,000 range.
He's finding plenty of competition.
"Since I sold at the highest point, I was waiting until I could buy at the lowest point," Gonzalez said. "I've been to open houses and I've run into eight, 10, 15 people looking for houses."
In the sprawling Texas metro area of Dallas-Fort Worth, April sales dropped 29 percent year-over-year, while median sales prices fell a modest 5 percent to $142,000, the AP-Re/Max report showed.
Dallas-based real estate broker Cody Farris said about 35 percent of the area's sales have been distressed properties, compared with 45 percent nationally, because the local job market remains healthy.
"The Dallas housing market has been the tortoise in the housing race," said Farris, a vice president of Prudential Texas Properties. "We never had that run up in values."
Randy Griggs sold his Dallas-area home for $470,000 and has signed a contract to buy a brand new four-bedroom house in the Nashville area for $520,000. Needing to move for his job at Ford Motor Credit, Griggs had his home up for sale for 21 days in Dallas and showed it about 35 times.
As he toured the Nashville suburbs, Griggs visited seven neighborhoods of new houses, but each community had only one or two homes for sale. His house is about three-quarters built and he plans to move in in July, if all goes smoothly.
Griggs said the builder lowered the price by $79,000.
"There wouldn't have been such a rush to negotiate the price with me if there was a ton of buyers running through the builder's doors," said Griggs, 44.
Nashville's existing home sales fell 26 percent compared with last April, and median sales prices dropped nearly 9 percent to $160,000, the AP-Re/Max report showed.
In the Baltimore metro area, sales of existing homes fell 20 percent compared with last April, while median sales prices dropped 10 percent to $235,000, the AP-Re/Max report showed.
But, in a sign that real estate is local, the overall numbers may not reflect increased interest in the downtown area, where real estate agent Steven Murphy works. Murphy said about 90 percent of his clients this year have been first-timers and properties costing $350,000 or below are hot.
Murphy, of Prudential Carruthers Realtors in Baltimore, said he would expect activity to be strong among first-time buyers as long as the tax credit is available
He said, "Activity this year has been remarkable because of the stimulus package."
Copyright 2009 The Associated Press.