Home sales down slightly in South - AP - National Business News

Existing home sales in the South dropped slightly in September compared to the same month a year ago, while the median sales price dropped 4 percent to $167,200, the National Association of Realtors reported Friday.

The region's existing home sales were down just 1.2 percent year-over-year, an improvement over previous months. That's the result of a drop in median sales prices, which, like in other regions of the country, were driven down by foreclosures and distressed sales. Currently, those types of sales comprise 35 to 40 percent of transactions, the NAR said.

Without adjusting for seasonal factors, September sales rose 7.8 percent nationwide, while the median sales price slid 9 percent to $191,600.

In all, 14 metro areas in the South, including hurricane targets Houston and New Orleans, saw sales drop from last September, according to the Associated Press-Re/Max Housing Report, also released Friday. But home sales rose in six southern metro areas, including Washington D.C., Tulsa, Okla., and Miami. The report analyzed home sales recorded by all real estate agents in those areas, regardless of company affiliation.

The news was worse for median sales prices, with just three of 20 metro areas - New Orleans, Houston and Tulsa, Okla. - seeing prices rise or remain flat.

In fact, the real estate market is quietly humming along in Tulsa, where sales were up nearly 8 percent and prices were flat at $127,000 in September, the AP-Re/Max report showed.

With a metro area of more than 850,000 people, Tulsa has low real estate taxes and unemployment, and a good economy boosted by the oil industry, said Doug Horton, president of Northeast Oklahoma Real Estate Services.

Home values have remained steady, and sellers have attracted buyers without making deep cuts in their asking price, Horton said.

"We consider ourselves a little Mecca of United States housing," Horton said. "I don't know of a single marketplace right now that has the total package like Tulsa has."

At the other extreme of the market lie the Florida cities of Miami, Tampa and Orlando. There, the pricing bubble has burst and foreclosures are high, leading to year-over-year drops in prices of 20 percent or more in all three cities.

Throughout the South, potential buyers appear to be waiting to see whether the $700 billion government bailout of the financial industry actually works. Uncertainty in the financial markets may be causing trepidation among buyers, experts said.

"I think everyone in America right now, if they go home and watch the news, they're scared to death," said Hal Tillman, president of the Birmingham (Ala.) Association of Realtors. "I do believe our government, by making more credit available to banks, is going help the housing market."

In Houston, sales suffered due to Hurricane Ike, which delayed deals for weeks while the area recovered from the storm. Sales were down 30 percent, the AP-Re/Max report showed.

"Sales fell off the table for about almost three weeks," said Michael Levitin, chairman of the Houston Association of Realtors. "Now, it's starting to come back up, but with that being said, we are down as opposed to last year's sales. There's just a lot of uncertainty in the country and Houston is no different."

Despite lower sales, Houston's median prices increased about 4 percent year over year to $156,500. Levitin attributes that boost to a healthy, oil industry-driven economy, and the lack of over-speculation during the boom years.

One successful buyer is Lee Poquette, who is buying a 1,600-square foot, two bedroom home. Poquette was in the market for two weeks and saw five houses before finding the $250,000 home, but he carefully researched the housing market for a year before jumping in.

"The caveat is being qualifiable," said Poquette, a 59-year-old minister. "If you are in a price range where you are overreaching yourself, you should not kid yourself. It behooves both the buyer and the seller to be within a comfort zone. There is definitely a buyers' market."

Looking east to Birmingham, Ala., sales were down 6 percent year-over-year, and prices were down 7 percent to $149,900, according to the AP-Re/Max report.

To the south, in Miami, the median sales price plummeted 24 percent to $227,000, but sales were up nearly 14 percent, the AP-Re/Max report showed.

Real estate agent Joel Rodriguez notes that foreclosures and distressed sales are pushing once-inflated prices down, and spurring competition among banks and individual sellers.

Still, dropping prices are making homes more affordable. This is important particularly in Miami, where the U.S. Census reports 29 percent of people with a mortgage spend half of their income or more on housing.

"The reality is that were back to common-sense real estate," said Rodriguez, owner of Global Investments Realty in Miami. "For a while there it didn't make sense. How can you buy a house and make $100,000 on it in six months? Expectations were out of whack."

Meanwhile, in the greater Washington, D.C., metro area, sales skyrocketed 40 percent compared to September 2007, but median sales prices were down about 21 percent to $295,000, the AP-Re/Max report showed.

Donna Evers, broker at Evers & Co. Real Estate, noted that sales were improving "closer in" - near Washington's social and business center, where new condo developments are popping up.

Agent Guy Godat, also of Evers & Co., said competition was fierce among buyers.

"Buyers don't want to throw money at you," Godat said. "But if you offer value, they're there. They're even willing to fight for it."

But it's a different story in Richmond, Va., according to Coldwell Banker agent Wayne Johnson. Buyers are cautious as they track the troubled economy and wait for the Nov. 4 presidential election, he said.

Prices were down 6 percent to $209,675, but sales dropped 24 percent in the metro area, the AP-Re/Max report showed.

"After the election, the public in general will have a better understanding which economic policies are going to be adopted, and that will bring some stability," Johnson said.

Jack Jebo, a Richmond-area attorney, sold his three-bedroom house for $267,000, after lowering his price $18,000. He carried two mortgages for two months before the house was sold.

"In retrospect, (the experience) probably wasn't too bad," said Jebo, 32. "At the time, it probably felt pretty difficult because we didn't get an offer before we lowered the price."