Cheap Foreclosed Properties Spurred Home Sales Growth

Foreclosed properties are still major fixtures in the housing market in Florida. But last month, they helped in pushing sales of single family homes in the Jacksonville metropolitan area to the highest figures since June 2007.

Last month, sales of single family homes rose by 16 percent to 1,180, compared with 1,013 for the same month a year ago, and 18 percent higher from May 1,002. Industry experts said that about 1,622 purchase agreements were signed last month, up by 42 percent compared with the same month last year.

They attributed the sales increase to the volume of cheap foreclosed properties, low mortgage rates and the $8,000 federal tax credit given to eligible first-time homebuyers. They added that pending home sales are significant indicator of future sales increases.

However, foreclosure homes or short sales accounted for a large share in home sales, pushing the median home sale price in Jacksonville below $200,000.

Last month’s median home sale price was $162,100, representing a decline of 18 percent from the $197,000 in June last year. Since September last year, the median sale price in Jacksonville range from $146,000 to $173,000.

Industry experts said that low-priced short sales and distressed properties are great deals because they push up sales in the area, adding that buyers can purchase houses for less than the amount paid for five years ago.

They also said that relocation, which is the trend during summer, could have contributed to sales increases in the area. Furthermore, the federal tax credit for first-time homebuyers under the stimulus plan of the Obama Administration has helped fuel sales increases.

Another positive note pointed out by Northeast Florida Builders Association was the increase in housing starts last month which was the highest since the 300 posted in September 2008.

Statewide, sales of existing homes increased for 10 succeeding months. Year-to-year sales rose by 28 percent to 15,850 compared with the 12,339 total properties sold June of last year. Jacksonville ranked fourth statewide in total home sales, following Orlando, St. Petersburg and Fort Myers.

However, the almost 1,000 increase in the number of notices of foreclosed properties filed last month, totaling 3,460, prompted industry experts to say that the housing market in Jacksonville metropolitan area is far from a full recovery.

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