TAMPA - The federal homebuyer tax credit is over and, boy, does it show. Both locally and nationally, July was a month of reckoning.
Tampa-St. Petersburg-Clearwater saw sales plummet a whopping 19 percent from the same month last year, according to the Florida Realtors group.
That comes after a 13 percent increase in June. Nationally, sales fell 27 percent - to the lowest level in 15 years.
"We're starting to see what the housing market looks like in a post-tax credit world," said Chris Lafakis, an economist who follows Florida and the Tampa Bay area for Moody's Economy.com. "This report shows that tax credit demand was propping up the market a lot more than we thought."
There were 2,283 homes sold in July in the Tampa-St. Petersburg-Clearwater area, compared with 2,822 last year. The median sale price was $130,500, down 9 percent from $143,100 in July 2009.
Locally, sales of existing homes haven't dropped this much since February 2008, when sales fell 29 percent. Sales in the Tampa-St. Petersburg-Clearwater area haven't dipped since May 2009, when sales slid a modest 1 percent.
The credit - up to $8,000 for first-time buyers and $6,000 for repeat buyers - expired in April. That, combined with rising unemployment, is putting a damper on demand.
"We knew things were going to slow down after the tax credit," said Vernon Taylor, president of the Greater Tampa Association of Realtors. "July is historically low in Tampa for real estate, and unemployment is up. It's all working against us."
Economists worry it could get worse over the next several months because the July data still reflect some of the boost given by the credit. Those taking advantage of the tax credit have until the end of September to close deals.
Florida as a whole saw sales drop, although not as much as in the Bay area. Sales in the Sunshine State fell 14 percent to 13,589 sales. The median sale price was $138,000, down 7 percent from $147,600 during the same month last year.
Nationally, sales fared even worse. The National Association of Realtors said July sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million.
Lafakis, from Moody's, said he expects prices to continue to decline because of increasing foreclosures. Despite the federal government's push to stop foreclosures, homeowners continue to lose their homes.
Trial mortgages have fallen by 23 percent since the peak in February, Lafakis said.
"Some of those modifications have failed," he said.
Sale prices have fallen 42 percent since they peaked in mid-2006. Moody's calls for Bay area prices to drop an additional 9.3 percent through the third quarter of 2011.
Reporter Shannon Behnken can be reached at (813) 259-7804.
SOURCE: Tampa Bay Online, TBO.com
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