Affordability Leads to Home Sales Spike in South

The last time the South saw such a marked increase in resales was September 2005. Affordable prices made home buying attractive, as did low mortgage rates. Also, first-time buyers rushed to grab a tax credit that expires in November.

And, while foreclosures are expected to be an obstacle into next year, they are making up a smaller percentage of sales in several markets.

In the South, the median sales price of resold homes fell 7 percent to $164,500 -- not exactly a reason to party. But prices have been steadily climbing since January, when the median was $143,300.

Nationally, July sales of existing homes also rose 5.6 percent compared to the same month last year. Median sales prices fell 15 percent to $178,400.

Continuing a months-long trend, home sales once again rose on an annual basis in Washington D.C. and the Florida metro areas of Miami, Orlando and Tampa, according to The Associated Press-Re/Max Housing Report released Friday.

But in July, other markets joined in, with cities such as Little Rock, Ark., and San Antonio, Texas, posting sales increases. In all, eight of the 19 metro areas covered by the AP-Re/Max report showed year-over-year sales gains.

Meanwhile, prices were flat or up in seven Southern cities, with Little Rock leading the way with a 3 percent jump to $144,000, according to the AP-Re/Max report. Miami, by contrast, had a 44 percent decrease to $150,100.

The report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Lawrence Yun, chief economist for the Realtors group, described the Orlando market as recovering. In that central Florida city, ''demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,'' Yun said.

Sales in Orlando rose an eye-popping 64 percent compared with July 2008, with prices dipping 36 percent to $130,000, the AP-Re/Max report showed.

''Assuming that interest rates stay low and that builders don't flood the market with product as things improve, then we're on the road to recovery,'' said Steve Moreira, chief executive of Magic Property and Investments. link.....