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Foreclosures hold down home prices

By Staff | Jul 24, 2009

Foreclosed homes continued to keep local home prices down in June, and the low prices attracted buyers, pushing up home sales.
The median sale price of an existing single-family home in the Cape Coral-Fort Myers metro area dropped to $87,000, the lowest price among Florida’s metro areas, according to a report released Thursday from the Florida Association of Realtors.
That is down from $88,500 in May and $172,400 in June 2008, a decrease of 49 percent.
Local home sales jumped 137 percent from the previous year with 1,705 homes sold in June, compared to 719 sales in June 2008.
“The good thing is, as quickly as they’re coming in, they’re going out,” Tommy Lee, a Realtor with AA Associates Realty in Cape Coral, said.
But the glut of bargain-priced foreclosed homes flooding the market is acting to keep home prices down.
“As long as the low-end homes keep coming on, the median price isn’t going to go up,” he said.
Lee County’s foreclosure rate remains high, but there are signs the phenomenon is abating.
June marked the third straight month the Lee County Clerk’s Office saw a decrease in the number of foreclosure filings.
There were 1,652 foreclosure filings in June, down from 2,199 in March and nearly 1,000 filings off of the county’s one-month high in October of 2,603.
“It is slowing down some. The trend is downward,” Lee County Clerk of Courts Charlie Green said.
Green’s “rocket docket” is moving foreclosure cases through the system more quickly.
Lee said the faster the foreclosed homes are released into the market and absorbed, the better.
“One of the biggest problems is the market isn’t able to catch up,” he said.
The median home sale price statewide decreased 28 percent from June 2008, falling to $148,000.
Nationally, the median home sale price dropped to $172,900 in May, down 16.1 percent from the same time last year.
According to the National Association of Realtors, the $8,000 tax credit for first-time homebuyers is aiding sale numbers nationwide.
“Strong activity by entry-level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Lawrence Yun, chief economist for the National Association of Realtors, said in a prepared statement.