Tampa Foreclosures for Sale Drove Rise in Home Sales

by on cities

Tampa foreclosures for sale drove record home sales in October, based on data from the Greater Tampa Association of Realtors and Florida Realtors.

Foreclosure sales and short sales accounted for nearly half of total sales in Tampa Bay in October, pushing total sales to increase by 36 percent to 2,758 units from 2,021 units in October last year.

Total October sales included realtor sales in the counties of Pasco, Pinellas, Hernando and Hillsborough and marked the highest sales total for the month of October since October 2005 when the Tampa area sold 3,735 units.

The median sales price fell to $137,500, a decrease of 10 percent from the $152,300 median in October 2008 and a drop of 42 percent from the highest price level which was reached in 2006.

Besides the Tampa area, all other Florida metro areas increased their home sales in October on a year-over-year basis. The realtors said that the increase was driven by first time home buyers who wanted to take advantage of the federal tax credit before its November expiration date and who wanted to snap up lower-priced Tampa foreclosures for sale.

One of the major factors driving the still high number of foreclosures in the Tampa area is the increasing number of homeowners in negative equity. In September, almost 46 percent of all homeowners with mortgages were drowning in negative equity, much higher than the nationwide percentage of 23 percent and higher than the statewide percentage of 45 percent.

Across Florida, an estimated two million homeowners with mortgages were wallowing in negative equity, behind only California which had 2.4 million. These two states accounted for over 42 percent of home loans in negative equity nationwide in September. Other states with high negative equity numbers were Nevada and Arizona.

According to analysts, most residential mortgages which are currently in negative equity had been taken out between the years 2005 and 2008. They include new houses purchased between the years 2006 and 2008. Additionally, many of these homes were bought at $270,200 on the average and many used adjustable rate mortgage loans.

Analysts said that negative equity pushes more foreclosures as real estate investors often walk away when their investments drop significantly in value. Also, homeowners cannot refinance or modify their loans if they have significant negative equity.

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