Home sales: Bad to worse, yet turning around?

Home sales slowed to a crawl in 2007; though some areas of Florida fared better. It's a single story with multiple causes - the perfect storm. News stories in 2007 have, independently, pinned the blame on real estate investors with more money than common sense; mortgage brokers and banks willing to give a homebuyer more money than he can possibly pay back; and homebuyers who did not the time to read the mortgage terms associated with the biggest financial deal of their life.

Florida, along with a handful of other states, had the dubious honor of being at the epicenter of the home sales slowdown. In the October monthly sales report from the Florida Association of Realtors, the year-over-year number of home sales fell 29 percent, though price declines were more modest at 8 percent. While much of the mainstream media focuses on the drop, however, the figures more accurately reflect how out-of-control the real estate market was during the now-past boom years. Currently, Florida home sales compare favorably to five years ago. And over a five-year period, Florida housing prices have actually risen more than any other state except Hawaii, even with the recent price declines - up 96.23 percent in Florida, according to OFHEO, the government agency that tracks home price changes.

As the year ends, buyers have a bountiful inventory to choose from and demand exists. Many buyers fear, however, that prices will drop a bit more, making a current purchase ill-advised if they can wait it out. While that stance comes more from anxiety than actual fact, the market will turn - slowly, doggedly, yet evenly - barring any new housing-related crises, such as the mortgage meltdown that peaked in August.