Existing home sales in the South dropped nearly 19 percent in August from a year ago, while the median sales price dropped 3.4 percent to $176,500, the National Association of Realtors reported Wednesday.
Compared with the rest of the country, existing home sales in the Southern region were weaker, but prices held up better.
Nationwide, August sales fell 15 percent – without adjusting for seasonal factors – while the median price slid 9.5 percent to $203,100.
But real estate is local: Six Southern metro areas saw improvements in median sales prices, including Raleigh-Durham; Tulsa, Okla.; and Wilmington-Dover, Del., according to The Associated Press-Re/Max Housing Report, also released Wednesday.
The report analyzed home sales recorded by all real estate agents in those areas, regardless of company affiliation.
Fourteen other Southern metro areas saw decreases, led by drops of more than 18 percent year-over-year in the Florida cities of Miami, Orlando and Tampa.
Florida continues to see high foreclosures, which were largely caused by lax lending practices, including home loans approved with no documentation of income and often no down payment.
High foreclosures are driving down sales prices and causing gut-wrenching turmoil on Wall Street – two factors behind the heavily debated $700 billion government bailout of the financial services industry.
Andres Carbacho-Burgos, an economist at Moody's economy.com, said the problems in Florida, such as falling prices and inventory buildup, have spread to other parts of the South.
He said shoppers are wary of buying a home when prices are falling because they don't want to see the value of their investment go down.
“It's a vicious cycle of home prices which can only he halted if banks can ease their restrictions on credit,” Carbacho-Burgoshe said.
If passed, the government's historic bailout could improve consumer confidence and has the potential to benefit Americans looking to buy a home, according to Carbacho-Burgos.
In terms of sales volume, the worst year-over-year results came in San Antonio, Texas, and Charlotte, which had drops in existing home sales of more than 40 percent, the AP-Re/Max report showed.
Six cities saw decreases in home sales of more than 30 percent – Raleigh-Durham; Atlanta; Richmond, Va.; Baltimore, Md.; Wilmington-Dover and New Orleans.
Prices in Raleigh-Durham were almost flat at $209,100, compared with August a year ago, according to the AP-Re/Max report.
John Wood a real estate agent with Re/Max Partners in Cary, said prices in Raleigh-Durham stayed relatively steady during the housing boom, so the area hasn't seen a dramatic drop in prices.
But, he added, “We have apartments that are full of families waiting for their homes to sell in the rest of the country before they can buy here. Now the question is, will they qualify?”