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OCALA, Fla. – Oct. 30, 2008 – After looking at five houses in the past several months, Matt and Carrie Geiger made an offer on a home in the Ashton neighborhood in Gainesville a day after it came on the market.

They were motivated to buy in the neighborhood near Carrie Geiger’s job at Talbot Elementary School and wanted a neighborhood with less traffic after having their second child. The seller was motivated to sell after getting a job transfer. The sale closed a week and a half ago for $340,000.

Matt Geiger, who works in the Alachua County Tax Collector’s Office, figures they bought the house at about market value – it appraised for $345,000 – but still below the $360,000 to $370,000 that houses in the area were selling for a year or two ago, he said.

Since the housing market started its slide in 2006, home buyers are finding that prices are down from historic highs, interest rates are near historic lows, and high inventory and low sales means more homes to choose from and more time to shop around.

It may be, as Realtors are fond of saying, a good time to buy.

Whether more buyers do take advantage of prices depends on how the financial crisis plays out.

Florida real estate experts have serious concerns about the availability of financing, according to Wayne Archer, executive director of the University of Florida’s Bergstrom Center for Real Estate Studies. And stock market volatility will likely delay plans for baby boomers to retire and move to the state.

For buyers waiting for the market to hit bottom – not unlike trying to time the stock market and nearly as futile – there are signs that housing may have started a comeback. Nationwide, buyers snatched up short sales and foreclosures in September, taking advantage of median prices that were 9 percent below a year ago to drive up closings of existing single-family homes 1.4 percent, according to the National Association of Realtors. It was the first year-over-year sales increase in nearly three years.

In Florida, one of the states hit hardest by the housing bubble, September sales were up 24 percent from a year ago as buyers took advantage of median prices that were down 22 percent, according to the Florida Association of Realtors.

But J. Parrish, president of Coldwell Banker/M.M. Parrish Realtors and the Gainesville-Alachua County Association of Realtors, said whether buyers are getting deep discounts depends on individual buyers and sellers.

And, of course, location.

While sales of existing homes were on the upswing statewide, sales were down 37 percent in Gainesville in September from a year ago. The median price – with half selling for more and half for less – was down 8 percent, compared to the 22 percent statewide decline, to finish at $175,100.

While the median price can indicate a shift in prices of individual homes, it is often more indicative of a shift in the price level of what is selling, industry professionals say.

For example, while the Florida association reports that Gainesville’s median price was down 7 percent in the second quarter of this year, the price of individual homes resold or refinanced during the same period was down 4.2 percent, according to the Office of Federal Housing Enterprise Oversight.

That shows a market shift toward lower priced homes from the previous year. And since demand has shifted to the lower end of the market, the best bargains are at the higher end, especially for homes of $600,000 or higher, according to Parrish.

At the rate of sales this year through September, there is a 20-plus month supply of homes for sale at $600,000 or more, according to Steve Elwood of Elwood Realty Services Inc. It would take 9.7 months to work through the homes listed below $250,000 and 13.5 months for homes between $250,000 and $600,000.

The Ocala market continues to be more reflective of state trends, with sales up 10 percent in September, but median prices down 16 percent. At $136,500, Ocala is the lowest priced market in the state. Prices in Ocala have been among the lowest in the state throughout the market ups and downs.

While median prices were down 13 percent to 18 percent between April and June, the price of individual resales and refinancings was down 11.4 percent, indicating a market shift to lower priced homes and discounts on individual homes.

Karen Grider of Coldwell Banker/Ellison Realty and president of the Ocala/Marion County Association of Realtors, said the drop in prices in the Ocala area is slowing, and Realtors’ interest from buyers is up. She also said they are seeing people taking their money out of the stock market to invest in real estate.

“If people want to get a good bargain, they’d better not wait,” she said. “I think we’ve seen the prices as low as they’re going to go.”

In Gainesville, Elwood said he’s had three times as much activity in terms of good-faith deposits and closings in October compared to any other month this year, and appraisals are starting to come in at the selling price or better – good signals that the market is starting to turn.

Parrish said there is still downward pressure on prices, however, with more new homes coming on the Gainesville market than are being sold.

New home construction has been harder hit by the housing bubble, and prices are down, but Parrish said there’s only so far builders can go because of labor and materials costs.

Andrew Hodor is building single-family attached town homes at Villas at West End near the golf course in Jonesville.

He said he started offering the homes $30,000 to $40,000 below market value at the height of the market two years ago to get the project started. After bringing up the initial prices closer to current market values, he said the homes are still $15,000 to $20,000 below what they could have fetched a couple years ago.

Hodor said he sees some signs that could drive up new home prices.

Buyers are starting to deplete the new home inventory. There also are very few new projects in the planning process and with the time it takes to get approvals, new home buyers may find a lack of inventory before new projects can come online.

Grider said Ocala is still working its way through a building boom inventory with 7,000 new homes on the market along with foreclosures on sub prime borrowers.

“I think we’re back to a nice, stable market, or we will be pretty soon,” she said. “There’s good buys out there everywhere, but everyone’s afraid of what’s going to happen in the market and if we can’t get past the fear, it’s going to stay the same.”

Geiger said because of concerns about the banking industry, they went ahead and locked in an interest rate of 6.125 percent ahead of time.

“I would have liked lower, but that’s not a bad rate,” he said.

Now they are on the other side, needing to sell their old house. They’ve already come off their original asking price – from $238,000 to $234,000 – and within a range his Realtor said is doing better than higher-priced homes.

“We kind of stepped out on a little bit of faith and risk,” Geiger said.

“I don’t think it’s a great time to sell, but we’re thinking positively.”

Source: FAR