Last month, year-to-year home sales increased by 34 percent to 14,419 compared with 10,778 in the same month the previous year. Also, home sales in September represented a 4.1 percent increase compared with August sales activity.

On the other hand, market data showed that sales of condominiums across the state rose by 77 percent last month from the same month a year ago. September condominium sales also represented an 8.9 percent increase over the total number of houses sold in August.

All metropolitan statistical areas (MSA) in Florida posted home sales increases last month. Similarly, condominium sales also increased in all MSAs except one. According to market data, majority of Florida MSAs reported sales increases for 15 straight months.

Meanwhile, the median home sales price in Florida dropped to $142,000 last month from a year ago $174,900, representing a 19 percent decline. Housing analysts said that cheap foreclosed house sales remained to be the major contributor in home sales gains.

They said that foreclosure properties pulled down home prices and values in the state. However, low-priced houses are what attracted first-time buyers to flock to the state and use their federal tax credit of $8,000 to make home purchases.

Nationwide, the median sales price for single-family houses was $177,500 in August, a drop of 12.1 percent compared with the previous year. Massachusetts posted median resale price of $315,000, $292,960 in California, $205,000 in New York and $265,862 in Maryland.

Industry experts note several positive signs pointing towards a housing market recovery. Foremost of these signs is the rising home sales in several areas in the country where foreclosure rates are high.

They believed that extending and expanding the federal tax credit for first-time homebuyers would greatly help in stabilizing home prices and expediting the recovery of the housing market. They pointed out that the federal tax credit is the best housing recovery program so far of the Obama Administration.

They added that the program not only encouraged homeownership but also help reduce the number of cheap foreclosed house that is glutting the market and affecting home prices and values.

According to the firm, Floridians and out-of-state investors have been getting the biggest discounts when buying homes in the state. In major Florida cities, home buyers have been getting a median discount of $17,586 or seven percent lower than the median listing price in August.

Compared to the nationwide median discount of 3 percent or $6,525, the median discount in Florida in August was substantial. In July, the median discount nationwide was $7,018, representing a 3.3-percent discount from the asking price.

According to some economists, the negotiating power of home buyers in Florida, particularly in the metropolitan Miami-Fort Lauderdale area, has surpassed the national median in August.

The level of negotiating power indicates the level of home inventories, the economists said. In housing markets where there is low inventory, home buyers get low discounts, but in markets where the inventory is high, home buyers hold the upper hand. They possess the negotiating power.

Based on nationwide home sales data, the negotiating power of home buyers reached its highest level in January when home buyers obtained a median discount of $10,096, representing a discount of 4.5 percent from the asking price.

The economists also said that in other areas where price discounts are narrowing, foreclosures expected in the coming months may hinder their housing market recovery, putting more cheap foreclosed homes for sale into the market.

In Florida, based on data from a foreclosure tracking firm, more than 62,000 households were notified of delinquency or foreclosure in August, with one out of every 140 residential units put into the distressing foreclosure process.

With an increase rate of more than 10 percent compared to the previous month of July and a foreclosure rate of one in 140, the pace of foreclosure in Florida was the second fastest in August among all U.S. states. Florida was second only to Nevada, where one out of 62 households was put into the stressful foreclosure process.

One housing sector that has been worsening the foreclosure situation in Florida is the residential condo sector. Because of the glut of vacant condos in major cities in Florida, property owners have not been able to sell their condo projects, making them unable to pay their loans, pushing more condos into foreclosure and increasing the number of cheap foreclosed homes for sale available throughout Florida.

A few years ago, one could not find a house priced under $100,000 in Brevard County as Florida was among the top places sought by people looking for a place where they can spend long vacations or where they will stay during their retirement years.

But now, the sharp rise in foreclosures and the oversupply of housing units, especially condo units, have pushed down home prices to levels never imagined in recent years.

A primary-grade teacher who has been dreaming of owning a house started looking for a property a few years ago. She saw that prices were dropping sharply from price levels in 2005, but she still could not find a unit that she could afford, so she waited.

This week she is now about to close on her dream house – a three bedroom, two-car garage and two-bath house in Palm Bay. She bought it for only $80,000.

This teacher related that she finally entered the market when she came to know of the $8,000 federal tax incentive and the availability of cheap foreclosed property for sale throughout the county.

She applied for a home loan and she got a relatively high loan amount, higher than the $70,000 through $90,000 price ranges of homes she found to be in large supply across the county.

She also said that many of the homes available for sale were foreclosures and pre-foreclosures that required only minor repairs. She looked at about 20 houses before finding the unit that she has purchased. Now, paying her monthly home loan payment is just like paying her rent because they are now nearly equal.

Brokers in the area confirmed that it is a buyer’s market in Brevard County now. A condo unit which was appraised just eight months ago at $140,000 is now selling at only $67,000 despite its access to the Royal Oak golf resort and its being a two-bedroom unit.

Realtors also said they are getting requests from buyers in other states to look for houses in the $125,000 price range and they get pleasantly surprised when they learn that they can buy a cheap foreclosed property for sale and other types of houses priced below $100,000.

With $26 million in funding received from the federal Neighborhood Stabilization Program, the city of Jacksonville is stepping up its affordable housing program by buying foreclosed homes and rehabilitating them for sale to qualified working families.

The program is a winner for every sector, according to Donna Reed Mountain of Kendale Land Development. It also helps create jobs, aside from putting lower-income families into homes and rejuvenating blighted neighborhoods. She said that the program enabled her company to find work again, and now she works five days a week instead of two days a week when the company has no projects to do.

Amy Rankin, marketing officer for the NSP program, said the best result of the program is the provision of an affordable house in a good neighborhood to working families who otherwise could not buy a home without some assistance.

The Jacksonville NSP-funded affordable housing program helps qualified developers in purchasing foreclosure houses or distressed properties by providing them with acquisition financing and repair cost financing.

After the properties are rehabilitated, they are offered for sale to families who have been preselected based on income requirements.

Byron Colley, a Jacksonville construction businessman, said the federal program is a real help to the community. Now, construction workers, subcontractors and suppliers have work to do. Families are not the only ones helped, but also the trades, he added.

Currently, there are 51 houses being acquired, repaired or rebuilt under the NSP program.

City officials said the program is expected to help absorb excess foreclosure inventory and contain the continued rise in foreclosure properties in the metro area.

Based on a foreclosure survey conducted by a real estate research firm, the number of foreclosure filings in Jacksonville in August soared to its highest level in over 5 years to nearly 3,900, marking a 51-percent increase from 2,550 filings in July and a staggering 111-percent jump from 1,830 filings in August last year.

The 3,000 barrier was surpassed in June, when total filings reached 3,640, the first time the city exceeded 3,000 units since April 2005.

According to Richard Zeisel, a distressed specialist in the area, said he believes filings will continue to rise partly because of the resetting of Alt-A mortgage loans. The NSP-funded program of purchasing foreclosure houses then is a timely response to the problem.

The July numbers marked the eighth succeeding months of improvements in property sales in the county. For a breakdown of home sales in July, Bartow posted three home sales, similar to last year and East Polk completed 155 sales deals, a rise of 22 percent from the previous year’s 127. Additionally, 227 homes were sold in Lakeland, an increase of 24 percent from the previous 183 deals.

Many industry experts said that foreclosure homes make up the bulk of home sales in the county in July. And they expect the trend to continue in the coming months as foreclosure filings and starts in the region rose to another record level last month. Added to the problem are the growing unemployment rate and the scheduled resetting of adjustable-rate mortgages.

Experts said that unemployment is pushing foreclosures rate to the top while pulling down property values and prices.

Data from the Clerk of Courts showed that the county posted 6,305 foreclosure filings in the first seven months of this year. If the pace will continue, the number of foreclosure filings is expected to surpass the 9,467 posted in 2008.

Meanwhile, industry experts said that sales activity in the non-foreclosure market are far from encouraging, meaning properties are selling but there is no indication that sales numbers will start to pick up soon.

They said that sellers of non-foreclosed properties could not compete with foreclosed properties offered for discounted prices.

But despite the increase in home sales in Polk County and across Florida, the median property value continues to decline because the bulk of sales are distressed properties for sale, including bank owned homes and pre-foreclosures.

Experts explained that bargain-priced foreclosure houses are pulling down prices and values of all properties on the market for sale. In Polk County, the median home price was $116,900 in July, a drop of 15 percent from the same month 2008’s $138,300.

Statewide, sales of homes in Florida totaled 15,882 in July, a rise of 37 percent from July 2008’s 11,595. The median home price for existing houses in July was $147,600, 24 percent below the previous year’s $193,800.

According to Carl Schwing, assistant city manager, city revenues have been declining because of sharp drops in real estate tax revenues. In many cities across the country, city officials are facing budget cuts because of steep declines in property revenues as foreclosure properties keep on pushing down property values.

Across Cape Coral, property values have fallen by almost 50 percent in the past two years.

Since June 2007 when foreclosures began to worsen, Cape Coral has spent over $239,000 mowing the grounds of 4,534 foreclosed homes. That year, the budget for mowing was only $16,000, but the city was able to carry out maintenance for foreclosed properties.

For the next fiscal year, according to Frank Cassidy, manager of the Cape Coral Code Compliance Division, the budget for the division which supervises the maintenance of foreclosure properties is $2.38 million, a substantial decrease of 13.73 percent from this year’s budget. The division spends most of its budget to pay employees and its operating budget is currently at around $300,000.

The reduced budget meant the elimination of 9 employees – 7 code compliance officers, 1 section manager and 1 customer service officer.

Cassidy said that his division is going to be completely reactive because of the significant budget cut. Nearly his entire team of code enforcement was eliminated. He added that his division has become only 30 percent proactive.

The maintenance of abandoned foreclosed homes has been prioritized by Cassidy’s team because of the need to prevent neighborhood decay and the higher risk of crimes that comes with blight. The city sends personnel to mow lots, board up pools and remove trash.

Cape Coral has been hit hard by the foreclosure crisis. Last year, among all metro areas in the country, the metro area covered by Cape Coral and Fort Myers had the biggest foreclosure rate. In the first 6 months of this year, the Cape Coral area ranked second in foreclosure rate, second only to Las Vegas. One housing unit out of every 14 units in the metro area was hit with a default or foreclosure notice.

For the next fiscal year, city officials have set $116.4 million as its operating budget, a sharp drop of over $10 million from the current budget.

Nevertheless, Cassidy and fellow council official Gloria Tate said they will try their best to work within the budget.

The federal and state governments have launched several programs to help distressed homeowners remain in their homes. And one of the strategy that is fast gaining popularity in Florida as a way to help distressed homeowners avoid house repos is short sale.

Three years ago, short sale is hardly a known strategy to avoid foreclosures. Now it is the hottest trend in the real estate market. Short sale involves lenders agreeing to sell distressed properties for less than the total amount that homeowners owed for their mortgage.

Lenders’ agreement and full cooperation are crucial for the success of this method as they will have to accept whatever the price that distressed properties will fetch on the market as payment for homeowners’ mortgage.

Typically, lenders agree on this strategy if homeowners are already behind on their mortgage payments and they have no way to make their accounts current.

According to industry experts, short sale allows banks to get more money from delinquent properties than if they repossessed on them. The drawback for homeowners is that they will damage their credit scores but not as much as when they go into foreclosures.

Experts said that short sales accounted for over 40 percent of the total home sales in Florida. About 15 percent to 20 percent of home sales involved foreclosure properties.

They pointed out that sales of foreclosed homes have pressured property prices in Brevard County and also the rest of Florida. They added that with the unemployment rate surging at a record level, they do not expect the number of foreclosed homes to dwindle anytime soon.

Meanwhile, industry experts are expecting the number of short sales to surge in the near future, particularly if foreclosure will remain unabated.

Owners who are considering short sale as a way to sell their properties include investors who are trying to dispose of their vacant houses or condominiums and people who lost their jobs or source of income and have purchased properties that they could not afford.

Industry experts said that short sale will continue to be a driving force in the real estate market in Florida for some time, especially if the recession drags on.

Task force chairwoman 11th Circuit Judge Jennifer Bailey said that homeowners in Florida missed out on many alternatives to avoid REO property listing, including federal programs, because most of them do not trust their lenders or failed to understand the process.

According to results of a statewide survey, many distressed homeowners want to work with their lenders to create possible ways to avoid foreclosure. Meanwhile, lenders are developing new types of foreclosure prevention programs and attempting to reach out to troubled borrowers.

However, these efforts proved to be ineffective because many homeowners have little understanding of the foreclosure proceeding, other than its cost, according to Bailey. She explained that most lenders failed to explain the process to distressed homeowners in a way that they would understand it.

The state task force is planning to recommend that troubled homeowners pay for their foreclosure counseling. It also plans to require mediations in all repossession cases.

According to Bailey, many homes will be saved from REO property listing if foreclosure prevention counselors can recommend programs that will best work for the troubled borrower and they can explain details of various workout programs. She added that in this case, more foreclosure cases would be settled instead of languished in court.

Data showed that foreclosure filings in the state rose four times between 2005 and 2007, resulting to case backlogs due to limited judicial resources.

On the other hand, Judge Lee Haworth requires mediation in Manatee and Sarasota counties. Under the rule, distressed homeowners of homestead properties have the option to request for mediation before lenders could file an expedited foreclosure process in court.

The state task force is to recommend to the Florida Supreme Court ways to manage all the foreclosure cases while protecting lenders and homeowners’ rights.

Bailey said that several options are available for homeowners to save their properties from foreclosures. These options include loan modification, mediations and short sales.

The task force plan to use results of the survey to ensure that it has a clear and accurate outlook of the REO property listing crisis.

Florida posted a total of 58,931 filings in May, a rise of 50 percent from May 2008 filings. The total included 39,523 lis pendens; 13,363 notices of foreclosure sales; and 6,045 real estate owned foreclosed property units.

Florida was second only to California, which had 92,249 foreclosure filings, including 13,055 real estate owned foreclosed property units.

Based on state foreclosure rates, Florida was third in the May ranking. One house in every 148 housing units received a foreclosure action. It was Nevada who topped the rate chart, with 1 in every 64 housing units hit with a foreclosure filing. California was second, with a foreclosure rate of one house in every 144 housing units.

The Orlando-Kissimmee area was eighth in a rank of ten metropolitan areas with the biggest foreclosure rates. One in every 101 housing units in the area received a foreclosure action.

There are three Florida cities included in the top ten metropolitan areas with the biggest rates: the Fort Myers-Cape Coral area, with 1 in every 82 housing units receiving a filing; the Orlando-Kissimmee area with 1 in every 101 units; and the area covered by Miami, Pompano Beach and Fort Lauderdale, with 1 in every 105 units receiving a filing.

Across the country, a total of 321,480 foreclosure notices, including foreclosed property units, were posted in May, a decrease of 6 percent from total filings in the previous month of April, but an increase of approximately 18 percent from the May 2008 total. Last month, 1 house in every 398 housing units nationwide was notified with a foreclosure action.

Vermont again posted the fewest foreclosure filings in May, with only 6 filings, representing a foreclosure rate of 1 in every 51,906 housing units.

RealtyTrac collects foreclosure and foreclosed property data from over 2,200 counties across the nation. It counts residential properties that had at least 1 foreclosure filing during the month. To prevent double counting for a property that has more than one filing during the month or quarter, the firm counts only the one most recently filed.

Crist reiterated that consumer confidence has been rising and that the statewide jobless rate has declined to 9.6 percent. He also said that sales of homes are soaring, but he did not mention that most of the sales were foreclosed properties and short sales.

According to Jay Brinkmann, chief economist of the Mortgage Bankers Association, Florida is still among the four states accounting for nearly 50 percent of all new foreclosed properties nationwide. Florida, together with California, Arizona and Nevada, comprised 56 percent of all increases in foreclosure starts. These four states also accounted for 50 percent of the rise in prime foreclosure starts.

Also, Florida has the biggest foreclosure rate, based on MBA records. One house in ten housing units in the state is in foreclosure. In the first quarter this year, nearly 3 percent of all mortgage loans in Florida were hit with foreclosure filings. Florida’s rate was second only to Nevada, in which 3.4 percent of loans were hit with filings.

Meanwhile, sales of homes in the state in April increased by 18 percent, compared to April 2008. Home prices are still down, currently 31 percent below the price levels in April last year. The rise in foreclosed properties has been affecting both home prices and home sales.

The statewide jobless rate dropped by only a small fraction in April to 9.6, but Governor Crist emphasized the increase by saying that the jobless rate decline is one sign that Florida’s economy is recovering more quickly than expected.

Crist also stressed that Florida is economically better than other states. He said that other states have increased taxes on income, gas and sales and have cut down health and education services to needy families.

In a previous meeting with the press, Governor Crist announced his intention of running for the U.S. Senate.

Meanwhile, officials of the state Agency for Workforce Innovation cautioned about interpreting the negligible decline in the jobless rate.

University of Central Florida’s economist Sean Snaith insisted that one month’s data is not enough to cover the fact that 10 percent of houses across the state are either foreclosed properties or in other stages of foreclosure.

Nevertheless, foreclosed properties figured in Governor Crist’s budget. The budget bill included an increase in bank foreclosure fees to help the courts handle foreclosure filings which have increased, with 64,588 cases filed in April alone.