Well, it seems as if a 21% drop in home sales prices increased the number of sales in November of 2008 by 3% in Hillsborough County, Tampa, Florida! There are many other counties in the state that are not fairing as well, however. Palm Beach County's home sales dropped 2% in November this year, but with an unemployment rate the highest that it has been since the mid 1990's, at a whopping 7.6%, the chance of home sales increasing seems unlikely. No matter what the mortgage rate drops to, if you don't have a job, it seems unlikely that you'll buy a home! On an state average, however, Florida State home sales have risen 4%.

I believe what we need to see is the homes sales prices stabilize. When the prices continue to drop, investors will wait for the better deal, if investors wait, home prices will continue to drop (it's an ugly circle). Once the home prices stop plummeting, investors will start buying again, which in turn will put the economy on the mend.

As Jim mentioned in his comment on Commercial Real Estate also in Crisis in West Central Florida blog, perhaps once homes sales begin to rise, people will start to invest in businesses again which will lead to more jobs, which will lead to more homes sales (much prettier circle than the one we are in now)!