May sales in Sarasota-Bradenton climbed 11 percent from a year ago while rising 24 percent in Charlotte County-North Port. It was the third

consecutive month of gains to the south and the second to the north.

Prices were another story, with only one market in the state posting a gain.

Sarasota & Bradenton's median sales price fell 16 percent last month to $246,200 from the same time last year. The median was also 8.2 percent less than April's $268,200. But the May price was still within the $240,000 to $270,000 band that prices seem to have stabilized in during the past 10 months.

Though down 17 percent from a year ago to $154,600, Charlotte County-North Port's median was up nearly 8 percent from April's $143,400.

Driving both the sales spikes and price declines are distressed properties flooding the market and the pressure they are putting on other sellers.

A total of 2,161 foreclosure filings, default notices, auction sale notices and bank repossessions entered the court systems last month, a 12 percent increase from the previous month.

Short sales are now a significant part of sales volume, perhaps a third or more.

Distressed properties are having a big impact on

prices.

It is forcing many owners out there with properties on the market to price properties to compete with the foreclosures and the short sales.

Banks will continue to unload distressed properties through the rest of the year and sales should continue to increase well into 2009.

We will see a feeding frenzy between now and the end of the year because banks are going to have to get short sales and foreclosures off their books to get rid of the losses.

Others also see the renewed buying as evidence that many fence sitters are finally entering the market, thinking that prices are near a bottom.

Rising mortgage rates are prompting others. Rates on 30-year mortgages rose again this week, climbing to the highest level in more than nine months. Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.45 percent this week.

Interest rates are starting to inch back up and a lot of people don't want to wait too long until the interest rates get too high.

If people can qualify for a loan, they are going to get one heck of a deal.

Timing has played a large role in why this market is doing better than other parts of the state. We were the first to have the downturn, now this is the time that we're seeing the upturn here. The values have dropped significantly over the last two years, and now buyers that have held off on buying are starting to get into the market place.

Another recent trend in sales, is the amount of foreign investors entering the market. A lot of overseas money has been coming to the region, and people who represent funds have been especially noticeable.

Some of these funds, they're coming in and buying multiple properties.

Unlike investors and speculators during the boom, who bought in order to flip for profit, this breed of investors is approaching properties as investments, planning to get rental income out of them for the next several years.

Nationally, sales of existing homes also edged up slightly in May, although median home prices continued to fall. Sales rose by 2 percent to 4.99 million units last month, only the second sales increase in the past 10 months.

The median price of an existing home sold in May dropped to $208,600, a fall of 6.3 percent from a year ago. It was the fifth biggest year-over-year price decline in records that go back to 1999.

The strength in sales reflected gains in all parts of the country except the South, where sales dropped by 0.5 percent.

Sales were up 5.5 percent in the Midwest, 4.6 percent in the Northeast and 2 percent in the West.

The inventory of unsold homes dropped by 1.4 percent to 4.49 million units, still about double the inventory level that existed during the five-year housing boom.