For big housing bargains, race to Daytona Beach, Fla.

— -- Daytona Beach, Fla., is a buyer's market, as home prices continue to tumble.

"Home values have never been so good," says Marge Allison, president of Daytona Beach Area Association of Realtors. And that is enticing many buyers who could not afford a home when the market boomed.

In August, home sales were up 20% compared with the same month last year. Home prices, though, went in the opposite direction, falling 19%.

Properties are still selling at a deep discount because short sales and foreclosures saturate the market. In the first half of the year, Daytona Beach's foreclosure rate ranked among the top 20 metro foreclosure rates in the country, according to RealtyTrac.

Because of continuing job losses, many homeowners have not been able to keep up with their mortgage payments, and they are giving up their homes. "Those homes are now added to the heap of foreclosures," says Sean Snaith, an economic forecaster at the University of Central Florida.

The $8,000 federal tax credit has helped many first-time home buyers take advantage of the pricing. Agents are trying to finish deals before the tax credit expires on Nov. 30, while the industry is lobbying Congress to extend it.

But even though home buyers have many houses to choose from, sales are not always happening quickly because it's harder to get a mortgage. "The loan requirements are very stringent," Allison says.

And even if a home buyer finds a great deal, it may not go through over worries about a job loss, she says. In July, the unemployment rate in Daytona Beach reached 11.2%, higher than the national rate.

Yet even though the market has not yet leveled off, it seems to be heading in that direction.

"If they (buyers) wait for the bottom, the bottom will be here and gone before they realize it," Allison says.

Snaith says the market is in the midst of recovery.

"I'd liken it to removing the bodies from the battlefield," he says. "It doesn't mean that the war is over. But it's an important step."