Homes sales in Bermuda have plummeted from almost 600 properties being closed on four years ago, to less than 100 changing hands in the first half of the year.And the average sale price of condos (below $32,400 annual rental value) has dropped 25 percent so far over 2010 with a growing inventory on the market.The island’s real estate dollar volume has gone from almost $700 million in all sectors combined in 2007 (residential, condos, land and commercial) to less than $100 million through June 30, 2011.A new report by Rego Sotheby’s International Realty gives the clearest picture yet of the economic impact on the local real estate market.“The challenging economic conditions, tighter financing restrictions, delays in licensing and slow-closing registrations are all contributing factors to the continued decline,” said Mary-Claire Havas, vice president of sales and marketing for Rego Sotheby’s International Realty.There was some good news, however.The average home price appears to be rising while the high end market showed a burst in the first half of this year with the average price of luxury homes (ARV over $153,000) hitting a five-year-high of $7.38 million.There were seven high-end home closings in 2010, as compared to five already in the first six months of this year, and Ms Havas was able to share that four additional properties with market prices ranging from approximately $6 million to $20 million are additionally under contract. She could not provide further details out of respect for the privacy of the sellers and buyers.Ms Havas said the positive activity in the luxury tier showed “there’s confidence still in Bermuda as an investment long-term - both fiscally and as a lifestyle choice.”The Rego Sotheby’s report noted: “Bermudians have been the strongest purchasers of the over-$153,000 ARV properties for the last five years, with a peak of 69 percent in 2007 and low point of 40 percent - thus registered - in 2010, but 2011 is back on the rise with Bermudians registered as near 60 percent of the purchasers thus far in this tier.”In addition, the report shows that while total home closings are down, the average sale price in the entry-to-middle-range market (ARV under $153,000) has been climbing since a 2009 low of $1.19 million. The average sale price in 2011 thus far is close to the 2007 high of $1.3 million.One reason for that, Ms Havas said, is: “The key is that the spending buyers now are really looking for the fullest value of every dollar. We’re seeing across the board that buyers are not interested in the financial cost or stress of renovation. With so much inventory to choose from, buyers are paying for where they see the best value proposition - excellent condition, location, meets lifestyle needs, etc.The report stated it’s a buyer’s market “with extensive inventory and many homes taking two to three times longer to sell”.Ms Havas added that it is important to note that the fullest report for 2010 is not yet complete, as closings may be registered with government for up to 12 months. The 2011 numbers are also obviously not complete, and Ms Havas reminds that the most accurate picture of the 2011 market will be reflected at the end of 2012.As for the condo market, the report states: “One of the main factors we feel have influenced the drop in the condo market values is the elimination of 100 percent financing. With the local lenders now requiring 20-25 percent down, many of the traditional first-time buyers don’t have upwards of $100,000 cash available for deposit.“There are currently well over 200 condos on the market and the only significant activity is where vendors are going to market just below value, stimulating activity.”The report continues: “The average sale price of condos under $32,400 has dropped to an all time low of $539,000 - vs. the highs of just over $715,000 back in 2007 and 2010 - revealing a difference of about 25 percent.”There is an inventory of more than 50 condos (below $32,400 ARV) on the market now. And well over 150 condos are for sale in the over $32,400 ARV range.