Instead of buying a house in Homestead, families might decide a moderately priced condo conversion in Kendall makes more sense, Winston said.

In Broward, Chris Vlad, chief appraiser with Hollywood-based Alpha One, said activity is picking up in areas that are being hardest hit by foreclosures and the flagging economy, notably west Hollywood, Miramar and sections of Lauderhill.

"It's very possible those areas had most of the option [adjustable-rate mortgages], where the people barely managed to qualify in the best of times, " Vlad said.

Rapidly sinking property values in those areas offer a silver lining: Hundreds of homes are being recycled to buyers who were sidelined by soaring prices during the boom.

In Broward, about 651 houses and condos listed for less than $199,000 exchanged hands in May, more than in any other price range.

In Miami-Dade, sales are registering in well-established areas such as Coral Gables and Pinecrest, according to Butler, though price declines have been steep. In Coral Gables, for instance, the median in May was down 35 percent to $655,000.

"People feel more comfortable buying in a well-established neighborhood and markets . . . and we've already starting to see that."

In the Gables, 20 homes were sold in May.

TOUGH TO FINANCE

Financing is a barrier in all market segments as lenders are requiring higher down payments and credit scores to qualify for mortgages.

But in high-end markets, buyers may find it particularly difficult to come by jumbo loans of more than $750,000 because the secondary markets for them have withered in the credit crunch.

Consequently, real estate agents say they have seen a sharp rise in all-cash deals, especially from investors.

"Last year we were at 18 percent cash deals, and, now, we are up to 28 percent of our deals, " said Gus Rubio, vice president of Coldwell Banker.

Miami Herald business writer Bridget Carey contributed to this report.