HAVANA – For sale: 5BR 4BA tropical delight along Havana’s exclusive embassy row, just steps from the balmy waters of the Florida Straits. Asking price $200,000. Foreigners need not apply.

This is the face of a brand-new real estate market that became official in Cuba on Thursday, as a new measure legalized home sales for the first time in generations, applying a jolt of free-market wheeling and dealing to one of the socialist country’s most dire problems: a grave shortage of housing.

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A woman looks out from an old building in Havana Friday. Cubans will now be able to buy and sell homes, President Raul Castro has delivered on his major promise this year to relax the government’s grip on the economy. The Associated Press

Tania Duran and her husband Fernando Ramiro stand Thursday in their home in Havana they have just put on the market A new housing law allowing Cubans to freely buy and sell their homes took effect Thursday. The Associated Press

“I think this law is divine,” said Tania Duran, who’s offering the home in western Havana. “What I find strange is that it hasn’t happened before, because it’s only logical that if you have property and want to sell it, you can.”

Listings on a Craigslist-style website have mushroomed since the law was announced last week, with prices ranging from the tens of thousands into the hundreds of thousands of dollars, even a cool $1 million for an oceanside villa in the resort town of Varadero.

The law is the highest-profile economic reform yet undertaken by President Raul Castro, who has spearheaded a year of economic changes that has let Cubans go into business for themselves in unprecedented numbers, to legally rent out rooms and automobiles and even to buy and sell used cars.

But the housing bill is the one most likely to affect the lives of millions of Cubans. Residents of the capital began lining up at government offices early to seek information and process paperwork for property deeds, and their numbers increased throughout the day.

“This is great!” said Havana resident Maribel Diaz, who at 47 years old had never known a time when she might have legally sold her home. “We’ve really needed it for a long time.”

Until now, islanders have turned to black-market transactions with many thousands of dollars changing hands under the table. Now they can sell real estate openly, bequeath property to relatives without restriction and avoid forfeiting their homes if they abandon the country.

Cuba’s housing crunch is acute. Many extended families are crammed into aging, decrepit houses and apartments that have been subdivided again and again to shelter more and more people. The government acknowledges a shortfall of around 500,000 homes, and some experts say it lacks as many as 1.6 million units of adequate housing.

The new law should make it easier for young couples to find their own space, and for seniors to downsize their empty nests and pocket money to fund their retirement.

Because of the new law, “I have a relative who’s leaving the country and now I can take over the house,” said Ricardo Montero Bravo, 40, one of dozens of residents seeking more information and help in putting property titles in order.

Economists caution not to expect too much, too soon. Much of the money for A REVOLUTION IN CUBA?purchases is expected to come from exiles helping relatives back home, but some may be wary of investing while one of the Castros are in office. The exile community has also been hard hit by the economic recession, and may not have that much disposable income.

“Maybe the expectations are a little overblown to the extent that the situation in South Florida, where most Cuban immigrants are, is not that great right now,” said Sergio Diaz-Briquets, a U.S.-based demography expert who has written about housing in Cuba.

But Omar Everleny Perez, the lead economist at Havana University’s Center for Cuban Economic Studies, said in a recent interview that some Cubans do have the money: Bank accounts are concentrated among 13 percent of islanders who control 90 percent of the deposits, he said, and some are worth $160,000 to $200,000.

The new law requires that Cubans prove the legitimacy of their funds, and does not establish the right of foreigners to purchase property. There also is no mechanism for lending or mortgages, meaning the price must be paid in cash.

But many Cubans do have high hopes, evidenced by a flurry of activity on Revolico.com, a Craigslist-style classified ad website that since 2007 has been a clearinghouse for real estate transactions involving thousands of dollars changing hands, something that was illegal, until now.

Many listings are relatively modest: $11,000 for a two-bedroom, one-bathroom apartment in Havana’s Nuevo Vedado district, or $15,000 for a three-bedroom house in historic Old Havana advertised as “needing wprofound repairs.”

But some homes in the upscale western neighborhoods of the capital run into the hundreds of thousands. And then there’s the Varadero villa, just steps from the sea, pictured as a whitewashed, red-tile roof mansion on a walled property with palm trees and a second-story balcony.

Its $1 million price tag is particularly eye-popping in a country where government salaries average about $20 per month, and a number of Revolico users doubted its legitimacy, writing in postings on the website that nobody could have come by that kind of money legitimately. There was no phone number given for the owner, and a message sent to the listed email address bounced back.

But in Havana’s embassy district, Duran, 34, is confident that she’ll find someone with a wallet thick enough to pay $200,000 for her five-bedroom, two-story home, which her family spent years remodeling.

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