Atlanta Home Prices Drop At Slower Pace

March stats in national Case-Shiller index offer hope, local analysts say.

Metro Atlanta home prices kept falling in March, but the pace of decline slowed a bit, according to a closely watched index.

Local prices slipped 1.5 percent in March from February, following several previous month-to-month declines of more than 2 percent. Still, on a year-to-year basis metro Atlanta home prices were down almost 16 percent from March 2008, dropping to levels not seen since late 2000, according to the Standard & Poor’s/Case-Shiller National Home Price Index.

But the long fall is over, argued Steve Palm, president of SmartNumbers, a real estate research firm in Marietta.

“Case-Shiller is a great survey, but you just can’t read too much into that,” he said. “We have every [home loan] closing tracked, so I know February was the bottom.”

Buyers closed on 3,303 homes in April, up more than 20 percent from March although down 21 percent from a year ago, Palm noted.

During April, sale prices averaged $191,803, up 4.4 percent from March although down 18 percent from a year ago.

Residential real estate typically sees sales surge as spring slides into summer.

Whether April’s data is more than a whiff of recovery depends on whether the spurt of demand can soak up huge inventories of unsold homes. That challenge is made greater as foreclosures and bank sales continue flowing into the market, dragging down the value of surrounding homes.

Half, if not more, of all recent resales have been bank or foreclosure sales, said Eugene James, division director for MetroStudy in Atlanta.

Inventory has started to drop, “but more importantly, the number of foreclosed listings are 13 percent of the total, which is lower than this time last year,” James said. “These are good signs.”

Nationally, home prices dropped 19.1 percent in the first quarter from a year earlier, according to the Case-Shiller Index, which is based on a 20-city survey. They are down 32.2 percent since peaking in the second quarter of 2006.

Prices never soared in Atlanta the way they did in Las Vegas or Southern California. Prices here are down about 21 percent since the peak, compared to roughly 40 percent in Los Angeles and nearly 50 percent in Las Vegas.

Markets within each metro area vary widely as well. Some areas of Atlanta have already seen prices rise modestly. It’s just that the broader region shares some problems cooked into the housing bubble.

Declining prices are the result of too many homes for sale, combined with financial trouble for many boom-time buyers.

That combination swelled the normal pool of homes for sale —- and that means the market will continue coping with the aftermath of the housing bubble, said Jim Crawford, a Roswell-based Realtor with Re/Max of Greater Atlanta.

“The Atlanta market, due to the no-money-down financing —- has been extremely difficult,” he said. “It may remain that way in the near term.”

One house’s ups, downs

The metro Atlanta housing market has seen remarkable highs and lows. Here is how the sale price on one house in Clayton County, in zip code 30236, has fluctuated in recent years, based on numbers from SmartNumbers.

> The house, located in the Lake Spivey Country Club area, originally sold for $216,000 in 1993 as new construction.

> The first three times the property changed hands, the price went up. It sold in June 2005 for $343,000, a 59 percent jump from the original sale price; in September 2005 for $440,000, a 28 percent increase; and in January 2006 for $480,000, another 9 percent increase.

> In November 2007, with the housing boom over, prices metro-wide dropping and Clayton County’s school system woes coming to a boil, the house went on the market for $334,400, a 30 percent decrease from the previous sale price.

> Within the month the asking price was cut 18 percent, to $274,900 . The listing expired on Nov. 30 and the house had not sold.

> In early 2009, the house, then bank-owned, was relisted for $251,900 .

> The house sold in April at auction, in fairly good condition and after 533 days on the market, for $136,500.

Article By Michael E. Kanell, Michelle E. Shaw
The Atlanta Journal-Constitution

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