Atlanta Halts Home Price Decline But Foreclosure Struggle Continues



There was at least one positive thing that happened to Atlanta’s real estate market in 2012: it saw the end to a 26-year consecutive decline in in home prices, year-over-year, according to a report from CNBC.

© SeanPavonePhoto - Fotolia.com

© SeanPavonePhoto – Fotolia.com

Atlanta home prices rose by one-tenth of a percent during the third quarter of 2012, according to Standard & Poor’s / Case Shiller index that measures home prices in the 20 major metro areas across the United States. In another promising sign, CNN Money reports that Atlanta came in ranked 15th out of the worst 20 cities for foreclosures. While this might not sound too great, it’s actually something of an improvement from the situation in May 2012 when one in every 224 homes in the city was being foreclosed on, which meant it had the second highest foreclosure rank in the nation.

Experts says there are two main reasons for Atlanta’s high foreclosure rate – firstly, the fact that well-paying jobs are in scarce supply and have been for several years now. Even worse, many residents looking to move in order to find better paying work can’t afford to do so without damaging their credit and having the possibility of a foreclosure on their record for the better part of the next decade.

Another reason why Atlanta has been slapped with so many foreclosures in recent times is that a vast number of home buyers before the housing crash were younger, first time buyers that took advantage of bank’s loose lending policies to take out mortgages with little to no money down. As home values dropped, these buyers quickly found themselves underwater and struggling to make their repayments.

While foreclosures can be spotted all over the city, the majority of them seem to be centered on North Atlanta, De Kalb county, Marietta, Lawrenceville, Smyrna and Sandy Springs. To the east and south of the city, areas including Hampton, Peachtree City, Fayetteville, Jackson and Covington saw far fewer foreclosures and as a result, home prices have remained more steadfast.

With so many families unable to keep up with their mortgage payments, even now many are still choosing to default in order to keep food on the table and pay the never-ending stream of bills that wind up in the mailbox.

Comments

  1. On another note, I have no idea where the idea of a 26 year price decline came from. I’ve been in Atlanta most of my life and until 2008, I had never seen any kind of significant decline in prices. Historically Atlanta has averaged a steady 3-5% increase in values year over year, for many years.

  2. William Watkins says:

    One does not struggle to make their payment because a drop in value. Either they loss a job, had a rate adjustment on the loan or they just stop making payment voluntarily.

    Here in Illinois we are in bad shape when it comes to foreclosures. I understand maybe half of the properties are being held off the market for reasons like the slow judicial process here in the state. I personally know of homes in foreclosure for more than 3 years. Now, the question is–Is this an anomaly? If it’s not an anomaly the other shoe will drop in about 6 months.

    • No anomaly, just a slow process in states with judicial foreclosure. Lots of foreclosures were delayed during the foreclosure scandal investigation, and are just now coming around to getting foreclosed. The “shadow inventory” created as a result of this will definitely keep prices down, so banks are trying to let them filter through to the market as evenly as possible. Atlanta has a severe problem with high foreclosures and too much inventory, especially to the east and south of the city. The price increases are the result of very heavy foreclosure buying by wall street funded investment companies. It’s not a real recovery created by end user buyers. There is not enough legitimate demand here for that.

  3. @Hank Miller – your comments are right on. I can tell you are an experienced Atlanta real estate professional. Yes the investors are responsible for the “recovery” in Atlanta home prices, and yes, FHA is setting Atlanta’s entire metro area up for the next decline.
    But as usual, the media will report this as a genuine recovery, not the segmented market that it is, as you pointed out.

  4. Atlanta is an especially segmented market. It’s been and continues to be fraught with fraud and speculation; this has been an issue for the last 20-30 years. We’re seeing bulk REO purchases that don’t accurately reflect value, this is providing innacurate data on marketing and value trends. Currently, FHA is setting the tables for the next big problem as data shows a significant number of margianl and unqualified buyers being approved for loans. Many long standing problems remain and they continue to hamper a recovery.

    Areas outside of the city are showing signs of stabilizing but the media needs to understand that “Atlanta” is far too large a market to paint with one brush.

    • Al Twitty says:

      Frank thanks for your input and visiting the site. Had a look at yours, Good looking site.
      Have a great 2013

      Al

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  1. […] the third quarter of 2012, the most recent quarter for which we have complete data,according to Realty Biz News. That data is measured by the Case Shiller index, a popular home-valuation […]