Atlanta home prices post another small gain

By Michelle E. Shaw

The Atlanta Journal-Constitution

Metro Atlanta home prices continued a mild rebound in July, according to a widely watched national index, but remain well below year-ago levels.

Prices in the region rose 2 percent from June to July, the second straight month of improvement in the S&P Case-Shiller Index. The latest index was released Tuesday.

Year-over-year average prices were still down 12 percent in July, though that gap has started shrinking in recent months.

Nationally the 20-city index was up 1 percent from June, with Atlanta and 17 other cities posting gains and only Las Vegas and Seattle falling. The national index was still down 13.3 percent from July 2008, however.

In metro Atlanta the average home price has recovered to levels last seen in February and, prior to that, in May 2001. But prices remain 20 percent below the peak in June 2007.

While prices could drop again due to further spikes in foreclosures or other economic events, last week's flooding in parts of metro Atlanta should not have much effect overall, one economist said.

The flood devastated some communities, but the damage was not so widespread that regional housing prices would be affected, said Roger Tutterow professor of economics at Mercer University's Stetson School of Business.

Many experts believe home prices bottomed this summer after two years of decline. But they will be closely watching the market over the next two months as the first-time homebuyer federal tax credit, worth up to $8,000, is set to expire Nov. 30.

"We do need to be cautious in coming months to assess whether the housing market will weather the expiration of the federal first-time buyer's tax credit in November, anticipated higher unemployment rates and a possible increase in foreclosures," said David M. Blitzer, committee chairman for the Case-Shiller index.

While the index provides a big-picture view of prices in metro areas, price and sales trends within metro Atlanta vary wildly depending on conditions in specific counties and cities.

The Case Shiller index measures the residential housing market and tracks changes in the value of the residential real estate market through a repeat sales pricing technique, according to a methodology report.

The technique involves compiling data on "properties that have sold at least twice, in order to capture the true appreciated value of each specific sales unit," the report says.