Atlanta home prices drop 12.1%, to 2002 levels

Resale prices of metro Atlanta homes continue to slide and are now back to summer 2002 levels, the latest Standard & Poor’s Case-Shiller Index shows.

By that measure many Atlanta homeowners are worse off than residents in bubble cities like Miami, Phoenix and Las Vegas, where current prices have fallen to 2004 and 2003 levels after steep increases.

Atlanta ranks fifth worst in the nation behind only Detroit, Cleveland, San Francisco and Minneapolis. Prices in Detroit have reached 1997 levels.

The national price average for 20 cities has returned to third quarter 2003 levels, which is not as bad as Atlanta, according to the index.

Local prices fell 2.3 percent from November to December, and 12.1 percent in a year’s time.

Looking strictly at percentages, that’s better than the nation as a whole. Case-Shiller’s 20-city index shows a record 18.5 percent price slump over 12 months.

The third quarter to fourth quarter decline was 7.2 percent in Atlanta — the same as the national average but much steeper than Atlanta’s previous quarterly decline of 1.5 percent.

“Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines, and eight of those [metropolitan statistical areas] now with negative rates exceeding 20 percent,” David M. Blitzer, chairman of S&P’s index committee, said.

Dana Bauguss, president-elect of the Georgia Association of Realtors, said the metro area’s price decline is “not surprising because of so many foreclosures and bank-owned properties that have come on the market.”

Bauguss manages two real estate offices in Gwinnett County with 116 employees. She said business is picking up but that’s due in large part to bargain hunters snapping up foreclosures. One agent brought in 30 sales contracts on foreclosed properties this month, Bauguss said.

Declining home values make it harder for homeowners to qualify for refinancing. Bauguss said the real estate community hopes government incentives announced last week to encourage loan modifications and short sales over foreclosures will buoy the market.

The Homeowner Affordability and Stability Plan provides money for mortgage holders, mortgage servicers and borrowers in order to stem foreclosures.

“Once we get the foreclosures off the market, it will help the normal resales,” Bauguss said.

Resale prices peaked nationally in the second quarter of 2006 and locally in the summer of 2007, according to Case-Shiller. Since then, average prices have fallen 27 percent nationally. Locally, the index has fallen 16.6 percent since the peak.

The biggest percentage declines year-over-year were in Phoenix, 34 percent; Las Vegas, 33 percent; and San Francisco, 31.2 percent, the index shows. Since the 2006 market peak, Las Vegas, Miami, Phoenix and San Francico have all seen drops in excess of 40 percent.

But, of those, only San Francisco prices reach back farther than Atlanta’s, to March 2002.

— Staff writer Michael Kanell contributed to this report