Home prices continue wrong-way trend

By Michelle E. Shaw

The Atlanta Journal-Constitution

The stabilizing housing market many experts saw a year ago seems to have been built on sand.

New data released Tuesday showed another monthly decline in home prices, with values in metro Atlanta and 10 other markets falling to new lows since the housing bubble burst in 2006 and 2007.

Metro Atlanta values were down 8 percent in December from the same month in2009, according to the Standard & Poor’s Case-Shiller Index. The decline continues a trend that began in the summer, following a mild recovery spurred by homebuyer tax credits.

The metro region is now 26.7 percent below its July 2007 index peak.

“Despite improvements in the overall economy, housing continues to drift lower and weaker,” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.

Nationally, the 20-city composite index fell 2.3 percent.

What happened in 2010 was not what real estate experts -- and homeowners -- hoped for. In December 2009, the index for metro Atlanta fell 3.8 percent from the same month the year before -- the smallest decrease since December 2007.

Experts hoped that signaled stability, but the index continued to fall into March. Then, last April, the metro area posted its first year-over-year gain in 30 months as the tax credit spurred sales, which bolstered pricing.

By July prices began to fall again year-over-year, and they haven’t stopped.

Still, local real estate agents are encouraged by what they’ve seen early in 2011, said Wight Mixon, president of the Atlanta Board of Realtors.

“From a calendar perspective Spring is not officially here yet, but I can tell you that from a real estate perspective, it is,” she said. “We are seeing an increase in activity as new listings are coming on the market and, when priced well and in good condition, are going under contract quickly.”

Charles McMillion, an economist with MBG Information Services, said the damage in metro Atlanta has been severe.

“To appreciate the full brunt of the reverse wealth effect in Atlanta and across the U.S., it’s important to look at five and especially ten year periods,” said McMillion.

Atlanta area home prices are down 23.3 percent over the five years ending December 2010. Nationwide prices are down even more, 29.5 percent, McMillion said.

But the 10-year look shows metro Atlanta prices down 6 percent and national prices up 27.6 percent.

“Phoenix, Cleveland and Las Vegas also suffered a decade-long decline in home prices but these are less than in Atlanta,” he said. “Only Detroit, where home prices plunged by 38.3 percent over the decade, suffered a worse decade-long decline in home prices than Atlanta.”

The Case-Shiller Index, a widely watched housing market barometer, tracks properties sold over time rather than individual home sales, and it measures value from a baseline in 2000.