Housing market suffers big setback

By David Markiewicz and Marcus K. Garner

The Atlanta Journal-Constitution

Retirees Burt and Deedy Cousar asked $549,000 for their four-bedroom, three-bathroom cluster home on a  pleasant cul-de-sac in Sandy Springs when they put it on the market two years ago. Today, it's listed at $399,000 and, still, no buyer.

"We put it on and the market just tanked," said Deedy. "Some things work out in life, and some things don't."

It's a sentiment shared by home sellers across metro Atlanta and the nation these days, and fresh data from the National Realtors Association on Tuesday cast new doubt on how soon, or how fully, the battered housing market will recover.

Nationally, sales of existing homes plunged in July to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas. One large factor: the expiration of federal tax credits aimed at pumping up the market.

Sales in July fell by more than 27 percent from June to a seasonally adjusted annual rate of 3.83 million, the Realtors group said Tuesday. It was the largest monthly drop on records dating back to 1968. Sales were also down 25 percent from July 2009.

In metro Atlanta, the year-over-year sales decline was a relatively mild 17.4 percent, fourth-lowest among 20 metro markets.

However, the the median price of existing single-family homes in metro Atlanta fell 11.4 percent, the biggest decline among those markets, from $132,800 in July 2009 to $117,700 last month. That reversed gains since March, when the median price was $113,600.

Nationally, the existing single-family home price was $183,400 in July, 0.9 percent above a year ago. Foreclosures have pulled down median prices in many markets.

But some showed price increases in July, including Boston, Dallas, Minneapolis, New York, Phoenix, Pittsburgh, Portland, San Antonio, San Diego, St. Louis and Washington, D.C. At the same time, Minneapolis had the biggest monthly sales volume decline -- an eye-popping 42 percent.

"Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired," said Lawrence Yun, chief economist for the Realtors association.  Since the deadline passed, he said, "contract signings have been notably lower and a pause period for home sales is likely to last through September."

He said, however, that with low mortgage interest rates, and with housing more affordable, sales could pick up quickly if the job market rebounds.

While the numbers may look dramatic, not everyone sees despair.

“The year ago price was sort of a spike and, sure, this new number is thin. (But) I would be careful about looking too hard at this result,” said Walter Molony, spokesman for the Realtors association.

NAR doesn’t track historical data on a monthly basis, Molony said.

With sales lagging and prices plummeting, some home owners are considering taking their homes off the market.

Robert Potts of Union City, has had a two-bedroom ranch in Union City on the market since last Christmas. He started out asking $55,000. He's down to $39,000.

He's renting it and said, "I'm really considering pulling it off the market until the market gets better. Otherwise I'm just giving it away."

Tom Cowdrey and his wife, Susan, put their 2,300 square foot three-bedroom, two-bathroom house in Woodstock on the market around Memorial Day this year and are negotiating with a potential buyer.

The Cowdreys bought their house in 1995 for $110,000 and listed it at $170,000. That figure, he said, represents a "happy medium" between what they'd like to get (somewhere in the mid-$190,000s) and what a distressed sale might bring.

"There's no question the whole housing market issue has devalued the prices of houses everywhere, including ours," he said. "It's such a buyer's market."

The Cowdreys who are retired, plan to move to be with family in Virginia. They say they're not desperate to sell and that, "We feel we (have done) as well as we could have."

Chris and Robyn Fowler are on their third real estate agent and have cut the asking price on their Smyrna townhome from $240,000 a year and a half ago to $198,500.

The couple wants to move to Peachtree City to cut their work commutes and be closer to family. They thought their $220,000 purchase four and a half years ago was a good investment but, now, he said, "I don't see the economy getting any better. It's frustrating."

The couple figures to lose tens of thousands when they sell and will have to borrow from parents to do a deal.

"Two years ago," he said, "I didn't see this coming.  It's not pretty."

Said Steve Palm, president of Marietta-based SmartNumbers,  a real estate data company, "As far as price, there are people who are desperate to sell and will sell at any cost, which is why we see the price drop."

Real estate agents are frustrated, too.

"Loans are harder to get, but with a 4.5 percent interest rate, I'm thinking, ‘What's making people so hesitant?' " said Beth Johnson, a broker for ReMax Legacy in Fayette County.

"The security is what's missing," she added. "People are scared to move up, scared to purchase a house right now. I don't care how many incentives we throw out there at them."

-- Michelle E. Shaw contributed to this article.