DOUBLE-DIGIT DROP: PRICES FALL FOR ATLANTA HOMES

Metro Atlanta home prices took a record double-digit tumble in the year ending in October, according to a closely watched 20-city index released Tuesday.

With an average price drop of 10.5 percent for existing single-family houses, Atlanta joined 13 other cities experiencing double-digit declines. It was the metro area’s first annual double-digit drop since the index started reporting Atlanta data in 1991.

The metro area also posted a record month-to-month decline of 2.4 percent.

“The only thing selling is foreclosures if you’re on the south side of town,” said Rita Hutson, an associate broker at Metrobrokers/GMAC Real Estate. “It has absolutely gotten worse.”

She said people are reconsidering personal decisions such as job changes because they can’t sell their homes.

Shea Zimmerman, senior vice president and managing broker at the Harry Norman Realtors office in east Cobb, said her region has faced a slightly better situation with price drops of about 7 or 8 percent, thanks to a strong school system that has kept home values from falling too far.

Consumers are simply putting off all large purchases until the economy improves, Zimmerman said.

“There’s really no reason not to buy,” she said. “They’re really just not comfortable yet.”

Across the country, home prices fell faster than ever in October, providing fresh evidence that the nationwide housing slump was nowhere near an end. The Standard & Poor’s/Case-Shiller index of home prices in 20 major metropolitan areas reported an 18 percent dive over the previous year, marking 22 consecutive months of price drops.

Phoenix posted the worst decline in the new report, with home prices falling 32.7 percent. In all, 14 of the survey’s 20 cities showed annual declines of 10 percent or more, in each case a record rate.

For the seventh month in a row, no city in the survey saw prices increase, and six metro areas recorded their worst monthly price declines on record. Besides Atlanta, they were Charlotte; Detroit; Minneapolis; Tampa; and Washington, D.C.

Dallas fared best in the survey, with an annual price decline of 3 percent.

Since the index’s peak in July 2006, overall home values have dropped 23.4 percent.

“The bear market continues, with home prices back to their March 2004 levels,” David M. Blitzer, chairman of S&P’s Index Committee, said in a statement.

Patrick Newport, an economist at the research firm IHS Global Insight, said the collapse of Lehman Brothers in September and other crises on Wall Street helped spark the sharper October decline in home prices.

He predicted that prices will continue to fall as gains from the housing boom earlier in the decade are erased.

“Just as it overshot on the way up, it’s going to overshoot on the way down,” he said.

Karl Case, co-creator of the Case-Shiller index, said in an interview with Bloomberg News that Florida is one of four states —- along with California, Nevada and Arizona —- that have 54 percent of the country’s foreclosure sales, dragging down the overall price index.

“If we can get these four states isolated, and not have it infect the rest of the economy as bad as some people think it might, we can see some stability in the coming year,” he said.

Jack McCabe, a real estate analyst in Deerfield Beach, Fla., one of the hardest-hit states, said the federal government needs to allocate taxpayer money specifically for refinancing home loans, or even more people will have mortgages larger than the current value of their home.

“The federal government has been working from the top down instead of the bottom up,” he said.

Still, Jim Alexander, the incoming president of Atlanta Bureau of Realtors, said he is optimistic about Atlanta’s prospects in the new year. He hopes low interest rates and bargain prices will set the stage for more sales.

“I’m still very happy to be selling in Atlanta,” he said.

 JEMAL R. BRINSON / Staff
ATLANTA HOME PRICE INDEX 
Line graph tracks index from Oct. 2006 to Oct. 2008.
Oct. 2007: 133.86 
Oct. 2008: 119.77 
Down: 10.5% 
—-
HOME PRICE INDEX 
The S&P/Case-Shiller Home Price Indices measure the market for re-sales of single-family homes. They track the difference between the new sale price and previous one for each home, then aggregate those figures for all homes sold in one region into a score, or index. The final scores are weighted for various factors such as remodeling and time between sales. Case-Shiller studies 20 major metropolitan areas.

Bottom 3 
Phoenix
Oct. '07: 200.72 
Oct. '08: 135.18 
Down: 32.7% 
—-
Las Vegas
Oct. '07: 208.68 
Oct. '08: 142.57 
Down: 31.7% 
—-
San Francisco
Oct. '07: 202.03 
Oct. '08: 139.44
Down: 31% 
—-
Top 3 
Dallas 
Oct. '07: 124.38 
Oct. '08: 120.6 
Down: 3%
—-
Charlotte 
Oct. '07: 133.98 
Oct. '08: 128.02 
Down: 4.4%  
—-
Denver 
Oct. '07: 136.09 
Oct. '08: 129.05 
Down: 5.2% 
Source: S&P/Case-Shiller 

 HOUSE POOR 
City, monthly price change, annual price change: 
Atlanta ........-2.4%....-10.5% 
Boston..........-1.1% ....-6.0% 
Charlotte ......-1.8% ....-4.4% 
Chicago ........-1.6%....-10.8% 
Cleveland ......-1.0% ....-6.2% 
Dallas..........-1.1% ....-3.0% 
Denver..........-1.5% ....-5.2% 
Detroit ........-4.5%....-20.4% 
Las Vegas ......-2.7%....-31.7% 
Los Angeles ....-2.6%....-27.9% 
Miami ..........-3.0%....-29.0% 
Minneapolis ....-3.4%....-16.3% 
New York........-0.9% ....-7.5% 
Phoenix ........-3.3%....-32.7% 
Portland........-1.9%....-10.1% 
San Diego ......-3.0%....-26.7% 
San Francisco ..-4.2%....-31.0% 
Seattle ........-1.4%....-10.2% 
Tampa ..........-3.4%....-19.8% 
Washington......-2.7%....-18.7% 
Source: Standard and Poor's