Home prices fell much more sharply in metro Atlanta than in other U.S. cities in February, dragging the region’s average to 1996 levels, according to a widely watched survey.
Metro Atlanta prices dropped for the seventh straight month in the Case-Shiller Home Price Indices report, which tracks 20 metro areas. The average annual decline for all cities in February was 3.5 percent. For metro Atlanta it was 17.3 percent -- double the decline in Las Vegas, the next worst city.
“Atlanta continued its downward spiral, posting its (steepest) annual rate of decline in the 20-year history of the index . . .,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices.
The survey gives a big picture view, while real estate experts note that price trends depend heavily on specific location. They also say dropping inventory and the state’s falling unemployment rate are positive signs.
“I know in the first quarter we established a new bottom, but the numbers toward the end were more stable,” said Steve Palm of SmartNumbers, a Marietta real estate data firm. “New construction is up 20 percent. I think April is going to be the truth-telling month in our market.”
The Case-Shiller report uses repeat sales to arrive at an index figure based on a value of 100 for January 2000. Metro Atlanta’s index peaked at just over 136 in mid-2007, dropped when the housing bubble burst and then stabilized just above 100. But Atlanta’s index dropped below 100 last September and has slid further each month since.
In February it reached the lowest level since October 1996.
Only one city in the Case-Shiller report -- Detroit -- had a lower index than Atlanta in February, although nine of the 20 posted new post-housing bubble lows, Blitzer said.
Experts say the biggest culprit in Atlanta’s recent slide is the effect of foreclosures and other low-priced distress sales. Georgia has been a top-five state for foreclosures and about half of all home sales in 2011 were foreclosed properties.
Georgia’s higher than average state unemployment rate left consumers feeling less confident about buying, and lending has been tightened. Some homeowners who want to move are not putting homes on the market to avoid taking a low price.
Experts believe all that leaves a large percentage of the for-sale inventory as the low end of the price scale.
“You have more transactions under $125,000 than I have ever seen before,” said Dan Forsman, president of Prudential Georgia Realty.
Any light in the market is coming from sales numbers since February, which have ticked up, and by inventory levels as low as they have been since the beginning of the recession. The drop in Georgia’s jobless rate to 9 percent is expected to eventually boost home buying or at least help some homeowners avoid foreclosure.
Forsman noted that the Case-Shiller numbers track sales in 28 counties in metro Atlanta, as far-flung as Pike and Carroll counties, and that some neighborhoods show bright spots. Most are in an upside-down triangle starting in Atlanta and going north between I-75 and I-85.
“You go into Buckhead, North Fulton, East Cobb, you don’t get a 17 percent drop. You maybe get a flat price or maybe a little appreciation,” Forsman said.
An Atlanta Board of Realtors monthly sales reports show the median home sale price in metro Atlanta’s 10 central counties increased in both February and March. The March median price of $124,900 was still down 1.7 percent from March 2011, but the number is “going in the right direction,” from January, board president Mitch Kaminer said.
Beth Hawks lived in the triangle of north metro Atlanta and is coming out OK on the pending sale of her home. The Brookhaven-area woman should close on her house this week and expects to make money.
She listed her split-level home at $425,000 last year, became discouraged by desperate agents and uninterested buyers and took it off the market for the winter while making upgrades. She re-listed in March – this time at $420,000 – and had a deal within a month for $406,000.
Hawks, 45, said she has lived below her means for years and could absorb the lower price. More important, she didn’t expect miracles in this housing climate.
“It’s never going to be what it was, and I think we all need to [realize] the way the economy was a few years ago was just not realistic. It was very false,” she said. “I look at it as a readjustment of the market.”
Guy Bullock is all too familiar with that readjustment. As a homebuilder and developer, the recession first cost him his industry, and then almost his house.
His four-bedroom Alpharetta home sat on the market nearly all of last year. One potential offer of $585,000 would have left him with a $80,000 loss, he said. By last fall, Bullock realized the market wasn’t improving and decided to rent out his property.
“I wish I was smarter and had done it sooner,” said Bullock, 48, who now lives with relatives in Dunwoody.
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