Atlanta’s housing market suffered a slight setback after showing sustained signs of bouncing back from the nation’s epic recession, an analysis of home prices released Wednesday showed.
Home prices dipped downward in October after months of improvement, according to the closely-watched Case-Shiller index. The decline was only about 0.4 percent from September, but it was nonetheless discouraging news for a housing market that seemed to be recovering from the recessionary collapse. Prices had increased for six straight months before the latest numbers.
Another sign of how far the local market has yet to go: Atlanta and Detroit remain the only major American cities where home prices are stuck stubbornly below their January 2000 levels. Las Vegas, long a member of that inauspicious club, shook off that distinction in October.
The news was better when viewed from a broader lens. Atlanta’s home prices were up about 5 percent from the same time last year, partly because of a steep decline in home prices in late 2011.
Housing is a key driver of metro Atlanta’s economy, and the region’s ongoing real estate problems are fueled by a low inventory of homes for sale and an abundance of “underwater” homeowners who owe more on their houses than what they’re worth. Analysts said the market’s biggest burden, though, is the high number of foreclosures that clog the housing system. Georgia had the nation’s eighth-highest foreclosure rate in November, according to the RealtyTrac research firm.
“For a period of time in late 2011 and a good chunk of time this year, Atlanta had wave after wave of foreclosures so you had a lot of houses selling at depressed prices,” said David Blitzer, who chairs the Index Committee at S&P Dow Jones Indices.
Still, the region is on a long slog toward recovery, he said, “unless there’s another tidal wave of foreclosures.”
All of the nation’s 20 largest cities, which includes Atlanta, suffered a smaller dip in home prices from September to October, with the data showing home prices fell about 0.1 percent. Home prices were up about 4 percent from the same time last year, according to the report, an indication that the broader market is gathering strength.
Atlanta still has a ways to go to catch up with many other major cities, where home values remain solidly above 2000 levels. The index shows that home prices here are lower than they were in May 1999. And economists say the uncertainty surrounding the fate of the fiscal cliff also could bog down the national housing recovery.
Many local real estate agents say the demand and the prices are going up in popular intown neighborhoods and well-to-do suburbs in high-achieving school districts. But the limited supply of homes in these areas has a subdued impact on the average overall price for the metro area.
“My personal experience is that, as job confidence grows and interest rates stay lower than we’ve seen in 40-plus years, homes will sell quickly in Atlanta,” said Robbin Smith, a Keller Williams realtor in Atlanta.
The frustratingly low levels of inventory also could have a positive side effect, said Tommy Williams, who runs Atlanta’s TomWillSell brokerage. He said the bidding wars generated by the limited supply of homes eventually could help boost home prices back to pre-recession levels.
You don’t have to tell Tiffany Sharpe how competitive even a sluggish home market can be. She put offers on six houses in the past year and lost each one. So when she found a three-bedroom house in a quiet McDonough neighborhood, she put in an aggressive offer that was finally accepted.
“It seems like the market’s getting better,” she said. “This time, I had to be prepared.”
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