Like an ocean liner making a languid u-turn, metro Atlanta home prices continued their slow course correction in August, according to the widely watched Standard & Poor’s Case-Shiller index.
Average prices in the region edged 1 percent higher for the month, following a 2.3 percent increase in July.
Even with the improvement, prices are still 10.6 percent below where they stood a year ago. And once adjusted for seasonal trends, the slight improvement is even slighter – but still positive: Up 0.5 percent for August and 1.6 percent for July.
It’s the third straight month that metro Atlanta’s adjusted price has ticked up, paralleling the national market, according to the index.
The yawning gap between this year’s prices and those of a year ago has started to narrow. Prices in the 20 largest markets are down 11.3 percent from a year ago, yet 19 -- all but Cleveland -- improved modestly in August.
“Broadly speaking, the rate of annual decline in home price values continues to improve” says David M. Blitzer, chairman of Standard & Poor’s Index Committee.
Home sales have had some extra propulsion from the $8,000 federal tax credit for first-time homebuyers, set to which will expire in December. Various proposals, including one from Sen. Johnny Isakson (R-Ga.), call for extending and even enlarging the program.
Thus far, Between 350,000 and 400,000 homebuyers have been added to the market because of the credit, according to the National Association of Realtors.
“I am positive that it has had an effect here,” said Bob Hamilton, chief executive of the Georgia Association of Realtors. “You are seeing first-time homebuyers coming out of the woodwork.”
Georgia represents 3.5 percent of the nation’s home sales, which would roughly translate to 12,250 to 14,000 of the new homebuyers drawn by the credit. The Georgia Realtors group is conducting a survey intended to produce an estimate for how many were here, Hamilton said.
But many prospective homebuyers cannot close the deal, said Steve Palm, president of Marietta-based SmartNumbers, which tracks housing data.
“Loans are blowing up. They are not getting financing,” he said.
Palm said his firm’s September data shows the market floundering, he said. “Permits were down, closings were down and price was flat from August. We have been in a three-year housing recession and we are not coming out of this yet.”
Foreclosures remain a drag on the market, pouring lower-priced homes into the for-sale category and dampening values of their neighbors.
The region’s woes came after years of leading the nation in new homebuilding and seeing healthy price hikes year after year. But when the boom went bust, Atlanta’s market fell proportionally more than most other metro areas.
Nationally, home prices are at levels reached in 2003, according to Case-Shiller. Prices in Atlanta fell farther than average and, even after the recent improvement, are only back to the levels of January 2002.
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