Foreclosure notices fall 49 percent so far in ‘14

Foreclosure notices in metro Atlanta for the first four months of the year fell by nearly half from the same period of 2013, contributing to tight inventory that has lifted prices.

The latest figures show 9,734 notices through the April filing deadline, a 49.7 percent plunge from last year. That continues a series of sharp year-over-year declines that began last year and have driven foreclosure levels back to pre-housing bust levels.

Notices for April alone rose a bit, to 2,635 from 2,234 in March, but that was due to extra days in the filing period.

“It increased this month but that’s normal as this was a five-week period between auctions,” said Barry Bramlett, CEO of Kennesaw-based Equity Depot, which compiles figures. “That happens a few times a year and it creates a bit of a bump.”

Notice of foreclosure does not mean a homeowner will not make up what he or she owes and prevent the home being sold the next month at auction. A precise count of the actual foreclosures is not available, but Bramlett estimates that roughly half are sold. The number of notices is still seen as a general barometer of stress in the housing market – as well as in the economy.

Bramlett cautioned that delinquent loans are still at 2008 levels, despite the decline in foreclosure notices. That means lenders and hedge funds may be bundling and trading some of those loans, or using short sales to dispose of property without foreclosure.

“Something is happening and it’s hard to tell exactly what,” Bramlett said. “Nobody knows how much of an illusion it is.”

Still, foreclosure numbers seem to give a hint of the future.

A spike in notices, as happened in 2008 and 2009, will pour inventory on the market, give buyers more choices and dampen prices.

As foreclosures decrease, that can have the opposite impact – pushing prices higher – unless other factors add more sellers to the market.

That’s where the area’s housing market is, said Ennis Antoine, president-elect of the Atlanta Board of Realtors.

“What we see are inventory levels that are still at an all-time low. And we are entering into the peak season, so we are seeing an influx of buyers coming into the market.”

Prices in metro Atlanta rose more than 18 percent in 2013, according to the S&P Case-Shiller Home Price Index.

Higher prices are good for sellers, of course, as well as for owners who might want to refinance and trade equity in the home for cash. But when prices rise faster than incomes, it can shut out potential purchasers.

Zillow, a real estate research and sales company, recently calculated affordability for the nation’s largest cities based on media home prices and the proportion of median income needed for monthly payments.

About 37 percent of metro Atlanta homes would require higher payments than in the pre-bubble years, according to Zillow. That study found the nation’s least affordable market to be Miami, where 62 percent of homes are in that category.

Gwinnett County has led the region in foreclosures each year since 2008. At the peak in 2010, Gwinnett suffered 26,502 foreclosures – including 1,845 during April. This month Gwinnett still led the region, but with just 482 notices, down 45 percent from a year earlier.