WHY IT MATTERS
Foreclosures can hurt home values, which are important even to people who aren’t likely to sell or buy anytime soon. Home values contribute to the so-called “wealth effect” that helps drive the broader economy by making people more confident about purchases of all types.
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Foreclosure notices continue to decrease this year, after hitting their peak in 2010.
Year…..Foreclosure notices through February…..Percent change
2002…..4,492…..up 47.3 percent
2003…..5,616…..up 25 percent
2004…..6,234…..up 11 percent
2005…..5,979…..down 4.1 percent
2006…..7,682…..up 28.5 percent
2007…..8,972…..up 16.8 percent
2008…..12,969…..up 44.5 percent
2009…..16,126…..up 24.3 percent
2010…..18,499…..up 14.7 percent
2011…..20,962…..up 13.3 percent
2012…..17,195…..down 18 percent
2013…..10,123…..down 41.1 percent
2014…..4,865…..down 51.9 percent
Foreclosure notices in metro Atlanta are down nearly 50 percent from a year ago, continuing a decline from the 2010 peak.
While the improvement is in line with a housing market that continues to get better as prices rise, the numbers may mask continuing problems in the market.
“The distress is there,” said Daren Blomquist, vice president at RealtyTrac. “It’s just being dealt with in a different way.”
There were 2,411 foreclosure notices filed in a 13-county metro Atlanta area in February, according to data from Kennesaw-based Equity Depot. That’s about even with January’s number, which was the lowest seen since June 2003, when 2,393 foreclosure notices were filed.
The February figure is down 46.8 percent from a year ago. If foreclosure notices continue at this pace, they will be down 42.8 percent from the 51,003 notices filed in 2013. The peak came in 2010 with 127,140 notices.
Barry Bramlett, whose firm compiles the numbers, said the improvement is “just an illusion.” The default rate is still high, he said.
“It looks like a strong economy,” he said. “It’s not.”
Blomquist said one-quarter of metro Atlantans homeowners with a mortgage are seriously underwater and owe more on their homes than they are worth. That’s higher than the national average, 19 percent. Those homeowners are hindered from participating in the recovery because if they sold their homes, it would be for a loss.
They are also at higher risk for falling into foreclosure in the future, Blomquist said, if the economy hits another stumbling block, or their job situation changes.
Blomquist said a higher portion of metro Atlanta’s sales continue to come from foreclosed properties. In December, 1.2 percent of homes nationally were purchased at foreclosure auctions, he said, as compared to 4.7 percent in metro Atlanta.
Banks may also be shifting some foreclosure inventory by selling nonperforming loans to mortgage servicers when the loans are delinquent, but before the foreclosure process begins, he said. Those servicers may have more patience and more money to work with borrowers, Blomquist said.
Some may still end up losing their homes to foreclosure, he said, but he added Atlanta’s market is improving.
“The foreclosure activity is telling us that things are getting back to normal,” he said.
Todd Emerson, president of the Atlanta Board of Realtors, said he expects the figures to stay low. As the economy improves and new jobs are created, he said, more people are able to pay their mortgages.
With inventory low, he expects a busy spring home-buying season that rivals the frenzied market of 2013. Emerson said low foreclosure numbers give more people the confidence to list.
“It only helps home values,” he said.
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