WHY IT MATTERS
Foreclosures can hurt home values, which are important even to people who aren’t likely to sell or buy 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.
Foreclosure notices have fallen year-over-year in May across the metro region.
County…..May 2014 foreclosure notices…..May 2013 foreclosure notices…..Percent change
Bartow…..55…..100…..down 45 percent
Cherokee…..89…..172…..down 48.3 percent
Clayton…..206…..531…..down 61.2 percent
Cobb…..263…..551…..down 52.3 percent
DeKalb…..354…..834…..down 57.6 percent
Douglas…..82…..152…..down 46.1 percent
Fayette…..39…..77…..down 49.4 percent
Forsyth…..45…..124…..down 63.7 percent
Fulton…..335…..822…..down 59.2 percent
Gwinnett…..384…..847…..down 54.7 percent
Hall…..60…..148…..down 59.5 percent
Henry…..133…..296…..down 55.1 percent
Rockdale…..59…..97…..down 39.2 percent
13-county total…..2,104…..4,751…..down 55.7 percent
Foreclosure notices in metro Atlanta hit a new post-recession low in May, falling to a level unseen since June 2002.
The continued nosedive suggests the wave of distressed housing that pulled prices down has largely abated. But it also contributes to a different issue: A lack of homes on the market. A dearth of for-sale homes is driving up prices and leaving fewer choices for those who want to buy.
The notices — sent before a foreclosure takes place — have been steadily dropping since the 2010 peak. In May of that year, there were 9,587 foreclosure notices filed; this year, there were 2,104.
The May figure, released Monday, was a 55.7 percent drop from the year before.
Fewer foreclosures is good for the economy and the local housing market. Too many foreclosures bring down prices and discourage people from moving into a community. When foreclosures ease, prices rise.
“Appraisers aren’t going to have to concern themselves with using distressed sales as comps,” said Todd Emerson, president of the Atlanta Board of Realtors. “At the end of the day, we’ve cycled though the majority of our distressed inventory.”
At the same time, lack of inventory has been skewing the metro market in the other direction for the past year. Available homes are so scarce in desirable areas that nearly 20 percent of all homes for sale this spring aren’t being listed on databases, Emerson said. So while prices are up, sales aren’t following suit.
“We’re still below a normal level of houses listed for sale,” said Eugene James, Atlanta regional director of the housing information company Metrostudy. “Some people think the news is too good to be true.”
Barry Bramlett, whose Kennesaw firm Equity Depot compiles the foreclosure numbers, is among them.
Bramlett said delinquency rates don’t match foreclosure rates. The last time they were this low, he said, the economy was booming. While it has been improving since the recession, there is still a long road to normal.
“We are not in any kind of a good market,” he said. “It’s just a weird time in real estate.”
Bramlett said while the short-term benefit of rising prices is positive, he worries about the longer term.
“Nothing’s for sale,” he said. “I just don’t see things moving.”
Lisa Harris, a Realtor with Re/Max Center, said the lack of inventory means foreclosed houses are being bid up. With fewer foreclosures, people are increasingly willing to move into a new neighborhood. It means better values for their own for-sale houses.
But the inventory issues, she said, are “stressful” for buyers.
“I would have expected more homes to come to market faster,” she said. “The shortage in inventory is hurting buyers’ opportunities right now.”
March home sales were down 12.6 percent from the prior year — and fell in seven of the past eight months, according to the Atlanta Board of Realtors. Despite the impact on already-low inventory, James and others see the drop in foreclosure notices as more good news. As it compounds, James said, the result will be a lifting akin to what a series of bad news did to kick start problems in communities during the recession.
James said he still expects people to be wary of the improvements. But everything he sees points to lower foreclosures and continued higher prices.
“I think we still have some naysayers and some doubters out there,” he said. “I tell them to check into it themselves. It’s the only way to really convince people the coast is clear.”
James expects foreclosures to keep falling, but said the improvements are likely to level out soon. Emerson agreed, saying while there is still room for improvement, the worst of the foreclosure crisis is long past.
“We’re going to continue to see the trend of fewer and fewer foreclosures,” he said. “I think we’re probably getting close to the bottom. 2002 numbers, that’s doing pretty doggone well.”
