Foreclosures down by more than half for year

Foreclosure notices in metro Atlanta have fallen sharply for the year so far, despite a rise this month that stemmed from a longer filing period.

The latest numbers, released Monday, showed 16,322 notices through July, compared with 33,771 for the same seven months of 2013.

“In the big picture, I think our local economy and local real estate market are much healthier than they were,” said Charles Crawford, Jr., president and chief executive of the Private Bank of Buckhead. “I am encouraged by the numbers I see.”

There were 2,430 foreclosure notices in metro Atlanta in July, according to the monthly report by Equity Depot. That is up from 2,054 in June and 2,104 in May, but far below the 5,200 reported in July of a year ago. This year there was essentially an extra week for lenders to issue notices, due to the calendar.

“(A rise) is normal with a ‘long’ period (of) five weeks between auctions,” said Barry Bramlett, president and CEO of the Kennesaw-based research firm.. “The numbers are still down and we don’t have any indication that will change in the coming months.”

July notices are for auctions on county courthouse steps that would take place next month. Many foreclosure notices do not get that far, however. Lenders sometimes negotiate with homeowners and foreclosure proceedings can get postponed or withdrawn.

While positive, this year’s sharp decline may paint a picture that is slightly rosier than reality, said Dan Immergluck, a professor at Georgia Tech’s School of City and Regional Planning. Many – perhaps one-third or more of those who hold mortgages — are “underwater” because their homes would fetch less than what they still owe on their mortgages.

They may be able to make mortgage payments, but they remain vulnerable. The stress is not spread evenly, because home values vary wildly by neighborhood, he said.

“School quality has always been important in Atlanta, but it is even more important right now,” Immergluck said. “So we have lots of neighborhoods where 30 or 40 percent of the homeowners are underwater and we have lots of neighborhoods where essentially nobody is.”

Since the housing bubble burst in 2006 and 2007, an estimated 5 million Americans have lost their home to foreclosure.

Metro Atlanta had been among the leaders during the frenetic construction during the housing bubble and it was among the leaders in foreclosures after the bust. Foreclosures matter even to those not directly affected, as they pull down home values in the surrounding area.

The damage caused by the housing bust rippled through the region’s entire economy, as tens of thousands of jobs disappeared.

Atlanta’s housing recovery has been slow because its economic growth has been sluggish, said James Kau, professor in the real estate program at the University of Georgia Terry College of Business. “Our past levels of 4 or 5 percent growth (per year) seem no longer possible in the future.”

The decline in foreclosures is evident in the sales market, where inventory is tight and prices are up, said Colette Barnett, a Gwinnett-based real estate agent for Redfin. “The market was just flooded with foreclosure sales two years ago. There are a lot more regular sales on the market now.”

Demand is also far below levels of years past, with credit still tight and the job market too weak to fuel past levels of mobility.

The market has a long way to go toward normal, if that can even be defined, said Charlotte Sears, president of Coldwell Banker Residential Brokerage, a residential real estate company.

“Who knows what a healthy market looks like? Who knows when we will see it? But we are moving in the right direction.”