Housing market seeks ‘new normal’ as foreclosures fall

2004: 3,250

2005: 2,642

2006: 3,207

2007: 4,208

2008: 6,403

2009: 11,925

2010: 11,016

2011: 7,374

2012: 7,670

2013: 4,449

2014: 2,054

County breakdown, June 2014

Bartow: 45

Cherokee: 78

Clayton: 179

Cobb: 249

DeKalb: 352

Douglas: 94

Fayette: 19

Forsyth: 50

Fulton: 349

Gwinnett: 379

Hall: 69

Henry: 134

Rockdale: 57

Source: Equity Depot

Though foreclosure notices in metro Atlanta have tumbled to levels not seen since before the housing bubble expanded and then popped, the home market is not back to normal.

Experts are still figuring out what the new normal might be.

There were 2,054 June foreclosures listed in 13 counties stretching from Hall in the north to Fayette in the south, and from Douglas in the west to Gwinnett in the east. That compared to nearly 12,000 in June 2009 at the height of the housing crisis, according to numbers from Kennesaw’s Equity Depot.

The drop is another marker indicating a less-stressed housing market, but the market is not exactly healed. Though foreclosure numbers are back to normal levels and home prices continue to rise, there are not enough houses on the market during this spring season to satisfy demand.

Equity Depot’s Barry Bramlett said the market is very different from the years before the foreclosure crisis. Since then, investment firms have bought up thousands of foreclosed homes and rented them out and the percentage of Americans who own homes has dropped. Homes prices are rising but sales are flat.

“It’s just an odd time right now,” Bramlett said. “It’s a new animal. We’ve never come out of a bubble so bad, and we have never been in a situation where we’ve had this many properties that have changed hands. How will [the market] rebound, …I don’t know.”

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.

A normal housing market has a six- to seven-month supply of homes. At the end of April, there were 4.1 months worth, according to John Hunt, a senior analyst with the real estate analysis firm Smart Numbers.

Fewer homes for sale means more competition for those houses that do hit the market, which could be one of the reasons prices have been rising at double digit rates for more than a year.

Eugene James, regional director with the Atlanta office of of real-estate number crunchers Metrostudy, said 2002 is a good baseline to measure foreclosures. That was before the real estate bubble started building.

“And we’ve added about a million people have moved into the region since then. So if we are back to ‘02 levels and we have more people living in the region, we are better off than we were back then,” he said.

Still, the market is different now, he said.

Real estate investment firms bought up perhaps 5 to 6 percent of the housing market, taking those homes out of the buying and selling cycle. That has had some effect on the market, James said.

As prices fell through the Great Recession, many owners in metro Atlanta found themselves under water on their loans, meaning they owed more than the homes were worth and were unable to sell and move. CoreLogic, a California research firm, said about 40 percent of metro homeowners were under water.

That dropped to about 20 percent in their latest count, still a significant factor in limiting mobility and keeping homes off the market.

Lisa Harris, a Realtor with Re/Max Center, told the Atlanta Journal-Constitution last month: “I would have expected more homes to come to market faster. The shortage in inventory is hurting buyers’ opportunities right now.”