Metro Atlanta home prices hold steady

A widely watched indicator of home prices shows values in metro Atlanta held steady during the second quarter, just above the decade-long bottom they hit last winter.

The Standard & Poor's Case-Shiller index of 20 metropolitan areas shows Atlanta prices up 3.6 percent, but when adjusted for the typical busy home-shopping season of early summer, it is up only 0.1 percent.

Though prices have increased three months in a row, they remain lower than they were this time last year.

"This month's report showed mixed signals for a recovery in home prices," said David M. Blitzer, chairman of the index committee at S&P Indices. "No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates."

That reflects what local experts see.

"There are bright spots, but overall the market remains bad," Steve Palm of Marietta's SmartNumbers said.

"Year-over-year closings will be up but prices down," he said.

His numbers show closing prices in July, which will be the first month of the third quarter, averaged $181,975, which is 13.7 percent below the average price in July 2010.

Daniel Forsman, the CEO of Prudential Georgia Realty, one of metro Atlanta's largest real estate firms, said it had 4,364 closings by this time last year. The firm had 4,788 as of Monday.

"That is a 9.7 percent increase, so our sales are up," he said.

"I think that has to do with lower prices and low interest rates," Forsman said.

But sales prices are flat, he said.

He thinks low interest rates and prices will drive Atlanta's resurgence beginning in 12 to 18 months.

"I think we are going to see a lot of activity in the entry levels, and I think we are going to see a substantial increase in higher price points driven by two things, low interest rates and a higher level of consumer confidence," he said.

It will take a while to get the foreclosures absorbed, he said. A large number of foreclosures is one reason metro Atlanta has become an investment hot spot.

Investors from individuals to international firms have been buying up houses and apartments.

Tuesday, Kinloch Partners became the latest to join, announcing a $10 million investment fund targeting south metro Atlanta homes.

The Case-Shiller index set a value of 100 for home prices in 20 metropolitan areas in January 2000 and has measured price rises and dips by that benchmark. Metro Atlanta home values peaked in July 2007 at 136.47, which means values had appreciated 36.7 percent. The Atlanta index dropped to 100.33 in January and stood at 104.33 in June.