Despite a sluggish fall, the metro Atlanta housing market seems to have stabilized and made a decisive turn toward recovery – even if the improvement so far is modest, according to a much-watched report issued Tuesday.
Atlanta home values in November were 7.6 percent higher than a year earlier, according to the S&P/Case-Shiller Home Price report. Nationwide the Case-Shiller index rose 5.5 percent - the sharpest year-over-year gain since 2006 - with 19 of 20 cities posting gains.
While the Atlanta data covers the metro area, specific location is everything. Parts of the metro area were spectacularly overbuilt during the boom and are expected to take much longer to recover.
“In our area, you see houses that are good or great selling without 30 days – sometimes above the asking price,” said Zac Pasmanick, associate broker at RE/MAX Metro Atlanta CitySide, which markets properties in Atlanta and Decatur.
Matt Rhodes, a broker at The Forem, a Marietta-based real estate company, said he is skeptical about a quick resurgence – and the farther from the city, the more skeptical.
“There’s more traction inside 285. I think suburbia is in a different light. I think it’s going to bounce along the bottom,” he said.
Real estate around metro Atlanta led the boom following the 2001 recession, creating jobs in construction and services. When real estate crashed in 2007, it dragged the economy into its deepest hole since the Great Depression.
Metro Atlanta home prices bottomed last March, when they had dropped 39.5 percent from the peak, according to Case-Shiller.
Since then, Atlanta prices have gained 15.9 percent, with most of that increase coming earlier in 2012.
Even so, Atlanta prices are still roughly at the same level as they were in the spring of 1999. Only one other city in the Case-Shiller index, Detroit, remains below 2000 price levels.
That means that many homeowners who purchased homes since then are “underwater” – owing more on their homes than they could recoup in a sale.
CoreLogic estimates that roughly one-third of mortgage holders – tens of thousands of people in metro Atlanta – are underwater.
Most just keep making their monthly mortgage payments.
Stephanie Drake, 41, of Stone Mountain, has owned her house for 15 years and isn’t walking away. But she isn’t selling either.
“I’m underwater,” Drake said Tuesday. “A house foreclosed nearby (my home) and it’s dirt cheap. I figure my house is not worth more.”
The number of people who cannot keep paying the mortgage – because of layoffs or medical expenses or a decision to abandon the mortgage – is high, but it’s been shrinking, according to CoreLogic.
The flood of foreclosures made for an overflow of inventory – homes for sale – that kept prices depressed. Now, the inventory has shrunk dramatically, pushing up prices.
“There are just fewer homes on the market. It is good old-fashioned supply and demand,” said Jeanette Schneider, regional vice president of RE/MAX Regional Services.
As the economy improves, consumers who had put off home purchases are moving back into the market.
“We have a lot of pent-up demand,” Marc Takacs, broker at Keller Williams Realty, Atlanta Midtown.
Low mortgage rates help, though getting them can be tough, Takacs said.
“Maybe 10 percent don’t go through and another 10 or 15 percent take a lot of effort to get through,” he said.
Yet the trajectory is up.
“I think it’s a buyer’s market,” said Matt Anderson, 27, from Smyrna. “Interest rates are low – it is a great time to buy. If I could, I would buy now.”
Jason Roe, 21, of Norcross, said he won’t start looking until he has a family, but he smells opportunity. “I hope to buy a house while the market is the way it is now. There are a lot of cheaper houses and it is a good time to buy.”
Support real journalism. Support local journalism. Subscribe to The Atlanta Journal-Constitution today. See offers.
Your subscription to the Atlanta Journal-Constitution funds in-depth reporting and investigations that keep you informed. Thank you for supporting real journalism.