First of two parts: Our annual analysis tracks the sales of 43,000 houses in metro Atlanta in 2010, and the trend is still going in the same depressing direction. In one area the median price of a house was $15,250 — the median price! That means half the 260 houses sold there fetched less than that.
The stock market got its groove back. The economy found its pulse. But our biggest investment spent 2010 right were it spent 2009: in the tank.
Analysis from this year’s Atlanta Journal-Constitution Home Sales Report reveals that home values in metro Atlanta remain locked in a four-year slide as the pace of home sales sputtered. Five thousand fewer homes sold in nine metro counties last year than in 2009, accounting for a 9 percent drop. Those that did sell went for less than in 2009: Home prices fell 4.5 percent last year.
The market’s downward slide, which began with the 2007 subprime mortgage industry collapse, continues to vex even the most seasoned real estate veterans, with buyers, sellers and those on the fence asking, “Are we there yet?” And some who bought recently may already be feeling buyer’s remorse: Maybe this market has a false bottom; maybe my new house has already lost value.
“We’re only going to know we’ve hit bottom when it goes back up,” said Sandra McCrary, managing director of ReMax Advantage in Henry County. “If you’re a buyer, it’s fabulous. If you’re a seller, it’s not so good. I’ve been in real estate for 33 years and it’s probably the most challenging for people trying to sell homes.”
The Home Sales Report compares sales and prices by ZIP code in nine counties between 2009 and 2010, using data from Marietta-based real estate research firm SmartNumbers.
This year’s report includes good news for some parts of the metro area, though for the most part, the local market fought more downward momentum in 2010 despite the federal home buyer tax credit in place for part of the year:
● Intown home values rose while suburban home prices continued to slide. For example, prices of existing homes increased 7.5 percent to $625,000 in the Mount Paran/Northside area (ZIP: 30327), 13.9 percent to $380,000 in the 30306 ZIP of DeKalb, and 19 percent to $260,000 in the 30339 ZIP of Cobb that includes Vinings.
● Homes in the northern suburbs sold at a faster pace than other areas, though suburban home values continued to slide. Cherokee, Cobb, Forsyth and Gwinnett had increases in the number of existing homes sold. But prices decreased 17 percent to $126,500 in Cobb’s 30067; 11 percent to $135,250 around Woodstock in Cherokee’s 30188; and 15.8 percent to $80,000 around Norcross in Gwinnett’s 30071.
● Existing homes sold better than new homes. Across the nine counties, the number of new homes sold fell 27.3 percent. Existing home sales were down only 5.2 percent.
● Bargain-basement deals, a big part of the current inventory, continue to drive prices down. An analysis of nine metro counties using data from Marietta-based SmartNumbers found six ZIPs, all in Fulton, DeKalb and Clayton, where the median price of existing homes was $30,000 or less. One ZIP in Fulton’s Vine City had a median price of under $20,000. The analysis included the 130 ZIPs where 75 or more new or existing homes were sold in 2010.
The report, along with interviews with dozens of buyers, sellers, agents and experts, paints an uneven picture of the market. This much, however, is clear: Metro Atlanta’s housing market remains a big gamble.
This is a far cry from seven years ago when home sales began to increase 10 percent a year while median home prices grew about 5 percent a year. That ended in 2007, when home prices in the 20-county region went flat and home sales fell 22.3 percent.
The dicey market has left many in housing limbo.
Jeremy Craig decided not to buy a deeply discounted townhome in East Atlanta after he found it flooded just days before closing. He said he’ll rent for now while he reassesses if he really wants to buy in this climate.
Gib and Susie Amstutz, worried about plummeting prices in the neighborhood, are stuck in Woodstock with a $300,000, four-bedroom home when they’d rather move to Vinings.
2011 hasn’t started off much better. The median sale price for existing single-family homes in Atlanta dipped $22,700 to $98,100 in April, a stunning 18.8 percent drop compared to April of last year. The data, from the National Association of Realtors, also show April sales of such homes were down 5.9 percent compared to the same month a year ago.
Steve Palm of SmartNumbers puts it bluntly: “We’re back to almost 1997 prices. It’s just nasty. We’re not coming out of this for a while.”
Despite the allure of what appear to be good deals, buyers are still skittish.
Craig, who tried to buy the townhouse, said, “It was a really good house for the money in a good neighborhood, close in to downtown. No matter how many reassurances I get, I don’t think the house will ever be the same again.”
He canceled the closing, is trying to get his earnest money back and wonders all over again whether this is the best time to invest in a home. For now, he said, “We will rent intown, save up and bide our time.”
The report brought welcome news for intowners. The 30339 ZIP in Fulton around Vinings saw existing home prices zoom 63 percent to $328,700, for example.
Mary Anne Walser, an agent with Keller Williams Premiere Atlanta, sees high gas prices spurring some to move, nudging intown prices higher and some of the suburbs lower.
“I met with a couple last night that lives in Lawrenceville. Part of their equation is they want to move intown because they are sick of spending so much on gas,” she said.
She believes buyers continue to trade up to sought-after neighborhoods and school districts. But those who want to downsize fear losing too much value.
For Brittney Watson, a 22-year-old public relations associate, it was about being close to her job in Buckhead. She paid $109,000 for a two-bedroom, two-bathroom condo near Emory University, much less than what the previous owner paid. And it’s flush with amenities: pool, tennis courts, a park and covered parking.
While the purchase made her nervous, she’s counting on renting or selling it to Emory students or professors if she has to move.
Fulton County, which had the most transactions of all counties (13,459), registered the largest absolute decline in home sales: 2,103 fewer than in 2009, a 13.5 percent decline. Clayton had the largest percentage decline at 18 percent, or 763 fewer sales.
New home sales declined 27.3 percent in the nine counties. This served as more bad news for home builders who once were a major employer in the region.
With existing homes so cheap, many buyers don’t want to pay more for new homes.
“Who would have guessed a few years ago that an SUV would be more expensive to buy than a home?” asked Mike Wolf, cofounder and partner of French Wolf & Farr, an Atlanta-based investment advisory firm.
The 30314 ZIP, which includes Ashview Heights near Clark Atlanta University, registered the lowest median price last year: about $15,000.
Said Wolf: “We are now dealing with this vicious feedback loop in which falling prices lead to foreclosures, then foreclosures put downward pressure on prices. Then there are more foreclosures.”
All of this may leave those who bought after the bubble burst feeling buyer’s remorse, even when they originally thought they were getting a deal.
Yvette Walters, a teacher and single mother of two, cringed shortly after she moved into her $185,000, five-bedroom, three-bath home near Camp Creek Marketplace last year. She learned a woman bought a similar house on her street for $10,000 less.
But she could console herself with the knowledge she had paid $55,000 less than the previous owner of her home. And she didn’t need to make any improvements to it.
“I love my house. I love the location and the floor plan,” Walters said. “I’m still thrilled with it. It’s been a good experience.”
Anitra Jackson paid $118,000 for a four-bedroom home in Fairburn two years ago, but a recent appraisal came back $10,000 less. Instead of whining about it, she said, she was able to get her tax bill lowered by $56 a month.
Mark Scott, a 45-year-old public relations executive, said homeowner expectations are changing. People no longer are looking at their homes as ATMs.
He sold his East Atlanta Village home at a slight loss and bought a Midtown condo for $320,000 a year ago. He believes it has already lost value, likening the change to driving a new car off the lot.
“When I closed on the loan on the condo, it was probably worth less than what I paid for it,” he said.
That makes buying today a purely personal decision, one that requires a lot more research than a few years ago, said Lisa Simmons.
She and husband Steve Weibel, both real estate professionals, bought a Roswell home in April for $525,000. The home was appraised at $849,000 in 2008.
The 7,000-square-foot, five-bedroom, four-bath home includes features such as a “sweeping ‘Gone with the Wind’ staircase” and a half-acre wooded lot in a swim/tennis neighborhood. It’s near the Chattahoochee River and Centennial High School, in one of the metro area’s top school districts.
Their note is about $1,600 a month, or “less than what most people are paying for a really nice two-bedroom apartment,” Simmons said. She believes they got a good deal. But even they wonder if they bought at the right time.
“I don’t think anybody can time the market,” Simmons said. “Before, it was all about a pretty house and a nice kitchen.”
Now, it’s all about context.
“You’ve got to look at the health of the neighborhood, the homeowners association and the comparables,” she said. “The whole notion that real estate will go up in value has been shattered forever.”
And that leaves many in limbo. Potential buyers and sellers as well as current renters are just staying put.
Wolf said he has plenty of clients who are “staying in their homes longer instead of putting it up for sale. If they aren’t selling a home, that means they aren’t buying a new home.”
In Woodstock, Amstutz, 65, and his wife Susie, 50, have fought the temptation to move to Vinings because foreclosures brought down prices in their Eagle Watch subdivision (ZIP: 30189). And he wants to retire soon.
“Demographically I’m not a good candidate to buy a new home,” the salesman said. “I’m 65 years old, happy with what I have, and I don’t want to increase the size of my mortgage.”
He said he would consider moving if he could make an even swap so his debt wouldn’t increase. But that’s a big if. Resale prices in his ZIP dipped 4.5 percent to $161,750 last year, though they had an even larger decline the year before.
Many recent homebuyers can only console themselves with the thought they are paying less than renters to own their own piece of the dream.
“I believe in just being able to enjoy the home right now,” said Jackson in Fairburn. “My mortgage is probably lower than 70 percent of people that rent a two- or three-bedroom apartment. I feel like I’m getting my money’s worth even though the value may not be there.”
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THE HIGHEST: 30327
Buckhead
$631,200
median price 2010
+3.5%
Change in median price 2009-10
350
units sold 2010
+18.6%
Change in units sold 2009-10
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THE LOWEST: 30314
West of downtown
$15,250
median price 2010
-19.7%
Change in median price 2009-10
260
units sold 2010
-44.9%
Change in units sold 2009-10
