Home prices in metro Atlanta fell in March to the lowest level since late 1999, weighed down by the effect of foreclosures and a backlog of unsold properties, according to a widely watched index released Tuesday.
The region’s decline mirrors a stubbornly deteriorating national housing picture despite the slow economic recovery, the latest Standard & Poor’s/Case-Shiller Index said.
“This month’s report is marked by confirmation of a double-dip in home prices across much of the nation,” said David Blitzer, chairman of S&P’s index committee. “Home prices continue on their downward spiral with no relief in sight.”
Prices staged a mild rebound in most markets a year ago but have reversed course since federal tax credits expired. Sales volume also is down from a year ago.
Nationally, prices were 33 percent off their 2006 peaks in March, according to the 20-city index. Metro Atlanta’s decline from the peak is not as severe, at 28 percent, but the area’s price appreciation also was not as steep during the boom years.
But in the latest report Atlanta joined only four cities with price indexes below 2000 levels. The others were Detroit, Cleveland and Las Vegas.
For Dunwoody homeowner Billy Crenshaw, that confirms what he already knows: he’ll be taking a loss on his condo.
“We paid $275,000 for it in 2005. In 2001, when it was built, it sold for $299,000. We’re putting it on market for $225,000, but we expect to get about $200,000 for it,” he said.
All told, with $15,000 in improvements, he expects to a lose a third of his investment. But he must sell now because he and his wife are ready to move to a retirement community in Texas.
“It’s not our choice right now to do this at the bottom of the market, we just have to make a move. It tightens up everything,” he said of his spending.
In the S&P/Case-Shiller Index, compiled from a measure of repeat sales, a score of 100 represents prices at the start of 2000. The index fell from February to March in 18 of 20 cities tracked.
Metro Atlanta’s March index fell to 98.36, from 100.23 in February and 103.73 in March 2010. Atlanta’s index peaked at 136.47 in July 2007.
The trend acts as a brake on the economic recovery, said Rajeev Dhawan, director of the Economic Forecasting Center at the Georgia State’s Robinson College of Business.
“These numbers are not good for the confidence of a standard average middle class person, as a big part of their wealth is tied up in their homes,” he said. “To see the value of their home dropping affects their mood and ultimately their spending.”
He said it’s also bad news for small business owners, who often use homes as collateral for bank loans.
Debby Braun, an agent with Keller Williams Realty-First Atlanta in Sandy Springs, East Cobb, and Dunwoody, tries to get buyers and sellers off the fence with the thought they may take a loss on the house they sell, but will gain value on the house they buy.
“There are a lot of stalled sales from people who would either move up or move down,” she said. “They just can’t get over that real loss, in some cases, and in others it’s a perceived loss.”
Walter Molony, a spokesman for the National Association of Realtors, expects home prices to remain flat the rest of the year as waves of foreclosures continue.
“What we are finding in our data is a large downward skew because there so many foreclosures pulling down market. We didn’t have as many foreclosures in 2009,” he said.
Four out of 10 sales nationwide last year were distressed, he said, with prices discounted 20 percent or more.
“That mix of sales is not representative of the United States,” he said. “The typical U.S. housing stock is in much better shape than the homes being sold.”
Agents note that even in a down market real estate values can be strong in certain areas.
Real estate agent Peggy Hibbert, of Atlanta Fine Homes Sotheby’s International Realty, sells from Morningside to Decatur -- sought-after intown areas with good schools.
“I’m seeing houses sell. I’m seeing buyers feeling more comfortable that they are getting a good value. And I’m seeing people that are ready to make changes in their life, but had been waiting, move forward,” she said.
