Data show how far values fell

If it could go wrong, it did.

Across a 20-county metro area, every region surveyed saw declining residential sales prices, and all but two saw a drop in the number of homes sold, compared with 2008, The Atlanta Journal-Constitution’s annual Home Sales Report shows.

The two counties that managed to record more home sales in 2009 — Clayton and Walton — had disastrous years price-wise. Clayton County’s sales increased 8 percent but prices plummeted 45 percent. In Walton County, where sales increased 2 percent, prices fell 24 percent, according to the 2009 report.

There were pockets of recovery. Neighborhoods in Suwanee and Smryna added value.

But throughout the metro area, potential buyers found themselves cash-strapped as the economy worsened. “For Sale” signs seemed to become permanent lawn ornaments. Sellers, like Mary Ely in Johns Creek, could only watch as the real estate market receded.

“I could see the economic downturn coming and I tried to sell, but I didn’t get any offers,” Ely said. “I was stuck.”

The report was compiled using data from Marietta-based real estate research firm SmartNumbers. It examined home sales and prices in 20 counties for 2009 compared with the previous year and studied trends among hundreds of metro Atlanta ZIP codes.

The report focuses on 166 ZIP codes across the metro area that saw a minimum of 75 homes sold during the year.

For those looking for relief in 2010, patience is in order: Early surveys indicate Atlanta will be slower to rebound than many other metropolitan areas.

Falling hard after decades of sustained growth, the five core counties of Clayton, Cobb, DeKalb, Fulton and Gwinnett saw the number of homes sold drop 6 percent and prices tumble 21 percent from 2008 levels.

The most homes were sold in Fulton County, followed by Gwinnett. The steepest price declines came in Clayton and DeKalb counties, the report shows.

Critical to declining sales and sale prices was the exorbitant number of foreclosures in metro Atlanta.

“Foreclosures drove prices way down,” said Eugene James, head of the Atlanta division of the real estate research company Metrostudy. “You had people who didn’t have to sell saying, ‘No, I’m not going to accept your lowball price,’ and took their homes off the market.”

There were also fewer homes for sale in 2009, and many of those had been listed for some time. If a homeowner didn’t have to sell in 2009, chances were good the owner didn’t bother trying, James said.

Fewer homes on the market meant a smaller inventory, one reason many counties saw fewer sales. But those homes that sold rarely closed above the seller’s original asking price, according to data from Prudential Georgia Realty.

This was hardly exclusive to Atlanta. Housing markets stagnated in metro areas across the country. Nationally, homes lost an estimated $500 billion in value last year.

“Everybody was hostage to the same forces,” said Jim Grissett, an adjunct professor at Emory and investment adviser who specializes in real estate. “And while the price declines here in Atlanta weren’t as severe, the breadth of the problem was worse.”

Atlanta’s foreclosure rate is among the nation’s highest, Grissett said, and that rate is still tracking upward.

“There were definitely winners and losers in this thing,” he said. “On a broad scale, the losers were people who had to sell for a loss, who bought at the end of the cycle and the people who speculated. The winners were people who waited and saved their money and just entered the market.”

After a calamitous 2008, the year got off to a rocky start nationally. Unemployment numbers were on the rise. Consumer confidence was down and dropping.

“That first three months, it seemed like the world was falling apart,” Grissett said. “The mortgage market was in disarray and there was panic in the first quarter.”

The fourth quarter, which brought the extension and expansion of the federal housing tax credit, was “when we felt we could breathe a bit,” he said.

Yet even with the promise of an $8,000 tax credit for first-time home buyers, not many took the leap.

“Even people who had jobs were afraid to make any large-ticket purchases,” James said.

The economy affected home buyers of all income levels, said Betsy Akers, an agent with Atlanta Fine Homes Sotheby’s International Realty. Many well-heeled potential buyers held on to their cash, compelling sellers of multimillion-dollar properties to slash their prices.

In June, a 4-acre estate in Buckhead sold for $10.5 million, the priciest recorded residential sale in Atlanta real estate history. But it went for $6.4 million less than the original list price, a stunning reduction of 37.9 percent.

“We are very excited about this sale, especially in this housing market,” Akers, who was the buyer’s agent, told the AJC at the time.

Akers is also the agent on the Tuxedo Road home of Atlanta Falcons owner Arthur Blank, which has been on the market two years and seen a number of price cuts. The home was the featured home for the 2010 Atlanta Symphony Associates Decorators’ Show House and Gardens event and has generated interest, but no contract, Akers said.

The seven-bedroom home had an original asking price of $10.9 million and is now listed for $6.9 million, Akers said.

For stressed homeowners who had to sell, and quickly, to avoid foreclosure or because of relocation, times were frightening.

Ely, who now has a contract on her Johns Creek home, said selling the home for less than she owes the bank — a short sale — was her only option.

“I can’t go through a foreclosure,” she said. “I just can’t.”

Home sales in Ely’s Fulton County ZIP code, 30097, saw mixed results in 2009. The ZIP code, which also stretches into Gwinnett County, saw an 8 percent rise in the number of homes sold but a 14 percent drop in sale price. On the Gwinnett side of 30097, home sales declined by 3 percent and prices fell 19 percent.

Among the 166 metro ZIP codes with more than 75 home sales, four experienced price increases: Forsyth County’s 30024 (Suwannee), Cobb County’s 30080 (Smyrna) and Fulton County’s 30004 (Alpharetta) all saw 2 percent increases. Spalding County’s 30223 (Griffin) had the largest sale price increase, 3 percent.

On the flip side, four ZIP codes had price declines of more than 50 percent: 63 percent in Clayton County’s 30349 (College Park), 62 percent in Fulton County’s 30337 (Atlanta), 60 percent in Henry County’s 30294 (unincorporated) and 51 percent in DeKalb County’s 30083 (Stone Mountain).

“When you have a sales price dip like that, you’ve almost got to assume there were a number of distress sales in that area,” said Raymond Morris, president of ReMax Greater Atlanta. “When you don’t have a dramatic drop, I think you can safely assume there weren’t as many distress sales.”

One of the biggest obstacles to solidifying the region is the large number of distressed properties — foreclosures and short sales — that remain on the market, said Dan Forsman, chief executive of Prudential Georgia Realty.

Once those homes work their way through the cycle, market prices will recover faster, he said.

“If you look at Case-Shiller [home price indexes], the low point was in March 2009 and we didn’t quite get back to that point this past February,” Morris said. “We know sales were up in March and April, thanks to the tax credit. So we’re expecting a better 2010.”

But that recovery has been slower in Atlanta than other regions. A 2010 first-quarter analysis by the National Association of Realtors released last week found that while the median single-family home price dropped 1 percent nationally from the first quarter of 2009, it dropped 5 percent here.

Atlanta ranked 124th among 152 cities in median single-family home prices.

“You do have to remember Atlanta didn’t suffer as much as many places,” said Grissett, the Emory professor.

“So we may not be in such bad shape, but we certainly want to see those prices rise and sales get stronger.”