Georgia, Atlanta Mortgage Outlook: Slowing Gradually

Georgia and Atlanta home sales are tracking the national trend down, but the city’s housing prices are better positioned, showing median price increases compared with earlier this year and last.

The Georgia housing market for the period from April 1 to June 30 dropped 13.1 percent to 226,400 from 260,400 in the same quarter last year.

Sales also decreased from the 235,200 in the first three months of 2007, showing declining interest despite low Georgia mortgage rates.

Nationally, sales of existing homes dropped 10.8 percent in the second quarter from a year earlier at this time.

Real estate professionals are forecasting a more prolonged trough in real estate than was initially forecast.

“I can’t predict when we’ll be completely out of this,” said J. Lewis Glenn, president of Harry Norman Realtors.

“Some experts are saying it will be the end of 2008, maybe into 2009.”

The Atlanta housing market - a 22-county area - appears to be even more bleak than the state as a whole.

Though the national Realtors’ report did not include sales data below the state level, research showed an 18.5 percent decline in the first quarter of 2007 compared with a year ago.

But there are glimmers of good news among the metro area housing data.

The median price for an Atlanta area home actually rose in the second quarter of 2007 to $175,500, from $170,400 in the first quarter of 2007, according to the Realtors.

During the second quarter of 2006, Metro Atlanta’s median home price was $173,900, making Atlanta mortgage costs still relatively affordable.

Nationally, home prices declined 1.5 percent in the same period.

Glenn said the greatest surplus in Atlanta’s growing inventory of homes for sale is at the starter home level, where tighter Georgia mortgage standards are blocking formerly prospective buyers from the market and an uncertain economy is making even qualified prospects reluctant to commit.

“People are sitting on the sidelines,” Glenn said.

But luxury home sales in Atlanta appear to be experiencing little effect from the housing slump.

Dac Carver, director of marketing for Beacham & Associates, said the 112 homes sold in the Atlanta market during June 2007 nearly matched the 113 sold in June 2006.

And they comprised a larger share of all the homes sold during June in a 42-county North Georgia housing market.

“We’re seeing a lot of activity,” Carver said. “The high end has really been insulated from all this [home sales decline].”

Glenn confirmed Carver’s observations.

“The high end is really holding its own,” Glenn said.

He stressed the metro Atlanta market’s underlying strength in competitive home prices, growing employment base and quality-of-life attractions such as recreation and entertainment.

SOURCE: Atlanta Journal-Constitution