Atlanta Home Prices Hold Steady For Now

The recent media meltdown over bad credit mortgages served to focus public attention like a laser beam on the current residential Atlanta real estate slowdown. But other news events have shifted the focus.

The Office of Federal Housing Enterprise Oversight recently released its national Housing Price Index, called the HPI. The current survey covers refinance and sales data for the period ending June 30, so it’s likely the best info available.

In addition, the HPI is widely regarded as the broadest measure of housing price movement, because it reflects appraisal information for all Fannie Mae and Freddie Mac loans, including both sales and refinancing.

Only in the HPI are these transactions reflected as well as sales data.

The nation as a whole saw prices in the second quarter of 2007 grow to 3.2 percent higher than they were a year ago, with a national gain of only one-tenth of 1 percent from the first quarter of this year.

Many pundits had predicted that a substantial drop in home values would be indicated, but the numbers told a different tale. Even so, this represents the smallest increase in year-over year prices since 1996-97.

We should remember that almost 70 percent of homes in America are owned by the family living in them. So if a seller can’t get at least as much as he paid for a house, he often decides to take the home off the market and just stay. This has a strong stabilizing effect on prices.

• Prices in the Georgia housing market fared better than nationally, with an increase in home prices of 4.64 percent from a year ago.
• And while prices inched up from the first quarter by only half a percent, that’s larger than the nation. Georgia ranked 23rd in appreciation.

So where is this massive decline in Georgia home prices that we had all been led to believe was surely on its way?

Sure, there has been a significant tightening of credit policies over the past few months, and yes, it is harder for marginally qualified first-time buyers and big spenders to get an Atlanta mortgage, but that has not yet caused prices to go down in most of the city or most of America.

And yes, we are experiencing a dramatic increase in the number of homes being foreclosed by mortgage lenders. In just the 13-county Atlanta housing market, the number of homes advertised as going into foreclosure more than tripled since 2000, when more than 15,000 homes went into foreclosure.

Yes, we will quite likely see more than 50,000 new homes listed in foreclosure publications this year. And sales volume in Atlanta is off some 30 percent from where it was this time last year, and that’s not good. But even so, those facts have so far not sparked a drop in prices in Atlanta.

The fact remains that all real estate is local. For now, all we can say for sure is that Atlanta housing prices remain basically flat and sales are still well below our boom highs. Let’s hope that this is the worst we see.

SOURCE: Atlanta Journal-Constitution