Before we provide the answer, we want to make two caveats. First, the Case-Shiller index of home values is very different from average sale prices or median homes prices which only reflect what was actually sold in the market. If lower priced homes are selling more, then the average sales price will show a lower value than what market value may be for higher priced properties. According to SmartNumbers, almost 50% of 2011 closed sales are under $100,000 and the normal distribution would be in the 10-15% range. That skews the average sales price lower. The median price is simply the home sales price in the middle of the properties selected. The Case-Shiller Index reports on repeat properties sold and other factors which are generally better indicators of home values. Second, this index reflects the average home values for all of Metro Atlanta. Remember, people do not buy houses in America or even in metro Atlanta. They buy a specific property on a street in a local community. Real estate is local and every market is different. There are some local communities that have held their values reasonably well and others that may continue to decline. Your local agent expert can help you understand the specific metrics in your local market. However, the Case-Shiller Index is a good general indication on what is happening in our market.

Now for the news…. The April index shows a 1.65% increase in homes values from March 2011 which reflects the normal seasonality of the stronger spring market.  The Case-Shiller Index is a “rolling average” which means that trailing results can slightly change the past results.  This update shows slight positive gains in January and February and a small decline in March.  The current index reflects values similar to home values in the spring of 2000.  But we are returning to a more normal seasonal pattern which tends to see home values rise in the spring and summer months with drops in the fall and winter. Right now the inventory is down compared to historical levels and pending volumes are very strong.  We expect to see more positive home values through the mid summer months.  But remember our values remain significantly down compared to peak levels.  We have several more years of foreclosures and short sales to process before we begin to show sustained increases in home values.  The April index is 101.95 which is 1.65% up from last month and 3.54% down from April of last year.  Click on the link below to open the Excel spreadsheet that shows the details of the latest index.

Case Shiller Index Atlanta – April 2011 Index – Reported June 2011

The peak of our market was July of 2007 according to the Case-Shiller index. Since July of 2007, our homes values have slipped 25.29%. If you average the Case Shiller Index for the past 12 months, we are down 23.57% from the peak. We believe it is more effective to use the ”average of the past 12 months” or “trailing 12 months” as an indicator instead of reacting to a specific month.

The big factors to watch will be the pace of short sales and foreclosures entering the market and mortgage rates. Your local Prudential Georgia Realty agent can show you the specific trends in your local area for foreclosures, short sales and notices of default. Recently, we have seen mortgage rates dip back to historic lows again. That will not last long as virtually every analyst predicts rates to go higher in the future. There are major issues at stake including the future of Freddie & Fannie and proposed legislation for QRM (Qualified Residential Mortgages) that will require 20% or higher down payments and increase the costs to provide financing. Analysts also predict the demise of more exotic loan types like ARMs and interest-only loans. We will more likely see plain vanilla mortgages of 10, 20 and 30 years with a 20% down payment. This is all part of the financial reform legislation. Right now, there is an incredible window of opportunity to buy the home of your dreams and set a future mortgage rate that we will not likely see again in our lifetimes.

Remember, you will not know the bottom of the market until it is already passed. We believe that we are seeing the bottom of the market for Metro Atlanta now. Future demand for our housing is strong. The AJC recently published a report from the Economic Forecasting Center at Georgia State University that predicted we would see over 60,000 jobs in 2011 and over 78,000 in 2012. A report from the Atlanta Regional Commission forecasts 3 million new residents in the next 30 years. Our conclusion is that we are seeing the bottom of homes values for Metro Atlanta but do not expect a robust recovery. We expect to see annual home values slowly increase over time with a few bumps along the way. In approximately 2013, we expect to see a seller’s market return with higher than normal appreciation for a few years. Contact us to learn more about future predictions and how that impacts your decisions.

If you look at the average annual Case-Shiller index for each year, here is how homes purchased in recent years would compare to the current index:

• Homes Bought in 2000 – Loss of 1.24%
• Homes Bought in 2001 – Loss of 6.48%
• Homes Bought in 2002 – Loss of 9.95%
• Homes Bought in 2003 – Loss of 12.78%
• Homes Bought in 2004 – Loss of 15,75%
• Homes Bought in 2005 – Loss of 19.79%
• Homes Bought in 2006 – Loss of 23.45%
• Homes Bought in 2007 – Loss of 23.95%
• Homes Bought in 2008 – Loss of 16.87%
• Homes Bought in 2009 - Loss of 5.95%

Yes, we are slowly climbing our way out of this unprecedented housing crisis – but we are not there yet. So where will home values go from here? The key factors that will impact our home values include the following:

1. Demand From Buyers (We expect demand to slightly improve for 2011 with over 60,000 homes purchased.)
2. Mortgage Rates/ Credit Availability (Average mortgage rates in the past 50 years were 8%. We expect to see historically low mortgage rates this summer but expect to see rates rising during the later part of 2011 and into 2012. In a few years, we expect to see rates 1-2% higher.)
3. Supply/ Inventory Levels (We expect inventory to remain at slightly low to normal levels with a heavier mix of short sales and foreclosures for the next two years.)
4. Competition from Short Sales/ Foreclosures (We expect to see significant numbers of short sales & foreclosures for the next two years. Analysts predict that short sales and foreclosures will be approximately 60% of the transactions in 2011. However, we do not expect a flood of foreclosures that drives the overall inventory too high. Banks are not likely to harm their own values.)

You and your agent should be carefully watching the trends for short sales and foreclosures. Yes, we will continue to see some ups and downs along the way, but home values will rise again. In a few years, short sales and foreclosures will return to normal levels. The new homes inventory will remain low. That means we will see an undersupply of homes for sale and values will begin to rise. In 5 or 10 years, many will look back and regret not buying their dream home when they had the chance!  Check back for our next posts with the latest facts and insight that can make you money!

Before we provide the answer, we want to make two caveats. First, the Case-Shiller index of home values is very different from average sale prices or median homes prices which only reflect what was actually sold in the market. If lower priced homes are selling more, then the average sales price will show a lower value than what market value may be for higher priced properties.   According to SmartNumbers, almost 50% of 2011 closed sales are under $100,000 and the normal distribution would be in the 10-15% range.  That skews the average sales price lower.  The median price is simply the home sales price in the middle of the properties selected. The Case-Shiller Index reports on repeat properties sold and other factors which are generally better indicators of home values. Second, this index reflects the average home values for all of Metro Atlanta. Remember, people do not buy houses in America or even in metro Atlanta. They buy a specific property on a street in a local community. Real estate is local and every market is different.  There are some local communities that have held their values reasonably well and others that may continue to decline.   Your local agent expert can help you understand the specific metrics in your local market.   However, the Case-Shiller Index is a good general indication on what is happening in our market.

Now for the news…. The March index continues an 8-month streak of falling home values.  The current index reflects values similar to home values in October of 1999.  But we are returning to a more normal seasonal pattern which tends to see home values rise in the spring and summer months with drops in the fall and winter. The March index is 98.36 which is 1.87% down from last month and 5.18% down from March of last year. The root causes for these results are the aggressive prices of short sales and foreclosures in our market plus overall concerns about the economy. Click on the link below to open the Excel spreadsheet that shows the details of the latest index.

Case Shiller Index Atlanta – March 2011 Index – Reported May 2011

The peak of our market was July of 2007 according to the Case-Shiller index. Since July of 2007, our homes values have slipped 27.93%.  If you average the Case Shiller Index for the past 12 months, we are down 23.60% from the peak.  We believe it is more effective to use the ”average of the past 12 months” or “trailing 12 months” as an indicator instead of reacting to a specific month.

The big factors to watch will be the pace of short sales and foreclosures entering the market and mortgage rates.  Your local Prudential Georgia Realty agent can show you the specific trends in your local area for foreclosures, short sales and notices of default.  Recently, we have seen mortgage rates dip back to historic lows again.  That will not last long as virtually every analyst predicts rates to go higher in the future.  There are major issues at stake including the future of Freddie & Fannie and proposed legislation for QRM (Qualified Residential Mortgages) that will require 20% or higher down payments and increase the costs to provide financing.  Analysts also predict the demise of more exotic loan types like ARMs and interest-only loans.  We will more likely see plain vanilla mortgages of 10, 20 and 30 years with a 20% down payment.  This is all part of the financial reform legislation.   Right now, there is an incredible window of opportunity to buy the home of your dreams and set a future mortgage rate that we will not likely see again in our lifetimes. 

Remember, you will not know the bottom of the market until it is already passed.  We believe that we are seeing the bottom of the market for Metro Atlanta now.  Future demand for our housing is strong.  The AJC recently published a report from the Economic Forecasting Center at Georgia State University that predicted we would see over 60,000 jobs in 2011 and over 78,000 in 2012. A report from the Atlanta Regional Commission forecasts 3 million new residents in the next 30 years. Our conclusion is that we are seeing the bottom of homes values for Metro Atlanta but do not expect a robust recovery. We expect to see annual home values slowly increase over time with a few bumps along the way. In approximately 2013, we expect to see a seller’s market return with higher than normal appreciation for a few years. Contact us to learn more about future predictions and how that impacts your decisions.

If you look at the average annual Case-Shiller index for each year, here is how homes purchased in recent years would compare to the current index:

• Homes Bought in 2000 – Loss of 4.72%
• Homes Bought in 2001 – Loss of 9.77%
• Homes Bought in 2002 – Loss of 13.12%
• Homes Bought in 2003 – Loss of 15.86%
• Homes Bought in 2004 – Loss of 18.72%
• Homes Bought in 2005 – Loss of 22.62%
• Homes Bought in 2006 – Loss of 26.15%
• Homes Bought in 2007 – Loss of 26.63%
• Homes Bought in 2008 – Loss of 19.80%
• Homes Bought in 2009 - Loss of 9.26%

Yes, we are slowly climbing our way out of this unprecedented housing crisis – but we are not there yet. So where will home values go from here? The key factors that will impact our home values include the following:

1. Demand From Buyers (We expect demand to slightly improve for 2011 with over 60,000 homes purchased.)
2. Mortgage Rates/ Credit Availability (Average mortgage rates in the past 50 years were 8%. We expect to see historically low mortgage rates this summer but expect to see rates rising during the later part of 2011 and into 2012.  In a few years, we expect to see rates 1-2% higher.)
3. Supply/ Inventory Levels (We expect inventory to remain at slightly low to normal levels with a heavier mix of short sales and foreclosures for the next two years.)
4. Competition from Short Sales/ Foreclosures (We expect to see significant numbers of short sales & foreclosures for the next two years. Analysts predict that short sales and foreclosures will be approximately 60% of the transactions in 2011. However, we do not expect a flood of foreclosures that drives the overall inventory too high. Banks are not likely to harm their own values.)

You and your agent should be carefully watching the trends for short sales and foreclosures. Yes, we will continue to see some ups and downs along the way, but home values will rise again. In a few years, short sales and foreclosures will return to normal levels. The new homes inventory will remain low. That means we will see an undersupply of homes for sale and values will begin to rise. In 5 or 10 years, many will look back and regret not buying their dream home when they had the chance!  Check back for our next posts with the latest facts and insight that can make you money!

Before we provide the answer, we want to make two caveats. First, the Case-Shiller index of home values is very different from average sale prices or median homes prices which only reflect what was actually sold in the market. If lower priced homes are selling more, then the average sales price will show a lower value than what market value may be for higher priced properties. The median price is simply the home sales price in the middle of the properties selected. The Case-Shiller Index reports on repeat properties sold and other factors which are generally better indicators of home values. Second, this index reflects the average home values for all of Metro Atlanta. Remember, people do not buy houses in America or even in metro Atlanta. They buy a specific property on a street in a local community. Real estate is local and every market is different. Your local agent expert can help you understand the specific metrics in your local market. However, these metrics are a good general indication on what is happening in our market.

Now for the news…. The February index continues a 7 month streak of falling home values.  The March 2010 index was the previous low before these past few months in Metro Atlanta. The current index reflects values similar to home values in the winter of 1999. But we are returning to a more normal seasonal pattern which tends to see home values rise in the spring and summer months with drops in the fall and winter. The February index is 99.47 which is 53% down from last month and 5.85% down from February of last year. The root cause for these results are the aggressive prices of short sales and foreclosures in our market. Click on the link below to open the Excel spreadsheet that shows the details of the latest index.

Case Shiller Index Atlanta – February 2011 Index – Reported April 2011

The peak of our market was July of 2007 according to the Case-Shiller index. Since July of 2007, our homes values have slipped 27.11%. We expect to see lower index numbers in March with increases in the spring and summer. If you average the Case Shiller Index for the past 12 months, we are down 23.30% from the peak. We expect the get to the 25% down range based upon the 2010 annual index over the next few months. We believe it is more effective to use the ”average of the past 12 months” or “trailing 12 months” as an indicator instead of reacting to a specific month. The big factor to watch will be the pace of short sales and foreclosures entering the market.

Remember, you will not know the bottom of the market until it is already passed. We believe that we are seeing the bottom of the market this winter and early spring. The AJC recently published a report from the Economic Forecasting Center at Georgia State University that predicted we would see over 60,000 jobs in 2011 and over 78,000 in 2012. A report from the Atlanta Regional Commission forecasts 3 million new residents in the next 30 years. Our conclusion is that we are seeing the bottom of homes values for Metro Atlanta but do not expect a robust recovery. We expect to see annual home values slowly increase over time with a few bumps along the way. In approximately 2013, we expect to see a seller’s market return and higher than normal appreciation for a few years. Contact us to learn more about future predictions and how that impacts your decisions.

If you look at the average annual Case-Shiller index for each year, here is how homes purchased in recent years would compare to the current index:

• Homes Bought in 2000 – Loss of 3.64%
• Homes Bought in 2001 – Loss of 8.75%
• Homes Bought in 2002 – Loss of 12.14%
• Homes Bought in 2003 – Loss of 14.91%
• Homes Bought in 2004 – Loss of 17.80%
• Homes Bought in 2005 – Loss of 21.75%
• Homes Bought in 2006 – Loss of 25.32%
• Homes Bought in 2007 – Loss of 25.80%
• Homes Bought in 2008 – Loss of 18.90%
• Homes Bought in 2009 - Loss of 8.24%

Yes, we are slowly climbing our way out of this unprecedented housing crisis – but we are not there yet. So where will home values go from here? The key factors that will impact our home values include the following:

1. Demand From Buyers (We expect demand to improve for 2011.)
2. Mortgage Rates/ Credit Availability (Average mortgage rates in the past 50 years were 8%. We expect to see historically low mortgage rates but expect to see rates rising during 2011. In a few years, we expect to see rates 1-2% higher. We also expect to see adjustable rate mortgages and other more exotic loan options disappear in 2011.)
3. Supply/ Inventory Levels (We expect inventory to remain at slightly low to normal levels with a heavier mix of short sales and foreclosures for the next two years.)
4. Competition from Short Sales/ Foreclosures (We expect to see significant numbers of short sales & foreclosures for the next two years. Analysts predict that short sales and foreclosures will be approximately 60% of the transactions in 2011. However, we do not expect a flood of foreclosures that drives the overall inventory too high. Banks are not likley to harm their own values.)

You and your agent should be carefully watching the trends for short sales and foreclosures. Yes, we will continue to see some ups and downs along the way, but home values will rise again. In a few years, short sales and foreclosures will return to normal levels. The new homes inventory will remain low. That means we will see an undersupply of homes for sale and values will begin to rise. In 5 or 10 years, many will look back and regret not buying their dream home when they had the chance! Check back for our next posts with the latest facts and insight that can make you money!