Atlanta Short Sales | The Real Scoop on Atlanta Real Estate

Posts Tagged ‘Atlanta short sales’

Case Shiller Index – October 2009

Tuesday, October 27th, 2009

The latest Case-Shiller Index was published today. As always, Case-Shiller is published the last Tuesday of the month and reports on data 60 days in arrears. So what does the latest index show and what does that mean for home values in metro Atlanta?

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 which reflect the average prices of what is being sold in the market. Right now, the heavy volumes in the market are on the lower end for 1st time home buyers and short sales/ foreclosures. The luxury market is slower so that makes the average sales price lower than a normal market. Second, real estate is local and every market is different. Your local agent expert can help you understand the specific metrics in your local market.

Now to the news…. The July index shows the 5th positive gain in a row for metro Atlanta home values. If you look at the numbers, you will see the % gains this month are less than the previous few months – signaling a slowing of momentum. Click on the link below to open the Excel spreadsheet that shows the details of the latest index.

Case Shiller Index – Metro Atlanta – August 2009 Index

This means that home values have actually increased from March 2009 by 5.8%. That is good news! The peak of the index was July 2007 and the bottom of the index was March of 2009. But remember…. home values are still down from their peaks and sellers must be realistic about pricing. Home values are still down 17.19% from the peak of July 2007. 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 – Gain of 3.76%

Homes Bought in 2001 – Loss of 1.57%

Homes Bought in 2002 – Loss of 5.16%

Homes Bought in 2003 – Loss of 8.10%

Homes Bought in 2004 – Loss of 11.33%

Homes Bought in 2005 – Loss of 15.65%

Homes Bought in 2006 – Loss of 19.15%

Homes Bought in 2007 – Loss of 19.67%

Homes Bought in 2008 – Loss of 12.20%

Homes values are essentially the same as November 2001 right now. 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 value include the following:

Demand From Buyers (We need to see ” extension and expansion” of the Housing Tax Credit!)

Mortgage Rates/ Credit Availability

Pace of Short Sales/ Foreclosures Entering the Market (See latest blog post on short sales & foreclosures – http://atlrealestatescoop.com/changing-trends-foreclosures-short-sales/)

You and your agent should be carefully watching the trends for short sales and foreclosures. The status of the federal housing tax credit will also have an impact on demand from buyers. We will continue to keep you informed with the latest facts and insight that can make you money! Stay tuned….

Tags: Atlanta foreclosures, Atlanta homes values, Atlanta new homes, Atlanta real estate, Atlanta short sales, Case-Shiller Index Atlanta, Prudential Georgia Realty
Posted in Case-Shiller Index | No Comments »

Changing Trends for Foreclosures and Short Sales

Monday, October 26th, 2009

The trends for new “notices of foreclosure” or pre-foreclosures continue to be significant for the metro Atlanta market. Equity Depot reports that pre-foreclosures have been in the 10,000 – 12,000 range each month for metro Atlanta since mid summer. This is up from the 7,000 - 8,000 range last fall. These increases are driven by unemployment, adjustable mortgages resetting to higher levels and general economic conditions. One would expect that the inventory levels of bank-owned properties would be significantly higher… but that is not the case. Rick Sharga, SVP Marketing at RealtyTrac, wrote a recent blog post and estimated that there are at least 450,000 to 500,000 missing REO properties or “shadow inventory” as it is now known in the industry. So where are these missing REOs or bank-owned properties?

Click the chart image below to view the data for the big 4 counties of metro Atlanta – Fulton, Dekalb, Cobb and Gwinnett. Contact us if you are interested in see the data for each individual county. This chart shows some interesting facts:

Pre-foreclosures are still very high (yellow bar)
Properties that become foreclosed or bank-owned are significantly lower (red bar)
Sales of bank-owned properties is higher than the rate of new properties becoming bank-owned (purple bar)
Market sales (resales, new homes, land) are significantly smaller than the number of pre-foreclosures (green bar)
The percentage of REOs or bank-owned properties compared to total sales is shrinking in recent months (green line).

The case is clear – REO listing inventory is shrinking. We also know this to be true from the “word on the streets” since many REO specialists do not have the listing inventory volumes they has back in the spring and early summer months. There are two root causes for this situation. One is that more banks are supporting and promoting short sales. The second is that banks are simply sitting on inventory and not bringing properties to the market for sale. Short sales make sense since it costs the bank less money to process. But why would a bank sit on inventory and not bring to market for sale? Some speculate that banks are holding assets to defer losses. Others believe that banks are using these assets to negotiate with the government to establish a “toxic bank” similar to the model used for the RTC (Resolution Trust Corporation). Only time will tell the real reasons.

So what does this mean to sellers or buyers in metro Atlanta?

For sellers, it means that you and your agent need to carefully watch the trends for future listing inventory in your local area. This includes notices of foreclosure or pre-foreclosures that will become short sales or bank-owned properties. This also includes the “shadow inventory” that banks are holding. If the banks decide to dump the inventory onto the market too fast, it will have a negative impact on market values. Yet another category to watch includes the “sideline inventory” of sellers that are expected to come into the market if values slightly improve. Right now our inventory levels are down 28% from last year. Pended sales are running at about the same pace as last year. For now, we are consuming our inventory. If that remains the case, property values will remain stable and may even pick up slightly. It is all about the balance for buyers and the current listing inventory. Prudential Georgia Realty created our award-winning Advanced Property Marketing System specifically for these types of market conditions. As the market changes, we will see the trends first and can help you optimize your value proposition to stand out from your competition.

For buyers, there are still tremendous deals in our market. There are fabulous resales, builder short sales, residential short sales and bank-owned properties. Many of these are priced below their replacement costs. It may be wise to work with a specialist who understands both the short sale and REO markets to evaluate the best opportunities. Prudential Georgia Realty has hundreds of trained and certified specialists that can help in your local area. These specialists have foreclosure searches powered by RealtyTrac plus our new custom Short Sale search. PGR is the only brokerage that provides these powerful tools to our agents.

If you want THE EDGE in the market, please contact your Prudential Georgia Realty agent to get started today!

Tags: Atlanta foreclosures, Atlanta homes values, Atlanta real estate, Atlanta short sales, Prudential Georgia Realty
Posted in Atlanta Foreclosures, Local Market Reports | 3 Comments »

The Latest Case Shiller Report – What Does It Mean?

Thursday, October 1st, 2009

The latest Case-Shiller Index was published on Tuesday. As always, Case-Shiller is published the last Tuesday of the month and reports on data 60 days in arrears. So what does the latest index show and what does that mean for home value in metro Atlanta?

Now to the news…. The July index shows the 4th positive gain in a row for metro Atlanta home values. If you look at the number, you will see the % gains every month are growing. Click on the link below to see the details on the spreadsheet.

Case Shiller Index – Atlanta – July 2009 Index

This means that home values have actually increased from March 2009 by 4.7%. That is good news! The peak of the index was July 2007 and the bottom of the index was March of 2009. Since March, Trendgraphix reports pending sales increases for three months in a row with slight dips in July and August. This is being driven by the expiring tax credits and the great buying opportunities in the market. But remember…. home values are still down from their peaks and sellers must be realistic about pricing. Home values are still down 19.35% from the peak of July 2007. 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 – Gain of 3.2%

Homes Bought in 2001 – Loss of 2.02%

Homes Bought in 2002 – Loss of 5.6%

Homes Bought in 2003 – Loss of 8.54%

Homes Bought in 2004 – Loss of 11.75%

Homes Bought in 2005 – Loss of 16.05%

Homes Bought in 2006 – Loss of 19.53%

Homes Bought in 2007 – Loss of 20.05%

Homes Bought in 2008 – Loss of 12.6 %

Homes values are essentially the same as the fall of 2000 right now. Yes, we are slowly climbing our way out of this unprecedented housing crisis – but we are not there quite yet. So where will home values go from here? We believe that the “extended summer selling season” will continue through October Case-Shiller results. We will start to see home values drop slightly in the late fall and winter months. We expect next spring and summer to be better than the spring and summer markets of 2009. If Congress sweetens the pot with a broader tax credit, we will see significantly more positive momentum in the market. The keys to watch will be the following:

Extension and/or Expanding of Federal Housing Tax Credits

Mortgage Rates/ Credit Availability

Pace of Short Sales/ Foreclosures Entering the Market

We will be posting a new article in the next few days that will address the growing trend of short sales. This is going to be one of the significant trends to watch that will impact our home values. Stay tuned….

Tags: Atlanta foreclosures, Atlanta new homes, Atlanta real estate, Atlanta short sales, Case-Shiller Index Atlanta, Prudential Georgia Realty
Posted in Case-Shiller Index | No Comments »