Atlanta Leads the Country

We had the biggest decline in house prices of all major U.S. cities, according to Standard & Poor’s Case-Shiller Home Price Indices. While the rest of the country saw slightly increased house prices, Atlanta set a new low.

Atlanta’s index fell to 95.99 for September, which means the average home sale price is 4 percent lower than it was in 2000. It was the largest decline for a major U.S. city and came at a time when the national index climbed 0.1 percent.

“I think what has happened is that we have a combination of the investors buying, coupled with short sales and foreclosures, coupled with a hugely disproportionate number of sales that are under $125,000,” said Daniel Forsman, the president and CEO of Prudential Georgia Realty.

Close to 30 percent of sales in metro Atlanta are foreclosures, Forsman said. Another significant share involves short sales, when a lender agrees to take less for a property than the value of its loan, and about 25 percent of sales are to investors, he said.

The short sales and foreclosures are putting downward pressure on the price of resales as well as new homes, said Brad Horner, the president of NRT Development Advisors in Atlanta, a residential brokerage company specializing in new homes sales.

The average sale price in 2010 was $188,524. So far in 2011, it has dropped to $156,922, his figures say.

If there is good news, it is that the number of homes sold are rising in the 56 counties of North Georgia, according to Horner’s numbers.

Good thing the recession ended!

Sidenote: SunTrust dropped one spot to the 12th largest bank in the U.S.

10 comments

  1. Cassandra says:

    Vegas and Atlanta are home to the largest stockpile of foreclosures, which are driving prices downward. Atlanta’s diversity of housing stock, old, new, renovated, urban, suburban is wider than mostly new homes in Vegas. That is the dynamic that propels us to this miserable and dubious distinction.

    We will see depressed housing prices until the current glut, with more glut to come, of foreclosed home stock is cleared. Currently, the robo-signing mess is slowing down wholesale liquidation of foreclosures.

    You can buy a house in Atlanta for $7K, if you are savvy and in the business. Until that goes away, Atlanta will see lower home values.

    WHICH MEANS THAT, bloated Big County governments better muster the political will to right size staff, programs, and services because property tax revenues will stay low for awhile. Mucking with the millage rate to compensate is nonsense.

    DeKalb pulled $40MM out of the Parks Bond till to keep the lights on last year. Put that in your Brookhaven Pipe Shop pipe and take a big toke, Burrell.

  2. On the upside of housing prices going down, that means the surrounding property values are going down, which means lower property taxes. (Or at least until they raise the rates to accomodate for the lower property values anyways…)

    • CobbGOPer says:

      Your second assumption is by far the likelier outcome. They’ll just start complaining that if they don’t raise the millage rate they’ll have to fire x number of cops and firefighters or x number of teachers (as if these are the only ways to cut spending/save money when the county runs short), and people will cave in. As opposed to making hard choices and cutting spending where they can/should, they will do the predictable and put the burden on the already heavily-laden taxpayer.

        • No, but there are some things that government does (at all levels) that could be considered unnecessary or paid for by the private sector / users of that amenity. One example – Cobb County is spending $600k to renovate the fields at one soccer complex. (Granted, this is being paid for by the SPLOST and not property taxes). Why are the people who use (read: tear up) the fields not the ones to pay for it? Why must the entire county share that burden?

          • benevolus says:

            Because I think we want kids who can’t afford to pay to be able to play soccer with their friends. We all chip in a little so they can.

              • Engineer says:

                They couldn’t just do what we do down here in South Georgia, use the football fields and/or practice fields?

              • benevolus says:

                I am only addressing why the community pays for it rather than charge per usage, which is essentially privatizing it. I mean, if you are going to charge enough to cover the cost, it becomes a profit source.
                If you don’t think the community needs the field at all, that’s another matter. It is probably non-essential, but we pay for football fields and baseball fields, why not soccer?
                If their neighborhood has a field, then sure they can play there. How can you play soccer at someones house (unless you have a few acres)?

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