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!