Maybe buying a home in greater Atlanta wasn’t such a smart investment after all.
The metro area is way behind the nation in home equity gain, according to a quarterly report released Tuesday by the National Association of Realtors.
Over a six-year period, the median increase for 28 counties is just 1.9 percent or $2,800.
That smarts when you consider that Trenton, N.J., is up 78.7 percent ($150,800) and Boise City, Idaho, 50 percent ($62,400). The median increase nationwide was 18.3 percent.
“That is a really flat performance,” NAR spokesman Walter Molony said about Atlanta’s numbers.
The NAR collects the data from local multiple listing services, but Atlanta real estate professionals were in disbelief about their city’s portrayal.
“It doesn’t make sense to me,” said Scott Simpson, president of the Atlanta Board of Realtors.
Simpson quoted average sales price numbers from 2002 and this year that showed a higher but still modest increase of 5.4 percent.
The NAR report also says that over a year’s time, the median resale price of a single-family home in greater Atlanta dropped 13.7 percent. Nationally the decrease was 9 percent.
Foreclosures and sales for losses accounted for 35 percent to 40 percent of transactions across the country in the third quarter, the NAR says.
Unlike Florida and areas in the West and Southwest, Atlanta has not seen rapid price rises or declines.
But that’s little consolation to Patrick Uzodike, a doctor who bought houses in Lawrenceville, Stone Mountain and Ellenwood two years ago only to see them drop in value.
“It’s as good as going to Las Vegas,” said Uzodike about real estate investing. He said he’s planning to short sell all four properties.
Longtime owner-occupants have fared better. In July, Dedi and Kelly Coleman sold their Lilburn home of nine years for a price that was 35 percent higher than what they paid, but they had to shoulder a big chunk of the closing costs.
Values in their neighborhood rose steadily during the first five years they were in the house, Dedi Coleman said, then “over the last couple years you noticed it kind of tapered off. You kind of kick yourself for not moving a few years earlier.”
Still, the house sold quickly, Coleman said, so she’s pleased.
Retiree Michael Bleicher is frustrated.
He said he doesn’t know how much his five-bedroom Sandy Springs home has appreciated because nobody will buy it. Listed for $410,000, it’s been on the market for year.
“What the value of it is is what you can sell it for now, so I’m not happy with it now,” Bleicher said.
Sprawl leading to oversupply, foreclosures and a young homebuying population have all helped keep a lid on equity gains, real estate experts say.
Roger Tutterow, economics professor at Mercer University, said home values in Atlanta over the long-term have “done OK.”
Atlanta can spread out so land remains affordable, keeping home prices in check, Tutterow said.
The metro area has a year’s supply of homes in various stages of completion, which is roughly double what the inventory should be, according to the real estate research company Metrostudy.
“Sellers produced a lot of new product and that prevented existing homes prices from rising and from homeowners gaining equity,” said Jeffrey Humphreys, director of economic forecasting at the University of Georgia’s Terry College of Business.
Foreclosed properties scheduled for courthouse sales in November have risen 75 percent since 2006, according to Notivus/Equity Depot.
Atlanta has a lot of young or first-time homebuyers more prone to use unconventional mortgages, Humphreys said.
Those buyers don’t have much equity in their homes and are at greater risk of going into default, which can drag down the market, he said.
Buddy Edwards, who sells homes in northeast suburban Atlanta, said his business is off 40 percent to 45 percent and the average selling price has dropped from the low $300,000s to the low $200,000s.
“We’re selling less expensive homes and we’re selling less of them,” he said.
But as for Atlanta being an equity laggard, “I completely disagree with that,” he said.