The Standard and Poor's Case-Schiller Home Price Index report for November 2007 was just released, and metro Atlanta's home prices dropped 11.2 percent when compared to the same period a year earlier.
The good news? An 11.2 percent drop is significant; however, it beats the national average of 18.2 percent. Some other large metropolitan areas saw prices drop over 30 percent, while the best performer was Dallas, Texas which only had a 3.3 percent drop.
In my opinion, as long as the record number of metro Atlanta forclosures continues, we'll see average home prices drop. Banks are selling homes at drastically reduced prices in an effort to move them. This is providing great opportunities for buyers, but affecting metro Atlanta home values. Don't expect to see home values begin to rebound until the inventory of bank foreclosures is significantly reduced.
The Atlanta Journal Constitution published the following article in today's issue that summarizes the latest figures:
Atlanta’s drop in home prices not as sharp as elsewhere
Nationally, prices are down 18.2% compared to year earlier
MICHAEL E. KANELL
The Atlanta Journal-Constitution
Tuesday, January 27, 2009
Metro Atlanta home prices have fallen along with those in the rest of the nation’s largest urban areas during the past year, but the descent here was not quite as fast, according to a high-profile ranking released Tuesday.
In the 20 largest metropolitan areas, home prices in November were down an average of 18.2 percent from November 2007, according to Standard & Poor’s Case-Shiller Home Price Index.
While the report was not quite as bad as some expected, it was the sharpest one-year fall ever.
“The disappointing news is that the declines are still accelerating, said Adam York, an economic analyst at Wachovia. “It emphasizes just how much stress the housing market is under.
The worst of the damage has come in cities that led the housing bubble earlier this decade.
For instance, metropolitan Phoenix saw home prices plunge 32.9 percent in November from a year earlier, while prices in Las Vegas dropped 31.7 percent and home values in San Francisco fell 30.8 percent.
By contrast, metro Atlanta, which was continually among the leaders in home construction, saw prices steadily advance, but never at that kind of pace. So while the Atlanta real estate market has been badly pounded, it has not suffered quite as much, with prices falling an average of 11.2 percent over the one-year period of the survey, according to Case-Shiller.
From October to November, Atlanta prices slipped 2.7 percent.
Its bubble also did not burst quite as soon as elsewhere: Atlanta continued to see price increases after the national average had peaked and started downward.
The Case-Schiller index for the largest 20 markets topped out and started to slip in mid-2006 — a full year before prices crested in Atlanta.
By November 2008, Atlanta prices had dropped 14.6 percent from that peak. In contrast, the overall index is down 25 percent. Atlanta’s prices are now back to levels last seen in May 2003. The overall index has returned to its level of early 2004, according to Case-Shiller.
None of the 20 cities in the Case-Shiller index posted a gain in prices from October to November, or from November 2007 to November 2008. The smallest declines in the surveyed cities came in Dallas, which dipped only 3.3 percent from last year, and Denver, where prices slipped just 4.3 percent.
David M. Blitzer, chairman of the index committee at Standard & Poor’s, said he was encouraged that, after months of worse-than-expected declines in housing statistics, the real data weren’t drastically worse than the expectations.
“Maybe the pessimism has been slightly overdone, he said.
Still, trying to determine when prices will bottom out remains guesswork. The most optimistic projections: mid-2009.
— The Associated Press contributed to this article.