The Atlanta housing market took another beating in the months of August through September. According to the S&P Case-Shiller Index, we are now selling homes at prices not seen since 1999 in and around Atlanta, Dacula and Hamilton Mill.
Personally, I feel this number is a little generous as I see the prices hovering around 1997 levels and I see this every day in my real estate business. What this means simply is that a home you would have paid $200,000 for in 1997 has not appreciated at all and you can buy it for the same price today. Incredible with the fact that this same home would have been sold at a price of $300,000 just a few short (or long) years ago.
Case-Shiller set a baseline home price index of 100 in 2000, so an increase to 125 would indicate a price increase of 25 percent. Atlanta has been struggling along to keep up with national averages of sales price for a couple of years but at this point we are losing ground. The Atlanta index fell to 95.99 for September, which means the average home sale price is 4 percent lower than it was in 2000. We were hit with the biggest price decline for a city and came at a time when the national index was actually climbing 0.1 percent.
Just last night I met with a family in Dacula who had purchased their home for over $325,000 in 2008 and even with the most generous comparable sales they would struggle to sell for $265,000. I love my job but giving this type of news to a family that is looking to move is heartbreaking.
A main contributing factor to the price decline is the vast majority of foreclosure sales we are seeing in the metro area. Roughly 30 percent of ALL sales are foreclosed properties. This is a huge amount and one we need to get rid of in order to see price increases. Another factor that I feel is a issue is the price levels that some real estate agents (and yes I am a Realtor) are pricing homes at. Agents that work with sellers that need to do a short sale (home is worth less than owed) are pricing these homes WELL below market value. This does nothing positive for the housing market and will continue to press down on pricing.
In Dacula alone we have seen price levels drop dramatically since 2007 when are average sales price was over $205,000. We are now selling at an average sales price of $138,700!! This is a 11 percent year over year drop in home values and we need to stop the bleeding.
We will get out of this sooner than later but we all need to hang in there and ride out the storm.