Home foreclosures in Atlanta drove down prices in January as newly foreclosed residential units entered the market, according to a report released by the National Association of Realtors.
The median sales price for pre-owned single-family homes fell to $105,100 in January, a decrease of 10 percent from the median price in January 2009. To many housing analysts in Atlanta, the January decline was an unexpected turn because the November and December median prices showed steady increase and indicated Atlanta prices were beginning to recover.
Hank Miller, a certified appraiser and a broker, said that new foreclosures completed by lenders after deferring them because of the moratoriums most probably have put a heavy pressure on prices. As indicated in the NAR report, when people trying to search foreclosed homes see a lot of inventory, they become more aggressive in asking for more price discounts.
When the Case-Shiller Home Price Index was released last week and showed a price decrease for Atlanta in December, local real estate professionals were not alarmed because the index showed that the decrease was slowing significantly. The index showed that prices for single-family houses in metro Atlanta fell by 4 percent in December year-over-year.
As more home foreclosures in Atlanta are expected because of the rise in mortgage defaults in the area over the past several months, heavier downward pressure is expected to be put on home prices.
Georgia home foreclosures are also expected to resurge despite a month-over-month decline in January this year because of the sharp rise in number of underwater mortgages in the state. According to a Santa Ana, California research firm, 28 percent of all owners of mortgaged homes in Georgia were underwater during the October-December quarter. The percentage is equivalent to over 441,500 homeowners with mortgages.
Metro Atlanta had a higher percentage of underwater borrowers. About 31 percent of all mortgaged borrowers or 385,100 borrowers were in underwater situation in the October-December quarter.
Both the percentages of Atlanta and Georgia were higher than the nationwide underwater rate of 24 percent of residential mortgages in the U.S., an increase of 23 percent from the preceding quarter. The total value of underwater mortgages nationwide in the final quarter of 2009 was $801 billion.
According to analysts, another factor that will affect the number of home foreclosures in Atlanta is the rise in mortgage rates. NAR chief economist Lawrence Yun said that the rate for 30-year fixed-rate mortgages has risen to 5.1 percent and could reach 5.6 percent.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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