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Prices Still Weighed Down by Atlanta Bank Owned Properties



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By : Allana Castro    99 or more times read
Home prices are still being dragged down by Atlanta bank owned properties despite the slowdown in the pace of increase of foreclosures in the area. A total of 9,587 foreclosure notices were filed in May, marking a small rate of increase from April.

The month-over-month increase rate in May was only one percent and the drop rate from the record high 12,568 filings in March was 24 percent.

In the first quarter, the median sales price for all types of homes in metro Atlanta fell by almost 5 percent from $115,600 during the same quarter last year to $110,100. The first-quarter median also marked an 11.8-percent drop from the $124,800 median in the previous quarter.

The national median home price also dropped in the first quarter, but it was higher than the median in Atlanta. The Atlanta median was 34-percent lower than the $166,100 nationwide median price for pre-owned homes.

Another real estate information provider also reported that bank owned foreclosures for sale helped push down home prices in Greater Atlanta in March to an average of $142,600, a decrease of 1.5 percent from February prices and a drop of 6.4 percent from prices in March last year.

Similarly, a recent study by Atlanta Journal-Constitution reported that Atlanta bank owned properties largely pushed home prices down in 2009 in all the 20 counties of metro Atlanta. In the five main counties Fulton, Cobb, Clayton, DeKalb and Gwinnett, house prices fell by a sharp 21 percent compared to prices in 2008. In two of the counties Clayton and Walton, prices plunged by 45 percent and 24 percent respectively in 2009, attracting a lot of homebuyers and posting high sales volumes during the year.

The plunge in house prices helped perpetuate the foreclosure cycle, as negative equity push homes into default and foreclosure. The percentage of underwater mortgages in metro Atlanta in March was high. Almost 35 percent of mortgages secured by single-family homes were underwater during the quarter.

In the entire first quarter, more than 32 percent of all residential mortgages in metro Atlanta or a total of 399,129 mortgages were underwater, and another 8 percent or a total of 97,605 mortgages were nearing the negative equity level.

Compared to the national negative equity situation, the rate of metro Atlanta was far higher, as only 23.3 percent of all residential mortgages nationwide were underwater in the first quarter.

The statewide negative equity level was also higher than the national rate, but the state was able to cut down the pace of foreclosure in April. The number of housing units that became bank owned properties in Georgia in April was 4,770 units, down by 10.9 percent from the 5,351 units that became bank owned residential properties in March.

As Atlanta bank owned properties continue to put a downward price pressure on home prices, analysts hope that they contribute to the resolution of the current housing crisis. The faster distressed homes are sold and occupied, the faster the recovery of the housing market.
Original Post: Prices Still Weighed Down by Atlanta Bank Owned Properties on BankOwnedHome.net.

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