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Is Atlanta Considered a Declining Market?

A potential Buyer named Penelope (named after Penelope Pitstop?) asked this question on Trulia Voices this week and she got this response from me, in addition to 11 other answers…here’s an edited version…

Yes, Atlanta is a declining market. Steve in Rohnert Park is right and better data sources than Case Schiller back up that roughly 10% decline.

My latest advisory letter from Steve Palm states – for a broad “metro Atlanta” market – the word “decline” 14 times. If he put the bottom line up front then you would read this:

“Oil prices have been falling and the government is doing their best to stabilize our financial markets. In order for a housing uptick to occur in 2009 oil has to fall and stay down and the financial markets must have the ability to finance home mortgages.”

That being said, here is Steve Palm’s September 21 letter in it’s entirety…

From: Steve Palm at Smart Numbers PO Box 636 Marietta, GA 30061-0636

“There were 4,308 closings for all single family in August. This is a 33% decline from August 2007 and the 18th consecutive year-to-year monthly decline.

There were 3,737 closings for single family detached or a year-to-year decline of 31.1%. This was the 18th consecutive year-to-year decline and the 25th out of the last 26th for single family detached. After lags are reported the percentage decline will be at least 20% or the 12th consecutive decline of 20% or more.

The year-to-year decline for condos & townhomes was 43.3%, as 572 units closed in August versus 1,009 for the same year ago period. For the first eight months of 2008, condos & townhomes have closed 31.6% less units versus the first eight months of 2007.

The first year-to-year decline for all single family during our downturn occurred in September 2006. Closings were also down October-December 2006 versus October-December 2005, so there is a good chance we may start experiencing yearly period declines for three straight years for the rest of 2008.

Decreasing demand results in declining prices and for the 9th consecutive period the average price for all single family declined from the same year ago period. The average price in August for all single family was $233,394 versus $259,316 for August 2007 or a decline of 10%. This was also the 7th consecutive monthly period with a year-to-year average price decline of 9% or more.

The average sale price for single family detached was $241,761 for August or a decline of 10.8% for the same year ago period.

The average sale price for condos & townhomes in August was $178,747 or an 8.7% decline from August 2007. The year-to-date average closing price for condos & townhomes is $180,752, which is lower than the average closing prices for the years 2002-2007. Condos & townhomes have not had an average sale price under $170,000 since October 2001, but if demand remains weak there is a good chance the average price may drop under $170,000 before the end of the year.

There were almost 1,000 less withdrawn listings for all single family in August versus August 2007. The reason for the large reduction is that there were a lot more listings on the market last summer that were “testing” the market, but with prices declining, owners are less inclined to try and sell their home this year. In this market, if a home is for sale there is a good chance the owner has to sell.

There were 7,563 expired listings for all single family in August. This was only 224 more expired listings than August 2007 and the smallest year-to-year percentage increase since April 05-06. This may be a sign that a bottom may be near.

Oil prices have been falling and the government is doing their best to stabilize our financial markets. In order for a housing uptick to occur in 2009 oil has to fall and stay down and the financial markets must have the ability to finance home mortgages.

Y’all got that?

Buyers – get out and get your real estate on!

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