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Metro Atlanta Foreclosures spiked, so what does this really mean?

This photo and commentary are here to answer a question posed by Kirk Nace on Facebook today …

Foreclosure Sales Affect on Non Foreclosure Sales prices

Kirk Nace asked  me “where do the recent spiking foreclosure numbers (as reported by the AJC today – a 27% metro increase) compare with the actual number of total sales per month? What does distressed supply v. demand ratio tell you about the future of pricing?”

Here’s what we know from 2009 in metro Atlanta:

• As the number of foreclosure sales (red trend line) increased, the median sales price (gold trend line) of non-foreclosure properties has declined

• The number of foreclosure sales fell somewhat after July 2009, likely contributing to somewhat more stable sales prices during that time

Looking ahead, since January spiked “unexpectedly” (Kirk Nace and I expect this, but the feel good prognosticators don’t) we expect that the metro Atlanta median sales price trend will continue to decline in 2010, particularly in the second half of the year…probably by 8-9%.

As always, many of the Intown neighborhoods that I serve will hold up way better than others, and many of these neighborhoods are barely seeing ANY foreclosure inventory – just lots of old-fashioned overpricing and hopefulness marketing!

Comments

  1. Kirk Nace says:

    Great work Lee! Atlanta is however at least 5 years and an additional 25%-35% price decline away from a bottom. Prices always trail supply and demand (leading indicators) by at lesat 6-12 months (much more w/ foreclosures.) SELLERS take note, it will be well over a decade before you can get more for a property than you will get today. BUYERS – waiting for lower prices is a great idea IF you are a cash buyer. If however you are looking to finance, continued credit tightening and rising interest rates mean that buying today will actually be more financially savvy for many than waiting. IF you are ok with the distinct possibility of needing at least 20% down, and looking at a fixed rate of 9% or higher, when prices get to a bottom, then wait. Where I grew up there was a saying about a bird in hand v two in the bush . . . Do you have any similar sayings in Atlanta?

    Want help? I am a short email away Kirk@KirkNace.com

  2. Lee says:

    Excellent commentary, Kirk. The bird in the hand saying is an old African proverb, I’m pretty sure – here in Atlanta, we say “fools rush in, where wise men never go” and ATL’s Gucci mane would say:

    “…28 inch rims that’s what we talki’n bout…

    Ya either cash it in or we’ll cash ya out…”

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