This article first appeared at The Intown Atlanta Real Estate Examiner’s page at examiner.com…
“Expect the percentage of the portion of total sales in Atlanta represented by foreclosed properties to be high and to remain high for a few more years.”
Although the number of foreclosure sales fell somewhat after July, which contributed to somewhat more stable sales prices during that time, the impact of foreclosures in 2010 is expected to be significant.
“On the Mortgage Banker’s Association (MBA) conference call concerning the “Q2 2009 National Delinquency Survey”, MBA Chief Economist Jay Brinkmann said:
# The problem is moving to prime loans, and fixed rate prime loans. Although the delinquency rate is lower for prime fixed rate than for other loans, these loans make up 65.5% of all loans – so the increase matters.
# Brinkmann expects delinquencies to peak in mid-2010.
# Brinkmann expects foreclosures to peak at the end of 2010.”
As a lesson from 2009, properly priced properties continued to sell at a median of 97.1% of their original listing price, within a median of 23 days on market, compared to a median of 78.5% and 247 days for initially overpriced properties which made up 87% of listings in 4Q 2009.
2010 sellers should take note of the accompanying chart which reveals that as the number of foreclosure sales (red trend line) increased, the median sales price (gold trend line) of non-foreclosure properties has declined. Street for street, neighborhood for neighborhood, school district for school district if 2010 property sellers and listing agents do not know their foreclosure competition and do not comprehend the impact on appraisal of any given property at any given price point, then they are fools.
2010 buyers know that foreclosure properties and those that have been price-reduced may set up a more favorable negotiating environment for buyers, causing anxious Sellers to negotiate away more of their listing price. This is a national problem with a hyper-local impact on Atlanta’s submarkets.
“Although most of the delinquencies are in a few states – because of a combination of high delinquency rates and large populations – the crisis is widespread…historically house prices do not bottom until after foreclosure activity peaks in a certain area. Since the subprime crisis delinquency rates might be peaking, it would not be surprising if prices are near a bottom in the low end areas. But in general expect further declines in house prices – especially in mid-to-high end areas.”
Ignore the facts and join the ranks of the unsold and the continually distressed.