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My Examiner article entitled “Did Atlanta’s median real estate sales price reach bottom in January 2009?”

This article first appeared at The Intown Atlanta Real Estate Examiner’s page at examiner.com…

Median sales prices appear to have reached bottom in January, 2009.

identifying bottom by median sale price

But, there is a lot more to consider.
The steep declines in median sales prices seen on the chart coincided with an acceleration in the number of foreclosed properties sold in each period. Now, in 2010, the word is out that foreclosure inventory, short sale inventory and distressed selling in general will lead the market…on another downward slide.

In early May, the Intown Atlanta Real Estate Examiner will examine the latest charts and statistics from the first quarter of 2010. Until then, speculation abounds and a lot of the speculation is worthy of making plans for the worst, yet hoping for the best.

And, hope is not a strategy.

In the meantime, some national forecasting is worth considering. The federal government has stimulated a short term period of relative stability. The federal government stops buying mortgage backed securities soon. FHA will stiffen their loan underwriting guidelines soon. How will these factors and other macroeconomic considerations “play out” and how will they ultimately affect housing prices in metropolitan Atlanta?

* The folks at Calculatedrisk.com recently quoted Lawrence Yun, the Chief Economist for the National Association of Realtors who is one of today’s most optimistic economists. He recently stated: “We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June … The real question is what happens in the second half of the year.”

“The NAR is currently forecasting an annualized existing home sales rate of 5.1 million homes in Q1, 5.8 million in Q2, and about 5.5 million in the 2nd half of 2010. I think those numbers are generally high – especially in the 2nd half of 2010.”

* Paul Smalera, a writer for Moneywatch.com, recently stated: “So even if you qualify for a rock-bottom rate buying may not be worthwhile in the near term. Especially not if you end up being underwater on your brand new mortgage.”

* Felix Salmon, a writer for SeekingAlpha.com, recently stated: “Throwing money at the problem will alter the amount of time it takes to finally arrive at a market-clearing, private-sector-generated level of house prices. But there’s little doubt that such a level is well below where we are right now. Which is yet another reason not to buy, at least for the time being.”

Quite a few others agree with Felix.

* Douglas A. McIntyre, who writes for 247wallstreet.com, recently stated: “The slowdown in housing sales, both for new and existing properties, also make it more likely that sellers will need to drop prices to attract buyers. Under those circumstances more mortgages will move underwater as downward pressure on prices remains a significant factor in the market.”

* Barry D. Wood, who writes about the global economy for the Huffington Post, recently stated: “What is most worrying is that foreclosures are still rising and an increasing number of homeowners are underwater on their mortgages, meaning that they owe more than what the home is currently worth…of the 57 million US home mortgages, 6 million are in the distressed category, meaning that they are either in actual foreclosure or payments are seriously delinquent. Foreclosed properties drive down prices.”

* Meredith Whitney, CEO of Meredith Whitney Advisory Group, told CNBC on Tuesday that there is a “corporate recovery, while the consumer continues to deteriorate.”

The catalyst, according to Whitney, is the Fed’s pulling back on purchasing mortgage backed securities (MBS).
“The asset classes of MBS and Treasurys are priced for a material correction in my opinion,” she said. “The only buyers of agency MBS are the Fed and banks, so you see how precarious that market is..If the Fed pulls back, that’s a really big deal… because there’s no substitute buyer.”

She state on Tuesday that “THE HOUSING MARKET IS SURE TO DOUBLE DIP” in this video from CNBC.

So, did Atlanta’s median real estate sales price reach bottom in January 2009?

Maybe, that depends on how deep the double dip, dips…

 

Comments

  1. dont accept says:

    Thanks mate. Nice submissions you have here. Got some extra links to direct to with a bit more information?

  2. Lee says:

    What exactly do you want direct links to?

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