A look at Atlanta’s median sales prices shown monthly, by year, illustrates the degree to which prices in 2009 have declined compared to other recent years going back to 2003.
Only in November and December of 2009 were median sales prices slightly ahead of the depressed prices during those months in 2008 and well below those of previous years.

Since failed listings in the fourth quarter of 2009 were 59.5% of total listings, and overpriced listings were 87% of total listings, the pressure on sellers is immense.

So, is hope alive?

Well, recovery hawkers and confidence builders touting easier money and steadier sales make their case for 2010 as a year of growth. Robert Freedman, the Senior Editor of REALTOR magazine, stated the following in a 2010 outlook article, which quotes Lawrence Yun, the Chief Economist for the National Association of Realtors:

“Economists disagree about how the economy will fare in 2010, but they agree the recession will be firmly behind us. Yun forecasts economic growth of 2.8 percent, up from a recessionary –2.5 percent in 2009. Varvares puts growth at a more robust 4.2 percent.
Improved stock market performance, the need for business to replenish inventories, and the continuing impact of the federal government’s stimulus efforts are all playing a role in boosting the economy, they say. Supporting it all is the improvement in housing. As home prices stabilize, households feel wealthy and start spending again, which drives retail and other business growth, in turn boosting confidence and the stock market, and creating a virtuous cycle of growth.
Yun predicts home prices to grow 3.6 percent in 2010, a significant rebound from 2009’s 12.9 percent national price decline.”

Lets see how the first quarter numbers shake out – as long as Uncle Sam is holding up the housing market, the housing market has every reason to start feeling better…

This article first appeared at The Intown Atlanta Real Estate Examiner’s page on March 7…

The median residential real estate sales price across 8 metropolitan Atlanta counties posted a small gain of .6% during the fourth quarter of 2009 compared to the fourth quarter of 2008.

Although slight, this is also the first positive quarterly change in median sales prices in the last 3 years.

On the downside, the median sales price in the fourth quarter was lower than that of the third quarter of 2009 and the year finished -12.5% below 2008 and -24.6% lower than 2007.
To offer some perspective, here’s a restatement of recent “sales” performance – a look at how many actually “sold:”

•Out of every 100 finalized listings, 60 failed to sell and 40 sold
•Of the 40 sold listings, 27 (67%) required a price reduction, when listing prices from previous listing periods are included, in order to attract a Buyer
•Therefore, if 60 failed due to overpricing and another 27 required a price reduction in order to sell, 87 out of every 100 listings were initially overpriced in 4Q 2009, resulting in either no sale, or a sale at a much-reduced price after a much-longer listing period.

Now, is this a momentum building?

Will 2010 reveal an overall decrease, once again?

Will 2010 be the year that the market begins a sustainable recovery?

The answer lies in pricing…a successful market turnaround will only occur when that 87% number comes down…

This article first appeared on March 3 at The Intown Atlanta Real Estate Examiner’s page…

Even though overall sales were +14% higher in the fourth quarter of 2009, not all segments had increased sales.

The activity for properties sold under $300,000 is particularly strong, with both new construction and resales up significantly from fourth quarter 2008 compared to fourth quarter 2009.
Gains were generally larger in lower price ranges and with resale properties compared to new construction.

By observing the numbers for new construction properties priced above $300,000, a gradual shrinkage is evident as prices increase, particularly in the $750000-$1 Million range and in the range of $1 Million and higher.

Of course, federal government stimulus is carrying the housing market and since the healthiest activity is under $300,000, the combination of relatively easy FHA lending and the federal and state tax credits are an evident catalyst.

Distressed properties still represent more than 1 in every 4 sales, keeping prices lower and days on market time longer for non-foreclosure properties.

Restating a regular theme here at the Atlanta Real Estate Examiner page, 87% of all properties are still initially being overpriced for current conditions, setting up price reductions, lower sales price to list price ratios and longer days on the market.

Closing that gap in realism is the only cure for a healthier Atlanta real estate market and until the gap shrinks, most sellers will fail and buyers will continue to glean the best terms and conditions for purchasing in history.

59.5% of all listings in the 8 counties were failed listings in the fourth quarter of 2009.

Looking ahead, the first two quarters of 2010 will probably look quite similar to the fourth quarter of 2009, but that is about as far ahead as this Examiner can see. All bets are off after the current stimulus package expires, and beginning in April, when FHA enacts their stricter lending guidelines.

“Although down from the peak percentage in the first quarter of 2009, the portion of total sales represented by foreclosed properties remained high throughout 2009.

Fourth quarter 2009 foreclosures were also a lesser portion (27.4%) of total sales compared to 4Q 2008 (32.2%)

The percentage is slightly higher than in the third quarter of 2009.

Foreclosures were 35.6% of fourth quarter 2009 sales in the <$200,000 price range. Since the percentage one year ago in this price range was 44.5%, the pressure is obvious on sellers who are not in distress.

Short sales place even more pressure on those sellers who “don’t have to sell…”

In 2010, the expectation of foreclosure and short sale properties arriving on the market in “possibly record numbers” is a financial phenomenon that savvy sellers can not ignore.”

You can find the rest of the article here, at Examiner.com…

“While segmenting sales by price range shows that the increase in sales came mostly in the price ranges below $300,000, sales rose above those of fourth quarter 2008 in all but the highest 2 price ranges – $750,000 to $1 Million, and $1 Million and up.

Sales increased by 14% in the <$200,000 price range and by 22% in the $200,000-$299999 range.

Of course, buyers and sellers must get to the closing table to even show up on the SOLD chart…”

Here’s the rest of the article at Examiner.com…

That’s right, we had a +14% sales increase fourth quarter to fourth quarter from 2008 to 2009.

Sales picked up, but were still behind fourth quarter 2007.

“Buyers in the eight primary metropolitan Atlanta counties – Cherokee, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, and Paulding – bought 8222 houses between October, November and December last year.

In 2008, buyers bought 7214 houses and in 2007, buyers bought 8746 houses.

During the fourth quarter of 2009 signs appeared that a long-awaited recovery in detached residence sales may be happening. However, comparing the fourth quarter of 2009 to the fourth quarter of 2008, is like comparing apples and oranges.”

Here’s the complete article, my second article published for examiner.com…