Metro Atlanta housing prices plummet

We kicked off the week talking about the economic challenges facing metro Atlanta and the region’s need to adapt to suit the modern real estate marketplace.

Yesterday, we got a rather harsh confirmation that change is indeed necessary. According to the latest S&P Case-Shillernumbers, housing prices in the 20 largest metro areas fell by 3.5 percent from February 2011 to February 2012.

In the 28-county metro Atlanta region, however, the year-to-year price decline was 17.3 percent, easily the largest drop in the nation. The decline was twice as large as that in Las Vegas, the second worst-performing metro region in the country.

As the Case-Shiller analysts put it:

“Phoenix and Atlanta stand out this month in terms of their contrasting relative strength and weakness in the early 2012 housing market. At one end of the spectrum, we have Atlanta posting a double-digit, and lowest on record, annual rate at -17.3%. Atlanta has now recorded five consecutive months of double-digit negative annual rates and seven consecutive monthly declines. On the other hand, Phoenix has posted two consecutive months of positive annual rates, with its latest being +3.3%, and five consecutive positive monthly returns.”

Five years ago, housing values in Atlanta were comparable to those in Charlotte, Dallas, Denver and Cleveland. In fact, Atlanta was a close second to Denver among those five. But as the chart below documents, that’s no longer the case.

housing

I don’t think you can look at that data and shrug it off as a momentary blip. It’s also not the inevitable consequence of the larger national economic situation. This is a long-term problem, and it’s a metro Atlanta problem.

– Jay Bookman

447 comments Add your comment

Doggone/GA

April 25th, 2012
7:26 am

“This is a long-term problem, and it’s a metro Atlanta problem.”

And I think it’s only a problem in the sense that people got conned into paying big bucks for houses that weren’t worth anywhere NEAR their true value. This seems to me to be more like a correction back to saner prices.

Doggone/GA

April 25th, 2012
7:28 am

“that weren’t worth anywhere NEAR their true value.”

Ooops! I meant to say “that weren’t worth anywhere NEAR their “market” value.

Granny Godzilla - Union Thugette

April 25th, 2012
7:32 am

Let’s face it….we have a good ole’ boy government, sad schools,
crappy transportation, water issues….

Plenty of reasons for transplants to just not be that into us.

Oh and, it’s largely our own fault.

Don't Forget

April 25th, 2012
7:32 am

It ain’t gonna get any better until wages improve either. The unemployed aren’t buying houses, they never do. This is a symptom of problems the employed are having.

Gale

April 25th, 2012
7:32 am

Ugh. This is not what anyone wanting to sell or even remodel a house wants to see. I would love to buy a new house at these rates, but there are already homes renting in my neighborhood because the owners cannot get their asking price. Should I put more money into my home that I will not see any return on? The problem is that the rate of decline is scattered. Some areas are not nearly this bad. But this is a headwind the seller has to overcome when the buyer insists the house be devalued.

Eric

April 25th, 2012
7:35 am

I agree with Doggone–housing in metro Atl. had been way overpriced for some time. What is more, and hidden from view, are the untold thousands of dollars spent at Home Depot, Lowe’s etc. in the last decade on home improvements, appliance upgrades, etc. that people didn’t get the return they thought they would. Maybe it was fine just to keep that older dish washing machine after all? And no, Obama is not to blame, as some will try to assert. This is a correction inherent in a capitalist economy, unfortunately.

marty

April 25th, 2012
7:39 am

Jay, do you have a breakdown on inside the perimeter vs. outside valuations. I know people inside that are able to sell at around their asking price.

Mick

April 25th, 2012
7:41 am

stands

Yes, that about sums it up :lol:

Jay

April 25th, 2012
7:43 am

Marty, I haven’t seen numbers broken down that way, but that’s the anecdotal evidence I hear as well. On the other hand, it’s important to note that there are certainly areas within the perimeter that have suffered serious declines as well.

stands for decibels

April 25th, 2012
7:44 am

What is more, and hidden from view, are the untold thousands of dollars spent at Home Depot, Lowe’s etc. in the last decade on home improvements, appliance upgrades, etc. that people didn’t get the return they thought they would.

and I have to think that these associated businesses will suffer as well, since it gets harder and harder to justify the expense of some of these upgrades. Hey, my kitchen works just fine, let some other sucker redo the cabinets and countertops; my deck doesn’t really need to be any bigger than it is; that front porch, yeah, I’ve always thought it’d be nice to extend it but that’s pricey…

Just maintain the property, keep it presentable, and hope you don’t take too much of a bath when you *have* to sell and move to something of equal or lesser value. Lotta people thinking that way around here, these days, I suppose.

Mick

April 25th, 2012
7:48 am

Down here in miami land, funny enough in today’s herald there is an article about how home prices are stabilizing and creeping upward – if only! A lot of properties have been bought by brazillians, who are most welcome to keep buying away! Then, maybe I can finally get out…

TaxPayer

April 25th, 2012
7:50 am

I think your chart should help some to realize just how much of our economy in Georgia depended on housing. It was way out of line with true population driven demand and it showed for anyone willing to look around. The growth down in Gwinnett county back in 2003, when we lived down there, was way out of line with demand yet the builders just kept pumping out the subdivisions as though there were no tomorrow. Those were not real jobs no matter how much some want to believe otherwise.

ByteMe - Political thug

April 25th, 2012
7:51 am

What is more, and hidden from view, are the untold thousands of dollars spent at Home Depot, Lowe’s etc. in the last decade on home improvements, appliance upgrades, etc. that people didn’t get the return they thought they would.

Anyone who bought the nonsense being sold by realtors or HGTV or their remodeler that you could get money out of a home improvement project was being sold a bill of goods. Our remodeler was clear that we were doing the improvement for us and maybe to help it sell faster, but certainly not for getting the money out. And this was his statement to us in 2007, before the extent of the market damage was obvious.

Lord Help Us

April 25th, 2012
7:58 am

I see it a little differently. Falling prices in Atlanta, will, at some point, attract buyers.

Out here in the Suburban sprawl, I am amazed at the amount of new construction I see given the housing market…weird…

Call it like it is

April 25th, 2012
8:00 am

Not worried about it. I bought my house not to sell, but to live in. I make upgrades not to add value to the home, but add value to my life. I dont blame the market on traffic, Obama or Bush but greed. People always want bigger and better, never satisfied.

Gale

April 25th, 2012
8:01 am

I am always amazed at the lamentations over few new housing starts. We had so many new homes built in the last ten years that there is hardly anywhere to put more. The new homes they built more recently are so far out, that gas prices make those unattractive, no matter how big they are.

Doggone/GA

April 25th, 2012
8:01 am

“Not worried about it. I bought my house not to sell, but to live in. I make upgrades not to add value to the home, but add value to my life.”

Amen to that!

carlosgvv

April 25th, 2012
8:03 am

Crime in the Atlanta metro area has to be a factor in this housing decline. How many times have we heard people say they would never ever set foot in Atlanta again? Recently, a MARTA bus came between two people shooting at each other. The bus was hit several times and most of us paid little or no attention to this because it’s what we’ve come to expect in Atlanta. I wonder how many people who live in the Atlanta area would move if they could? I know this is not politically correct, but ignoring it will not make it go away.

Fred ™

April 25th, 2012
8:04 am

What is more, and hidden from view, are the untold thousands of dollars spent at Home Depot, Lowe’s etc. in the last decade on home improvements, appliance upgrades, etc. that people didn’t get the return they thought they would.

People can laugh at Clark Howard but for the 20 years I’ve been listening he’s been telling people that you DON’T raise the value of your home with home improvements. And he’s right. But do people listen? Oh hell no. You do “improvements” because you want them, not to increase value.

I had many financial advisers tell me how stupid I was to NOT take out loans against the equity in my house so I could invest in stocks and what not. i wonder where they are now? I’m here, safe and secure in a house that is worth more than it’s loan amount at 3.5 percent fixed for 15 years. LOL If “honey” hadn’t decided we needed to move ITP I’d be sitting in a house that was PAID FOR.

Thomas Heyward Jr

April 25th, 2012
8:04 am

If this trend continues, Obama will have to bail those banks out again.
You know…….to save us all from a calamity.

JamVet

April 25th, 2012
8:06 am

Not only are our politicians some of the most corrupt and inept in the country, our titans of commerce are as well.

This state had a record number of bank closings, costing innocent people hundreds of millions of dollars. With virtually no justice for the criminal negligence therein, of course.

There was a great program on PBS last night – Money, Power And Wall Street.

If only our willfully ignorant, spinally challenged Republicans cared enough to learn exactly what happened. Who did what to whom and when. They’d drop their moronic talking points puked up by their shameless oracles on TV and radio.

And take a wild guess which state was mentioned as Ground Zero in the nation’s subprime lending debacle and predatory lending schemes?

Thanks Sonny Perdue, et al…

Lord Help Us

April 25th, 2012
8:07 am

‘Obama will have to bail those banks out again.’

Words escape me…

Georgia on my mind..

April 25th, 2012
8:07 am

Georgia voted in 2010 to send a message…somehow things are not looking any brighter.

http://www.youtube.com/watch?v=_kH_EZF0XqM&ob=av2e

Thomas

April 25th, 2012
8:07 am

Jay- still looking for your report on N Fulton/ E Cobb with top shelf public schools that are 40%+ minority and a more robust real estate market. Maybe get in the car, sit in 400 North traffic and look at the activity versus your traditional ignorant reporting?

To those who are “embarrased” about Georgia you may want to research Ga. population growth (and take a peek in the mirror)

Whatever

April 25th, 2012
8:08 am

Iceland didn’t bail out it’s banks and they are on the road to recovery while we and Europe struggle on. I think Bush and Obama got this one wrong.

http://finance.yahoo.com/news/lesson-iceland-ireland-dont-bail-130200017.html

TaxPayer

April 25th, 2012
8:08 am

I have not kept up with all the activities in the housing market lately but I did hear from some acquaintances that some of the recent foreclosure activity was due to the fact that the owners would not be held responsible for the difference between the bank’s cost and the selling price in a short sale under some new program.

Jay

April 25th, 2012
8:08 am

Carlos, crime in the metro region is DOWN substantially, which makes your whole argument rather ludicrous, don’t you think?

http://en.wikipedia.org/wiki/Crime_in_Atlanta

stands for decibels

April 25th, 2012
8:09 am

how stupid I was to NOT take out loans against the equity in my house so I could invest in stocks and what not. i wonder where they are now?

Still married to Andrea Mitchell, I guess.

Misty Fyed

April 25th, 2012
8:17 am

I’ve lived in my house about 15 years. 10 years ago they built a subdivision near mine. The lots were half the size of mine. The homes were roughly the same square footage and same quality but the homes sold for over twice what I paid for mine. They sold slowly, but sold none the less.

There were no regional changes to justify the increase in the housing cost except the fact that someone was willing to appraise the homes high and someone was willing to pay that cost. I suspect we are seeing the correction for those mistakes now.

ragnar danneskjold

April 25th, 2012
8:17 am

First step for an alcoholic is to admit there is a problem. Generations of taxpayer subsidy for this one sector of the economy has led to a dislocation of resources, now trying to find the real bottom. The first step to a cure is to abolish FNMA and FHLMC; the second step is to limit mortgage interest deductibility on income taxes, maybe to an amount equal to the standard deduction, or perhaps abolition of the deduction for new mortgages. When government tax policies have a market affect, preferring one element of the market to another, a painful correction can always be anticipated.

Mad Max

April 25th, 2012
8:19 am

Jay, I don’t get your case for connecting the dots to “and the region’s need to adapt to suit the modern real estate marketplace.” The prices for these new modern real estate ventures are also way over valued (cost per sq ft) so I don’t see any great benefit over traditional suburban housing.
Buying a home is just that and unfortunately, people got greedy and believed that it was a sure fire investment. We all hope when we buy that the house will appreciate over time, but there is no guarantee. I have seen both sides in my lifetime and had an exchange of ideas with the Assessors office on this topic once when I appealed my valuation as she was incredulous that I thought my home was worth less than what I paid for it as their model did not allow for that to happen. There are still benefits to home ownership such as tax implications, raising your family where you want to, the joys of manual work(repairs, gardening, etc) that a lot of us don’t get in our daily lives, not having to put up with noises that are associated with “communal housing”, waking up to birds versus delivery trucks so if you bought your house as a home, having some privacy, space to relax in, a place to park, room to engage in your hobbies, etc; it’s still not a bad life investment. If you bought your house as a pure money investment, then you have to understand that investing carries risks (no different than stocks and other types of investment – I’ll sell you some worthless Nortel if you want) and you have to accept that when you make an investment or you shouldn’t invest. How many of these same people would have borrowed the same amount of money to invest in the stock market? Probably none but they got greedy and wanted to believe that it was a foolproof investment. It is a long term equity builder but it is not an investment for the foolhardy. The old adage applies, your house is only worth what the next guy is willing to pay for it and that is why banks traditionally wanted a 20% down for so long to protect themselves. The 0 – 10% down is a relatively new phenomenon brought on by our social engineering government which generated a great housing boom (and a great housing bust). As I said at the top, I don’t see how you connected the dots….

Whatever

April 25th, 2012
8:20 am

ragnar,

If we had a consumption tax with no deductions and a way to keep those in poverty from being taxed on the necessities of life we’d be way better off. The wealthy would pay more by default because they spend a lot more and the poor would pay very little as they don’t spend much.

Jm

April 25th, 2012
8:20 am

Atlanta looks to be headed toward being the next Detroit.

Evacuate while you can!

There’s no job growth driver in Atlanta. And you have high taxes to boot. Not a recipe for success.

Redistricting lines will not help Georgia

April 25th, 2012
8:20 am

Georgia’s Redistricting Lines Approved by Justice Department

The office of Georgia Governor Nathan Deal says the U.S. Department of Justice has approved the new congressional and legislative maps drawn by state lawmakers this past summer. Under Section 5 of the Voting Rights Act, Georgia must receive approval from the federal government before any changes in election practices or procedures are implemented.
“The state put forth a tremendous team effort. The maps offer rational district lines, equitable representation and meet the strict standards of the Voting Rights Act,” says Governor Nathan Deal. “The Justice Department’s decision demonstrates that our state’s districts serve our diverse population well.”

http://www2.wsav.com/news/2011/dec/23/3/georgias-redistricting-lines-approved-justice-depa-ar-2923682/

Jm

April 25th, 2012
8:22 am

Atlanta the home of:

High sales taxes
High property taxes
High income taxes

And bad schools. And bad roads.

Whatchya gonna do?

ragnar danneskjold

April 25th, 2012
8:24 am

Dear Whatever @ 8:20. broadly agree. Friedman’s “negative income tax” could surely be adapted?

TaxPayer

April 25th, 2012
8:26 am

The wealthy would pay more by default because they spend a lot more and the poor would pay very little as they don’t spend much.

And then the wealthy would look around and ask why do the poor pay nothing while I pay for everything. This is not fair. Everyone should be responsible for their own needs. THIS IS SOCIALIST. I demand lower taxes and I will have my way for I can afford it… been there

stevie ray...Clowns to the Left and Jokers to the Right..here I am...

April 25th, 2012
8:26 am

JAY,

I’m learning a new money saving phrase….”STRATEGIC DEFAULT”…I’m short selling my ridiculous home since kids are almost all gone…banks are horrific to deal with, especially since they know they no longer have to take any meaningful risks because idiots in DC are more supportive of banks than tax payers…may as well screw them while possible…

Atlanta Mom

April 25th, 2012
8:26 am

The top 1% will only buy so many houses. The recovery has to come to the other 99%

JohnnyReb

April 25th, 2012
8:27 am

I see you Moonbats are no better on housing than politics – surprise.

The idea that Atlanta housing was priced too high vs the national market is ridiculous. Why do you think Atlanta has been a magnet? It was not because housing was priced high.

There are two glaring problems with the metro housing market.

First, too many starter or cheap homes coupled with the do-gooder no down payment, no credit check, no chance of ever being able to pay for it homes.

Second, the continued government intervention, especially with Obama trying to save those poor people, that does not let the market take its natural course. When the government gives up on giving people money to save their home the market will start recovering. Capitalism has a natural course.

Jay

April 25th, 2012
8:28 am

Mad Max, Ragnar:

Those national-scale arguments do not explain metro Atlanta’s experience this late into the economic crisis. Again, our experience is very different from that of other metro regions — a decline twice as large as the No. 2 decline.

That suggests pretty strongly that there is something unique to Atlanta playing out here. Part of that explanation has to be our failure to address issues of traffic, water, infrastructure, etc. Part of it also has to be the fact that the mode of development taken by metro Atlanta for the last quarter century is now out of fashion in the modern real-estate market.

massachusetts refugee thug

April 25th, 2012
8:28 am

my cobb county home (paid for, thank g0d) is now worth less than what i paid for it new in 1991. that’s just messed up.

Lord Help Us

April 25th, 2012
8:29 am

sr – then YOU are the problem.

You engaged in a contract to pay…it is not the bank’s fault you overspent.

Mary Elizabeth

April 25th, 2012
8:29 am

Last evening I watched the two hour, Part 1 Frontline broadcast (PBS – TV) entitled, “Money, Power, and Wall Street,” in which former Governor Roy Barnes was interviewed regarding the home mortgage collapse because of Georgia’s significant role in the unscrupulous subprime lending practices. Barnes, evidently, had been successful in 2002 in getting legislation passed that curtailed these types of subprime home mortgages. However, according to the program, Georgia’s legislators repealed Barnes’ efforts in the next legislative session, and the unscrupulous banking practice continued in Georgia, which later became a national focal point for the national financial collapse of 2008 because of Georgia’s heavy investment in the home mortgage bubble, which collapsed.

I highly recommend this program for many reasons. The segment which showed how presidential candidate Obama took charge at a called White House meeting during the fall of 2008 with President Bush, Tim Geithner, Nancy Pelosi, and others, in which candidate John McCain had announced that he was leaving his campaign to attend, was particularly telling. Those who consider Obama to be a weak president regarding financial matters would be particularly interested in this segment, which refutes strongly that point of view. It was McCain who came off very weak in this meeting, even to Republicans. The program focuses not only on America’s financial collapse of 2008, but also on the worldwide financial collapse, which was precipitated by these greedy lending practices. Part 2 of this program will be aired May 1. See link, below.

http://beta.wosu.org/television/frontline-money-power-and-wall-street/

Great State of Georgia

April 25th, 2012
8:29 am

The people of this “Great State” thought that they could change the direction of the state by electing an all Republican administration. Every politician that was running for ANY state office was running against President Obama. Their platform/motto was geared towards Washington and not focusing on Georgia. How is that working out now Governor Deal and company? Georgia has several titles and they are all negative!

stevie ray...Clowns to the Left and Jokers to the Right..here I am...

April 25th, 2012
8:30 am

SCREW the poor….at least the top 50% of them who pay no taxes and eat all the cheese. I’m sick of paying for their flat screens, extra children, and other crap and waste. We have the most progressive tax code in the world and the only way to balance budget sans some miraculous recovery (apparently not during BO’s tenure) is for the high end of those who pay nothing to have to pay…sickening the slack these folks are cut…all for votes and the entitlements have the exact opposite effect as needed…keeps them down and voting DEM who they should turn on…

Lord Help Us

April 25th, 2012
8:31 am

‘especially with Obama trying to save those poor people’

Yet again, words escape me…

JohnnyReb

April 25th, 2012
8:31 am

Jay, how does the per capita income of the metro area compare to the rest of the country? When the market is flooded with starter homes and the people losing them are low income, that makes it really hard for a normal recovery. No upward mobility.

Lord Help Us

April 25th, 2012
8:32 am

‘SCREW the poor….at least the top 50% of them who pay no taxes and eat all the cheese.’

From the guy that is about to cut and run on his mortgage…too ironic…

Peadawg

April 25th, 2012
8:33 am

“And bad schools.”

Bad Deal and the rest of the GOP needs to stop cutting education.

Jay

April 25th, 2012
8:33 am

“First, too many starter or cheap homes coupled with the do-gooder no down payment, no credit check, no chance of ever being able to pay for it homes.”

Right, JohnnyReb. That explains all those empty mansions alongside golf courses in the northern suburbs. That explains why the ritzy Reynolds Plantation at Lake Oconee went bankrupt. It’s the fault of all those poor people ….

Misty Fyed

April 25th, 2012
8:33 am

A good buddy bought a $500k home in he could barely afford as a retirement investment. Instead of saving, he was banking on selling his home and banking the equity as his retirement account…

Ouch..

Ayn Rant

April 25th, 2012
8:34 am

An unmistakable sign of a failed economy is when the value of tangible property tumbles way below replacement cost.

Probably God is punishing us for being too lenient with immigrants, racial minorities, gays, and women seeking contraceptives and abortions. The Governor should call the good old boys of the Legislature back in session to deal with our economic problems by improving public morality. Or, perhaps the Governor should lead us in prayer from the steps of the Capitol. Remember ol’ Sonny’s rain dance? We nearly drowned in the result!

JohnnyReb

April 25th, 2012
8:37 am

Jay

April 25th, 2012
8:33 am

“First, too many starter or cheap homes coupled with the do-gooder no down payment, no credit check, no chance of ever being able to pay for it homes.”

Right, JohnnyReb. That explains all those empty mansions alongside golf courses in the northern suburbs. That explains why the ritzy Reynolds Plantation at Lake Oconee went bankrupt. It’s the fault of all those poor people ….
_______________

Jay you know the situation is not simple. You can chalk those ritzy places up as fuel toward the housing bust. Cheap money, more money than equity, etc.

For the metro area, that same fuel brought in too many people who bought too many newly built homes or when they bought an existing home the exiting owner overbought.

And, I don’t recall anywhere in my post that I blamed poor people.

ragnar danneskjold

April 25th, 2012
8:37 am

Dear Jay @ 8:28, good morning, I respectfully think the problem less complex than you suggest. Atlanta and/or Georgia are comparatively less attractive now than in the past. Just as California has lost 4 million people – voting with their feet – in the recession, perhaps there is less here that people find attractive. WSJ has been arguing that state income taxes may be a significant factor in where the money is going. Georgia used to be attractive as a place with minimal government; getting harder to tell us from the nanny-state now.

Mad Max

April 25th, 2012
8:37 am

Jay, part of it may be that our housing boom was also late in the cycle. When I moved here in the early 90’s, housing was extremely low compared to the rst of the larger metropolitan areas in the country. Our growth was just starting, spurred on by the 96 Games and it peaked in the miearly to mid 2000’s. Other areas had seen this growth a good 10 – 20 years earlier so they had already experienced fluctuations in their housing markets. Just a possibility.

JamVet

April 25th, 2012
8:40 am

“Second, the continued government intervention, especially with Obama trying to save those poor people, that does not let the market take its natural course.”

Take its natural course???????????????

Unfrigginbelievable, huh LHU?

To this very day, the stunning lack of knowledge about this topic is truly staggering. And frankly disheartening.that a certain segment of society refuses to educate themselves and gain any working knowledge of these matters.

To that point ME, getting these willfully ignorant neocons to actually learn the pertinent – and damning – facts about this topic is futile with a capital F. Not because they are stupid, but because they DON”T WANT to know the truth.

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 25th, 2012
8:40 am

buy buy buy buy buy.

We can haz rental properties. We can retire early.

ragnar danneskjold

April 25th, 2012
8:40 am

Dear Jay, I do not mean to abandon my larger argument – still think pro-active government policies led to the core problem, a nationwide real estate bubble – but I think “more of the same except local” is not the cure for what ails us.

Whatever

April 25th, 2012
8:40 am

stevie ray,

I don’t like seeing the ‘poor’ with big screens and cellphones either. It does smack of a basic misunderstanding of how to mange funds.

Be that as it may, a consumption tax does tax you on what you spend so if the poor go buy a big screen and a cell phone then they pay the exact same tax on those items as the rich do. Totally fair. If the poor go out and buy a humongous yacht they would pay the same tax.

Not taxing food and other necessities would be across the board for rich and poor. So you end up with the same taxes being paid for the same items by everyone. It just so happens the rich will buy more of those items and will pay more taxes. If the rich don’t want to pay the taxes then just don’t buy stuff. Easy enough.

godless heathen©

April 25th, 2012
8:43 am

Like others above, I didn’t buy a house to make money on it. When I’m done with it, it will probably depreciated to almost no value and they can dig a hole and push it in, along with the remainder of the payment book.

Joseph

April 25th, 2012
8:44 am

All this is happening under Obama’s watch Jay? Does he have any answers for this except to blam Bush?

Whatever

April 25th, 2012
8:45 am

Jay,

I think JohnnyRebs argument applies for the Lake Oconee projects as well. My wife’s father was a bank president. They were very careful through all this to check out all of the loans they gave out and turned down many who went other places. Their clientele were very ’successful’ types. The bank is still doing very well.

Many ‘rich’ people were given easy loans they didn’t need to get based on their financials and it’s costing us. I don’t think it was only the poor who were given these loans.

barking frog

April 25th, 2012
8:45 am

Buy your dream home and
don’t consider it an
investment.

Steve

April 25th, 2012
8:45 am

We overbuilt. We don’t have the infrastructure. We actually pay VERY LOW property taxes (Jm) compared to most areas, and we are suffering from that lack of revenue (crappy infrastructure, not enough police, bad roads, a water fiasco).

And of course the corruption around the mortgage industry and the GOP deregulation that led to this mess.

We got greedy. Nobody wants to pay taxes yet we complain that we don’t have the public services or infrastructure. Businesses are leaving.

It’s the GOP good ole boy mentality that really killed us here.

Doggone/GA

April 25th, 2012
8:46 am

“It just so happens the rich will buy more of those items and will pay more taxes”

Not in the aggragate they won’t. 10,000 rich people buying a big screen TV dont spend nearly as much as 1,000,000 other buyers buying the same TV.

My idea is to have a progressive Sales Tax, based on the total price on the receipt at the time of purchase. There could be “bands” just as their are in Income Taxes, but the basic premise is that within those bands, the more you spend – at any given time – the higher the percentage of taxes you pay. With, as you say, exclusions for things like food.

Steve

April 25th, 2012
8:48 am

LOL – Atlanta’s problems are Obama’s fault???????? And we are in a ultra red state????

Wow…

carlosgvv

April 25th, 2012
8:49 am

Jay – 8:08

The first sentence in that site you reference:

“Crime in Atlanta, while ABOVE the National median and a MAJOR problem for the City”

Since this site, your reference site, says crime is still a major problem in Atlanta, I’m at a loss as to how you think my post is “ludicrous”. As long as crime is still above the National average and a major problem, it has to be factored in when considering any of Atlanta’s economic problems.

Jay

April 25th, 2012
8:49 am

Poor Joseph.

Let me get this right: It’s Obama’s fault that housing prices have fallen five times faster in metro Atlanta than in the rest of the top 20 metro areas?

Mark in mid-town

April 25th, 2012
8:50 am

I think Georgia and Atlanta are poised for a tremendous comeback. If one is paying attention, the evidence is starting to show that. The Shiller Index is still a rear-view mirror look, and doesn’t take into account the very most recent developments. As for why Atlanta area housing dropped so much, I think it might help to compare the overall demographics of those who moved here in the 1990s with those who moved here the next decade. While the movement was still great in numbers, the mix was very different with a much larger share of those moving here being on the lower rungs economically compared to the 1990s. They were almost all given mortgage loans even though few should have been. Atlanta area became such a magnet for such people, more than just about anywhere else. Why was that? I think that’s the root of why Atlanta housing fell as much as it did. Nonetheless, it’s fallen so much that Atlanta is now once again in great competitive position to attract the next wave of people looking to escape the high-tax parts of the country.

Steve

April 25th, 2012
8:52 am

Carlos – we pay low taxes, we have a corrupt city government, and we don’t have an adequate police force.
Atlanta has always been this way because nobody wants to clean up the city govt. If we had a decent govt here maybe some of our tax money would go to the police and not corruption. And I’m a liberal…

Lord Help Us

April 25th, 2012
8:52 am

‘Unfrigginbelievable, huh LHU?’

I keep seeing it…and, for the life of me, cannot understand it…

JohnnyReb

April 25th, 2012
8:53 am

Quote of the Day

Apparently, I am suppose to be more upset over what Mitt Romney does with his money than about what Barrack Obama does with mine.

Steve

April 25th, 2012
8:53 am

Mark – how can we come back when we don’t have the public transportation or roads to handle that in the city? I’ve lived intown for 20 years and traffic is only getting worse, the water situation is worse, and cost of living here continues to rise.

Whatever

April 25th, 2012
8:53 am

Doggone,

I see what you are saying but the 10,000 rich also buy much more expensive things and more of them than the 1,000,000. So in the end they will pay a lot more tax based on their volume of purchasing.

Brosephus™

April 25th, 2012
8:53 am

I don’t think you can look at that data and shrug it off as a momentary blip. It’s also not the inevitable consequence of the larger national economic situation. This is a long-term problem, and it’s a metro Atlanta problem.

Sounds like the perfect interlude for the phrase, “No sh*t Sherlock!”

—————————-

dB @ 7:31

:lol:

—————————-

Guess this is partially explains why I’m unable to refi my house right now since I’m still way under water. Maybe I should do like others and quit paying so that I can refinance.

TBone

April 25th, 2012
8:56 am

Gee thank you master of the obvious with this uber-superficial analysis of housing values. With little or no effort expended to delve into the overriding causes of the housing collapse. What impact did the federal government play in monkeying with the markets? To espouse that “change is indeed necessary” is nothing more than progressive/liberal tripe. Screwing things in the market up and then riding in on the white horse to resolve problems caused by the same folks is insanity.

Jm

April 25th, 2012
8:58 am

You guys are trying to analyze the market (poorly)

Analyze Atlanta

JamVet

April 25th, 2012
8:58 am

“Georgia used to be attractive as a place with minimal government; getting harder to tell us from the nanny-state now.”

Too funny. Georgia’s neocons are setting up a nanny state.

Even the simplistic, sophist, always evidence-free talking points run into each other because they are so damn weak!

Washington and Atlanta were completely negligent for YEARS. And the men who ran those private Wall Street titans – Bear Stearns, Goldman Sachs, AIG, Lehman Brothers, Citigroup, BoA, among MANY others, went absolutely berserk with unapologetic greed and a lack of self-discipline that would shock a petulant 16 year old with dad’s credit card.

And the corporate scoundrels, banksters and legalized thieves who damn near destroyed this republic with their casino capitalism and “sustained orgy of excess and reckless behavior” get a free pass from the very brain-dead Republicans that they abused.

Amazing…

http://4closurefraud.org/wp-content/uploads/2010/04/wallstreet1-1024×518.jpg

Lord Help Us

April 25th, 2012
8:58 am

‘With little or no effort expended to delve into the overriding causes of the housing collapse’

Jay, on behalf of your readers, I apologize for the above…and the pygmies on New Guinea…

USinUK

April 25th, 2012
9:00 am

meh – basic laws of supply and demand … the building boom of the oughties is coming back to bite … “is it a green space??? BUILD A MCMANSION SUBDIVISION!!!”

JamVet

April 25th, 2012
9:01 am

What impact did the federal government play in monkeying with the markets…Screwing things in the market up and then riding in on the white horse to resolve problemscaused by the same folks is insanity.

TBone, you too demonstrate stunning, parroted ignorance.

Mary Elizabeth

April 25th, 2012
9:01 am

AMVET, 8:40 am

“To that point ME, getting these willfully ignorant neocons to actually learn the pertinent – and damning – facts about this topic is futile with a capital F. Not because they are stupid, but because they DON”T WANT to know the truth.”
=================================================

Unfortunately, AmVet, greed is still the dominant culture in America and in Georgia. Moreover, the close connection of our state legislators to the corporate magnates within ALEC, and other contacts of power/wealth on the money centered current American landscape, is keeping Georgia’s legislators from passing critical progressive legislation which would move our state forward for all citizens. This combination of deliberate use of our government to enhance political personal and private wealth, and for the benefit of increasing the CEOs wealth within some corporations, is hurting our state, overall. Power corrupts, but so does greed, and all of the populace are adversely effected because of its mindset. We must recognize the source of the problem before we can change it. Vote out of office and power many of our current legislative leaders, and our state may start to progress, again. Georgia has been in a financial regression, as well as an ideological regression, for far too long to have produced healthy and productive outcomes for the common good of all of its citizens.

Soothsayer

April 25th, 2012
9:02 am

Jay, I just don’t see what all the fuss is about. What we should be doing is listing all these foreclosed houses in China. Then, a group of 50 or 100 Chinese could get together and buy a house.

Heck, with as many people as they’ve got in China, we can make short work of all these unsold homes in no time flat.

I mean it’s only fair. They’ve got our jobs, they might just as well have our homes, too. It’s not too complicated. Why, I bet even Sinkhole can understand it!

St Simons - codewords are the new black

April 25th, 2012
9:02 am

I see the codeword for today is “blame the poors”, got it

what happened to “duh war on success”?
(I liked that one, esp after Little Nero w/a Cowboy Hat)

USinUK

April 25th, 2012
9:03 am

“Analyze Atlanta”

so … Atlanta … tell me about your childhood …

cloudodust

April 25th, 2012
9:03 am

While we’re on the subject of Housing, can we take a brief moment to consider what Senior Exemptions, aka Senior Welfare, has done to the tax base..? (JB, you ought to run some numbers on this and how it’s shifted the burden). The segment of society aged 62-75 that can qualitfy for these exemptions by shifting their finances for one qualifying tax year then go back to drawing their normal retirement incomes and get the exemption benefits for a length of time without having to requalify on a yearly basis…Housing isn’t killing them (unless they’re stupid beyond their years) but hey, thanks to the Georgia Legislature for providing Seniors with the opportunity to redistibute the tax obligation that’s killing the rest of us. Many of us thought of Granny bringing in 10,000k a year on SS and offering her assistance when we passed these exemptions but Granny isn’t the one getting the meaningful breaks… Okay…and now back to Housing and btw, I’m in a paid for house, am going to live here for another generation and am thankful for the blessing to be debt free (except for taxes and medical expenses)…

USinUK

April 25th, 2012
9:05 am

Tbone – “Screwing things in the market up and then riding in on the white horse to resolve problems caused by the same folks is insanity.”

puh_LEEZ

the mcmansion subdivisions – no to mention, the condo units that cropped up like mushrooms after a thunderstorm – had sweet fanny adams to do with government intervention …

THAT was due to market speculation and overbuilding.

fact, jack.

JohnnyReb

April 25th, 2012
9:05 am

Jay, I don’t know if you think you have an answer to the metro housing challenge or if you just want to blog about it. A day or so ago you stated we need a new “tool.” I don’t know what the conclusion, if any, was on that thread, but usually when a Liberal such as yourself starts talking about tools it means some kind of government mandated fix.

You and your followers will deny it, but the root of the current housing bust is CRA. No, it was not the only reason, but it laid the groundwork and greed did the rest. No better example of the failure than Atlanta where greedy developers coupled with government supported bad loans fueled a boom that never should have taken place; thus the bust.

I believe one of those “tools” you are looking for can be found no further than TSPLOST and the beltline which is more do-gooder politican social engineering where a tax for transportation improvements would be used on non-transportation. Yea, let’s vote for TSPLOST.

Atlanta

April 25th, 2012
9:10 am

This Yankee jerk lit me on fire, which wasn’t nice….

Lord Help Us

April 25th, 2012
9:10 am

‘Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining’

Sure, JR…sure…

Doggone/GA

April 25th, 2012
9:10 am

“So in the end they will pay a lot more tax based on their volume of purchasing”

It’s nice to think so, but it doesn’t work out that way. If 100 rich people buy a million dollar boat each, that’s 100 million into the economy. If 100 million middle class people buy a $100 boat that’s a ten billion dollars into the economy. Even though those middle class buyers spent a LOT less per person than the rich did.

JohnnyReb

April 25th, 2012
9:11 am

Parting shot, at least for a while.

Why will Obama lose in November? Look no further than Romney’s speech of last evening.

While Obama goes around blaming the rich, making promises that he can’t keep and will later blame on Republicans, Romney was full of optimisim painting a picuture of our future all like even if you are a Moonbat.

JamVet

April 25th, 2012
9:11 am

You and your followers will deny it, but the root of the current housing bust is CRA.

THIS is the unbelievable level of fierce ignorance out there.

And explains why the man cannot produce one single, solitary piece of compelling evidence by some respected authority to even corroborate this nonsense.

Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act — a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations.

As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley

http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

As I said earlier, futile with a capital F…

Joseph

April 25th, 2012
9:11 am

Finn McCool (Class Warfare === Stopping Rich People from TAKING MORE of OUR MONEY)

April 25th, 2012
9:12 am

You can’t blame the poor for the housing bubble. Do you really think enough poor people can get THAT MUCH credit to cause that much damage?

Nope, it was more the case of middle class people taking advantage of all those bank schemes and over-extending themselves.

barking frog

April 25th, 2012
9:13 am

With all the govt foreclosures why
is there not one
give a vet a house
program?

USinUK

April 25th, 2012
9:13 am

“You and your followers will deny it, but the root of the current housing bust is CRA. ”

WRONG

(the zombie lie that just … won’t … die)

at the market’s height, subprime lending was only 25% of the loans that were made …

additionally, the majority of those making those loans were NOT BANKS – therefore, didn’t fall under the rubric of the CRA

Poor Boy from Alabama

April 25th, 2012
9:13 am

JB,

You may be drawing too broad a set of conclusions from the S&P Case-Shiller Index.

First, the chart you provided shows the rate of change in home prices for various cities not actual prices. Home prices in Atlanta, for example, have been lower than those in Denver for a long time. What the chart really says is that Denver home prices didn’t decline as rapidly as Atlanta home prices.

Go to real estate sites such as ZIllow.com if you want to compare actual prices across cities:

http://www.zillow.com/local-info/

Here’s a summary based upon the cities you compared above:

Home price as of March 2012 / 5 year change in home prices (annualized)

Atlanta – $107,500 / -9.1%
Charlotte – $131,900 / -2.5%
Cleveland – $107,600 / -4.7%
Dallas – $121,500 / -2.8%
Denver – $205,900 / -2.0%

Many cities have experienced five year annualized price declines similar to those of Atlanta according to Zillow.

Here are a few:

Home price as of March 2012 / 5 year change in home prices (annualized)

Bakersfield, CA – $116,700 / -14.1%
Chicago, IL – $155,200 / -9.0%
Erie, PA – $114,400 / -14.1%
Fort Myers, FL – $129,600 / -13.0%
Las Vegas, NV – $111,600 / -17.5%
Medford, OR – $153,900 / -10.6%
Ogden, UT – $84,800 / -11.3%
Phoenix, AZ – $128,000 / -12.9%
Seattle, WA – $248,600 / -7.8%

I only listed a few of the cities that have experienced double digit annualized declines in home prices over the last five years.

There’s no doubt that the Atlanta housing market has issues, but so do a whole lot of other cities. I would be careful about trying to draw too fine a set of inferences from home prices.

Common Sense

April 25th, 2012
9:14 am

You need to analyze the rise in prices to analyze the fall…..

Not one comment in your blog about Atlanta area leading in fraudilent loans? And that pushed up prices much higher than they should have been in the first place?

You really do try to paint a one sided picture, don’t you?