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.
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
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447 comments Add your comment
Bruno
April 25th, 2012
11:29 am
Common Sense: 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?
25 Brownies for CS. As a side note, someone tried to enlist me in a fraudulent scheme to sell my commercial property in 2007. Would have made an extra $20K, but turned it down on principle.
USMC
April 25th, 2012
11:29 am
I don’t disagree with Comrade(term of affection) Bookman entirely; HOWEVER,
Lesson #1 in business: Buy Low and Sell High!
Bookman Bolsheviks (I am totally kidding) don’t cry that no one told you, but NOW is the time you want to BUY.
Housing prices are way down AND mortgage interest rates are at historic LOWS.
Today’s 30 yr fixed rates are as follows: 3.875% (5% down pmt) for conforming and 3.75% for FHA(3.5% down pmt). Fulton county will GIVE you up to $25,000 for closing costs and principal reduction if you qualify under the Neighborhood Stabilization Program, etc.
Mortgage lending has eased tremendously from the gridlock we experienced in 2010 & 2011.
As a local Real Estate Advisor, I am busier now than I have been in the last 24 months.
So, take advantage of the great opportunities staring you in the face.
Adam
April 25th, 2012
11:30 am
when Obama calls out Romney for being born with a “silver spoon in his mouth” isn’t he calling out his own kids as well?
First of all, he did not call out Romney for having a silver spoon in his mouth. Second, Romney’s dad did not grow up poor, contrary to Romney’s assertion. So – wrong all the way around on this one.
JamVet
April 25th, 2012
11:30 am
JKL2, after voting for GWB twice, Nathan Deal once and Saxby Chambiss twice, you guys wouldn’t be able to recognize a leader if one fell in your lap.
Bruno
April 25th, 2012
11:31 am
USinUK: I agree – I wish the lovely, colorful graph went back to 2000 … so that it could chart the meteoric rise, rather than just look at the fall
50 Brownie Points for USinUK. 20 for making a good point, 20 more for not toeing the Party Line, and 10 more just because she’s super cool.
Brosephus™
April 25th, 2012
11:32 am
I know you were making a joke, but try to stick with something you know instead af spewing gibberish.
JKL2
I happen to own a 327 V8 with a 4 Barrel Rochester carb mated to a 2-speed Powerglide transmission in a 1963 Chevy Impala 4 door Sedan. I do know a thing or two about automobiles, but it’s apparent you know absolutely nothing about humor. Obviously, you’re the only one who took that seriously, so maybe you need to look in the mirror and see where the real problem lies. In other words, “Lighten up Francis.”
Don't Forget
April 25th, 2012
11:33 am
USinUK
April 25th, 2012
11:06 am
Good catch! Got some pathological liars on this blog. Always check the facts.
Bruno
April 25th, 2012
11:34 am
EJ Moosa: The truth is that if class welfare had not been distributed, via 0 down loans, no doc verification, and other methods courtesy of Freddie Mac and Fannie Mae, who are backed with the full faith of the Federal printing presses, the situation would have been very different today. But the government was just trying to help, weren’t they? When you inflate the pool of buyers artificially, eventually it will rise to a peak and then collapse.
25 Moose points for telling it how it was, Moosa.
ME: After numerous attempts to repeal this act and millions of lobbying dollars showered on Congress, it was finally dismantled through former President Bill Clinton approval of the Gramm-Leach-Bliley Act (GLBA) or Financial Modernization Act of 1999. There has been much criticism and controversy surrounding its repeal and many believe it opened the door to financial destruction. In particular, its repeal has been connected as a primary contributory factor to the current economic disaster, because it broke down the financial barriers, which prior to its repeal, safeguarded our financial institutions.
Okay, ME. Plus 25 points. You’re only 75 in the hole now.
Oscar
April 25th, 2012
11:34 am
Would have made an extra $20K, but turned it down on principle.
_________
On principle and the wish to stay out of jail. Good move though. Lots of people wound up in jail. fro doing tha.
Redneck Convert (R--and proud of it)
April 25th, 2012
11:35 am
Well, there’s no question about it, when our great-great-great grandkids write about us in the history books, they’ll be laughing at us as victims of the biggest theft in US history. One day some guy on Wall Street thought of buying a rating agency’s approval for what was like a bunch of cut-to-size newspaper scrunched between a pair of $20 bills. Except in this case it was a couple good mortgages sandwiched around a whole bunch of bad ones. After awhile everybody was in on the act. They couldn’t issue enough mortgages. And nobody wanted to know if somebody could afford to buy a house. People that couldn’t spell mansion a few months before were living in one. Counties and cities bought the junk as a way to keep from raising taxes. Everybody was getting rich. And people like kayaker were pounding on things to get enough houses ready to sell.
And then one day somebody broke the rules and said, “Hey, you know what? This stuff is worthless.” Then people couldn’t borrow nothing and people that just kept refinancing their houses found theirselfs living in a shell that wasn’t worth half of what they borrowed for it. Millions of people got laid off. Housing just collapsed. Banks were stuck with all kind of bad debt and none of them were lending anything. People’s retirement savings were cut in half.
And how many went to jail for this theft? Zero. Nobody. Zilch. Everybody was in on the thievery and nobody wanted to admit being a thief.
That pretty much explains why we’re in the mess we’re in today. And even people that stayed away from the bad deal are having to pay the price for it. We’ll stick a kid in prison for having more than a ounce of pot. But we won’t even bring charges against the people that stole trillions of bucks.
Joseph
April 25th, 2012
11:36 am
Even libs would have to admit Romney looked really good last night…..
http://nation.foxnews.com/politics/2012/04/25/romneys-killer-speech
Brosephus™
April 25th, 2012
11:36 am
But Bro just paid a guy $500 to attach a hemi to his engine. Now he is going to be upset.
Oscar
Nah. The cost of tuning the hemi engines are not worth the investment from what I’ve heard from owners. I had thought about buying the SRT8 Challenger, but I’d rather keep my Impala and lower maintenance fees.
However, I did think about getting a guy to attach a hemi to my daughter’s tricycle.
Bruno
April 25th, 2012
11:38 am
Moderate Line: Jay has implied in previous post that housing prices are plumenting because people perfer places which are no heavily dependent on automobile. However, the lastest statistics just do not support such a conclusion. In fact Atlanta metro area is still the 7th fastest growing metor area. Plus the metro areas which are in the top 10 are not exactly big on high density housing. Only two cities in the top 10 for transit systems are in the top 10 for growth.
Running out of Brownie Points to give out, and a new thread has appeared, but hip-hip-hooray for telling the whole truth, Moderate Line. So sad that we’re usually treated to only half the story at the JB Blog. Good work.
Adam
April 25th, 2012
11:38 am
GS: I agree with all of your statements about education. I would add that I think teachers should be allowed to fail the students, on the merits of the course material, without fear of parents or outside pressure to do the opposite. I also disagree with standardized testing on anything but math and science – things that can actually be quantified legitimately.
I do, however, think money can help the situation. While you cannot motivate students just by throwing money at the problem, you CAN motivate students by hiring motivated teachers. And you can make teaching more of an incentive by paying them better and not demonizing them wholesale. But the bottom line is teachers need more freedom and pay, and money needs to be provided for an increase in teachers and their pay. It also needs to be provided to allow for school supplies and such if students and their parents cannot afford those materials.
Brosephus™
April 25th, 2012
11:38 am
Dang it.. copied wrong smilie..
Oscar, your smiley was supposed to be a true smilie.
They BOTH suck
April 25th, 2012
11:41 am
Joseph
“Even libs would have to admit Romney looked really good last night…..
If you are a Log Cabin Republican that is all fine and good, however that doesn’t mean all “libs” fit that category of sexual preference………. Do your thing man, but don’t project on to others what you do in your bedroom
Bruno
April 25th, 2012
11:43 am
On principle and the wish to stay out of jail. Good move though. Lots of people wound up in jail. fro doing tha.
Oscar–As it turns out, staying out of jail is one of my main principles in life.
See you on the next thread.
Matti
April 25th, 2012
11:43 am
I almost had a heart attack during my refi last year. Literally, I was so angry at those lying, deceitful *bleep* faced bankers, and their little *bleep* *bleep* appraisers, that they had to have a new one every couple of weeks come out (at my expense) to drop the value again, and their constant phone calls, each one negating something they’d told me the week before. Buncha lying scumbag sleazoid *bleep*ing *bleeps*! (breathe… breathe….)
HINT: being responsible, following the rules, living within your means, and paying your bills on time, doesn’t get you jack shizz is this corporate-owned country. Maybe it did once, but not anymore. Buncha *bleeping* (breathe.. breathe… )
Okay, I’m done here.
Kamchak ~ Thug from the Steppes
April 25th, 2012
11:46 am
You’re holding back, Matti. Tell us how you really feel.
Joseph
April 25th, 2012
11:52 am
I sure hope dems keep Debbie Downer around… This woman is certainly going to help the GOP easily win the Whitehouse and the Presidency in Nov…. Thanks Deb….
http://www.youtube.com/watch?v=4OfObd2qvLg&feature=youtu.be
Joseph
April 25th, 2012
11:54 am
Adam:
I suppose you must have grown up along side the Romneys… Wow you must have much insight….
They BOTH suck
April 25th, 2012
12:01 pm
“This woman is certainly going to help the GOP easily win the Whitehouse and the Presidency in Nov…”
Thanks for the insight, didn’t know that winning the WH and the Presidency was two separate elections………
Learn something new every day ……… if you want too
zeke
April 25th, 2012
12:03 pm
thanks gov perdue and repubs for repealing predatory lending in GA…..
last nite on pbs frontline they showed the fiscal collapse and had a few seconds on it about gov barnes trying to fight predatory lending….minute barnes defeated the first order of business to repeal predatory lending……thank you greedy repubs and coward dems!
unfortunately, with larger minority population and their desire to share in american dream, many agents, brokers, bankers took advantage of them. not limited to minorities but my bet is they contributed to more foreclosures per capita and thus ATL a leader.
also minority unemployment higher…..it’s a shame but the housing euphoria pushed by clinton and bush was ill fated.
don’t think we will ever recover given this state’s political tendancies….
Jm
April 25th, 2012
12:08 pm
Atl is so diversified no one has a reason to go there
A diversified economy can be a liability
No “clustering” effect
Trolls Bane
April 25th, 2012
12:13 pm
Jay, I think you have missed a very big part of the picture, you come close to getting it but not quite all the way.
The local economy has been focused on residential development for a long time, and the zoning practices and ordinances are focused on residential development and related retail, and largely exclude any sort of manufacturing or industry. Take for example Newton County, the county is was attempting to turn into a Republican bedroom community, and now there are LOTS of empty lots and un-developed subdivisions. The local govenment is dominated by real estate developers. They have made it very very difficult to start a business, or have any business other than retail. Now that the bottom has dropped out of the real estate game, there are no manufacturing or similar businesses to provide long-term / stable employment.
Watkins
April 25th, 2012
12:28 pm
We’re witnessing the second ‘burning of Atlanta.” While foreclosures continue in metro area and jobs vanish and house prices plummet, we read of the 2012 accomplishments of the GA Gen’l Assmbly: (not all these bills passed mind you, but the 40 days didn’t get spent focusing on the real needs of Georgia) bill to legalize living on boats; to stop tastings in liquor stores; ban dead-head logging; revoke teacher bonuses; ban assisted suicide; fund corporately operated charter schools with state money (while cutting funding for traditional schools); let charter school students play ball on traditional school teams (who’s responsible?); anti abortion bills; online education bills and all the while GBP estimates that lobbyists spent over 10,000 per day at the Capitol.
Metro was treated badly, but the farmers are still taking it on the chin, too. Produce rots in the field while the workers flee the inhospitable environment.
My Party has ALL the answers. Your party is full of poopyheads! (formerly That Black Guy)
April 25th, 2012
12:41 pm
Adam
April 25th, 2012
10:03 am
Joseph bids December 9, 2011. Anyone got a closer time to now?
________________________________________________________________________
Make a hole, make it WIDE.
Goalposts coming through.
Planned Ahead
April 25th, 2012
1:10 pm
They only plummet if you sell them. If you have paid them off early and have no debt then you are sitting pretty. I am just remodeling so if and when I choose to sell I will get more money and a quicker sale. Always pay the bank back as quickly as possible instead of buying, buying and buying more “things”. Drive your cars until they can drive anymore, then pay cash for the next one, a used one since they just depreciate the minute you drive them off the lot. Fiscal responsibility is simple people, slow and steady always wins the race.
Oblama
April 25th, 2012
1:16 pm
Jay – The crime rate on the GT campus is alarming. Who would want to live in that environment? I have a son at GT and his car has been broken in to a robbed twice in the last year at his apartment. He lives basically on the GT campus in a high rise. I make sure he is locked, loaded and knows how to use it. Whoever messes with my nerd is going to be in for a big surprise. I have lived in Atlanta twice and that was to long. South Georgia is the place to be. Close to the shore and away from gangs.
JKL2
April 25th, 2012
1:32 pm
jamvet- JKL2, after voting for GWB twice, Nathan Deal once and Saxby Chambiss twice, you guys wouldn’t be able to recognize a leader if one fell in your lap
Yes, I would, because I’ve worked with several great ones. Bush was a good leader. Made some bad decisions trying to appease the Demwits and got stabbed in the back for trying. Never voted for Deal or Chambliss so I’ll take you’re word for it.
I have voted against obama three times though. The only thing he knows about leadership is how to pronounce it when it comes up on the teleprompter.
zeke
April 25th, 2012
1:38 pm
i find it amazing that given the loss that occurred in 2008 (11trillion but likely more), reduced or flat line salaries for working joes, home equities crushed, yet well to do have enjoyed major rebound but these job creators have not created jobs in significant numbers. now the right wants to decimate the remaining middle class, unregulate wall st for more plunder, reward rich with disproportionate tax breaks, give corporations more money to funnel into elections…..and this is going to make america better. the right likes to harken to the founding fathers. wonder if they would approve the income/wealth disparity many earnestly tried to flee from.
“Experience demands that man is the only animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor.”
– Thomas Jefferson
Oblama
April 25th, 2012
1:38 pm
Isn’t this Oblama economy recovering? AJC keeps saying there is a LEAP in the jobs reports – if .001 % can be a leap. My dead grandma can leap further than that. The sooner Oblama is OUT the sooner the real recovery will begin – if it’s not already to late. I’m no fan of and didn’t vote for BUSH II but blaming him for everything is a joke. When he came in to office history shows that we were headed for a recession brought on during the Clinton administration. Then 911 happened. Guess you Dem conspiracy theorists blame Bush for that too. Just as you blamed him for a natural disaster called Katrina. Bush supposedly caused the “radical muzlems” to bomb the Twin Towers and the hurricane to hit New Orleans. We had a serious drought the last two years Bush was in office. Blame him for that too. Using that reasoning then Oblama is responsible for everything that has happened during his term in office. Time to move Oblama out. There was a poll on Yahoo showing the young voters are no longer buying what Oblama is selling. The “Reality Show” President’s popularity has peaked and is falling. Time for CHANGE. This election is about the economy, jobs and reducing the alarming Fed debt. It’s not about smoke and mirrors B.S. of the Dems. NOT about class warfare/ age warfare/ sex warfare/ victim warfare/ race warfare…. no matter how hard the Dems spread the B.S.
JKL2
April 25th, 2012
1:39 pm
brosephus- I happen to own a 327 V8 with a 4 Barrel Rochester carb mated to a 2-speed Powerglide transmission in a 1963 Chevy Impala 4 door Sedan
Sweet! My first car was a 65 Lemans convertible with a 326/powerglide. It had a one-throated two barrel. For fun I had a 71 Nova SS. Sold them both when I went to college. Guess I should have waited for a president who wants to trade student loan forgiveness for votes…
mike 'hussein' smith
April 25th, 2012
1:40 pm
Two reasons folks may be souring on the “metro” counties that are farthest from the city of Atlanta: crappy highways and higher gasoline prices.
Oblama
April 25th, 2012
1:42 pm
eke – Man devours his own kind. Uh – only cannibals. There are many animals that devour their young. For example, lions, tigers, gators, crocs, Dems, etc. etc. etc.
Oblama
April 25th, 2012
1:46 pm
OblamaNation = blame everyone but yourself for whatever goes wrong and never admit you were equally responsible for this Fed debt and economic disaster. Both parties are to blame and if you kept voting Congress back in office to continue their fraud you are likewise responsible. Term Limits – Perot was right – he was honest – he was wise – he didn’t have a chance.
Oblama
April 25th, 2012
1:49 pm
Gone today – here tomorrow.
Kamchak ~ Thug from the Steppes
April 25th, 2012
1:52 pm
“I’m just a hunk, a hunk of burning love
Just a hunk, a hunk of burning love”
– Thomas Jefferson
zeke
April 25th, 2012
1:57 pm
oblama, take it up with jefferson on the cannibal stuff, i think the guy was just trying to point out what pricks some human beings are. i agree with you on both parties at fault. just think there is a sliver of hope for dems or eisenhower type repubs…..ronnie blew it with this trickle down stuff and ss should have been made actuarily sound day one.
Adam
April 25th, 2012
2:22 pm
Make a hole, make it WIDE.
Goalposts coming through.
http://blogs.ajc.com/jay-bookman-blog/2012/04/25/metro-atlanta-housing-prices-plummet/?cp=4#comment-935368
Also:
http://blogs.ajc.com/jay-bookman-blog/2012/04/25/metro-atlanta-housing-prices-plummet/?cp=7#comment-935495
No goal posts involved, sir.
Boris Badnoff
April 25th, 2012
2:49 pm
Some cynics would say the reason crime is down in metropolitan Atlanta is when the victims left the criminals left. It’s like saying shark bites in Lake Lanier are down. I have noticed changes. Used to there were literally hundreds of prostitutes working midtown. Nowadays you rarely see them and the ones that are there are beneath homely. Did they all go to the internet or Columbia? Currently my house is worth more than my car. When those two flip flop and I live in my car I will have upgraded my abode. If it was fair to call the tents people lived in back in the 1930s Hooverville, would it be fair to call the new living quarters Messiahville? No, of course, not. Dubyaville.
zeke
April 25th, 2012
3:47 pm
reading some of the posts, this ragar guy does not know squat. had wall st not abused the derivative market beyond anyone’s wildest dreams we might not have been in this mess. thank phil gramm, clinton and rubin and others. the cra was abused but the derivative market took it exponential.
aCitizen
April 25th, 2012
5:47 pm
Back in the 1970s, there was a severe housing bubble. I seem to recall that there was somebody who decided that in order to put that right, then landlords would be allowed to charge up to 1/3 income for their tenants, and housing loans could be ALLOWED for UP TO 1/3 income. Was it someone in the FHA? Well, the end of it was that all landlords decided that all tenants should pay 1/3 income, and all buyers were pointed to houses that required loans at 1/3 income. Not a no-exception thing, but instead of 1/3 being the limit, it became the general practice. Kind of like since the speed limit is 65 then everybody must go 65. Here the thing. It used to be in the 1950s and 1960s that the AVERAGE cost of a house should be no more than 2 years AVERAGE salary!!!
It is my opinion that until this returns to normal — yes like it was 50 years ago — the housing problem will continue. People cannot afford housing, and so the demand will continue to go down until the prices are where people can afford housing. Housing should not be 1/3 of income. It should be 2 years salary. The average salary in this country is about $40,000. So the average cost of a house — AVERAGE I SAY — should be about $80,000. There should be much housing which is far less than $80,000.
All you who are up in arms about it, you are wrong.
All these people suffering is because of the greed that led to the situation of horribly inflated housing in 2006. The market must continue to adjust. And I’m praying for all those who suffering from this, but I’m also praying for the average cost of housing to continue down until the homeless and the poor can finally afford to live.
DawgDad
April 25th, 2012
6:36 pm
“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.”
Right, wrong, wrong. Jay, HOW can you write this stuff? I moved down here in the boom, traffic was worse, water was soon restricted, and infrastructure (like Atlanta sewers) was a joke. People were flooding into the area.
Try writing about what is REALLY going on. Since I’ve been here Atlanta has lost numerous businesses including major corporate HQs and Regional HQs to closures, consolidations, mismanagement, etc. Lucent, Wachovia, GM plant, numerous others. I saw this happen over decades in St. Louis, the same pattern is playing out here. The massive local housing bubble on top of the national housing bubble had a compounding bursting effect.
Somebody told me recently Alpharetta is one of the largest concentrations of corporate data centers in the world. Unfortunately, those don’t employ a lot of people. The people they do employ are likely happy to be here, riding out the wave like I am. Atlanta is still a great place to live, as long as you don’t have kids in APS and you aren’t under water on your home loan. There are some real bargains out there for home buyers.
DawgDad
April 25th, 2012
6:40 pm
“I’m also praying for the average cost of housing to continue down until the homeless and the poor can finally afford to live.”
You’re PRAYING for housing to essentially become worthless? Only a socialist could have such a self-destructive mindset. Why not focus on RAISING UP the homeless and poor to afford the available housing???
Kevin Kennedy
April 26th, 2012
9:19 am
Hi, Jay. Could you please email me or give a link to the original article, “Metro-Atlanta Housing Prices Plummet? Thanks.
independent thinker
April 26th, 2012
4:53 pm
You can thank the realtors and mega builders as well as corrupt county officials for the overbuilding that occurred in Atlanta over the last twenty years. When you got way too much supply and not enough demand due to unemployment , migration of people out of Atlanta and foreclosures, prices drop drmatically. Add to that the 99% loans that he realtors , mortgage brokers and lenders gave away like candy and you got a recipe for a real estate disaster. In many neighborhoods the only comparables are foreclosure bargains, REO fire sales and short sales. Those neighborhoods then become suburban slums and values plummet even more. Getting quality owners back in the devastated neighborhoods is key.