Foreclosure notices have fallen to their lowest levels in eight years, buoying the housing market across metro Atlanta.
As fewer foreclosed homes sell for dirt-cheap prices, average sales prices rise. That encourages more people to put their own homes on the market.
Because more people are putting their homes on the market, low inventory, which has been pushing prices even higher for months, has started to ease. It’s all coming together to help the region’s housing market move closer to normal.
Foreclosure notices for November fell to the lowest level since the end of 2005, according to the Kennesaw firm Equity Depot, which compiles the data. The 2,928 notices were down 49 percent from November 2012, and 25 percent from October. The latest numbers continue a trend that began two years ago.
“I expect it will stay down for the next year or so,” said Barry Bramlett, president and CEO of Equity Depot. “We’re through the crisis situation into more normal patterns.”
Bramlett said the law firms he works with to collect information on pending foreclosures have given no indication that they expect another wave of foreclosures, as some experts have speculated. While the numbers may rise slightly because of longer reporting periods, or after the holidays, he said the banks have largely cleared out their problem properties.
“They have acted on those they needed to act on,” he said. “They (law firms) don’t seem to have any word about some looming bulk out there.”
Through the past several years, there was a “swell” of homes that were selling for $100,000 or less, said John Hunt, a senior analyst with the real estate analysis firm Smart Numbers. They were primarily foreclosures. As they dry up, the average sales price has risen.
Hunt also thinks there is no wave of foreclosures yet to come. By spring, he said, it will be obvious whether the foreclosure crisis is truly over.
The improvements are a “very, very, very good thing,” he said.
“Mainly, folks will start to feel better,” he said. “It’s huge as far as consumer spending, consumer confidence.”
Atlanta has experienced double-digit increases in home prices for the past nine months, according to the widely watched S&P Case-Shiller Home Price Index. In August, the last month for which figures are available, home prices were up 18.4 percent over August a year ago.
Those increases have been moderating since April, when prices were up 20.8 percent year-over-year.
It all signifies a strong local housing market, said Nancy See, president of the Atlanta Board of Realtors.
“I think we’re in a growth mode,” she said. “All signs are that the market has picked up.”
See was cautious about the future, and said she does not know what will happen with institutional investors, who have been buying foreclosed properties by the thousands to rent them out. If they leave the market, price increases may moderate more quickly.
Though See said she can’t say with confidence that the crisis is entirely past, she doesn’t think any forthcoming foreclosures will have the same impact on the region.
“The foreclosure crisis is pretty much behind us,” she said. “I don’t really see it as being a major problem in the near future.”
WHY IT MATTERS
Foreclosures can hurt home values, which are important even to people who aren’t likely to sell or buy anytime soon. Home values contribute to the so-called “wealth effect” that helps drive the broader economy by making people more confident about purchases of all types.
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Metro Atlanta foreclosure notices for November
2004…..3,512…..up 18.8 percent
2005…..3,943…..up 12.8 percent
2006…..3,839…..down 2.6 percent
2007…..5,244…..up 36.6 percent
2008…..6,726…..up 28.3 percent
2009…..9,247…..up 37.5 percent
2010…..13,834…..up 49.6 percent
2011…..10,654…..down 23 percent
2012…..5,754…..down 46 percent
2013…..2,928…..down 49.1 percent
Source: Equity Depot