Market is on the Move
Thursday, October 16th, 2008Home values may be falling nationally, but they are rising or at least holding steady in many parts of Atlanta, two separate housing price indexes show.
Atlanta’s home values have inched up slightly since April, according to the S&P/Case-Schiller report, which tracks housing values in 20 metropolitan markets, including Atlanta.
And prices are up 0.2 percent over last year in Atlanta, according to the housing price index report by the Office of Federal Housing Enterprise Oversight.
“There’s not a correction, because there is nothing to correct,” said Jeff Humphreys, director of economic forecasting at The University of Georgia’s Terry College of Business.
Atlanta real estate agents say prices are holding steady especially in well-established Atlanta neighborhoods such as Buckhead, Peachtree Battle, Garden Hills, Druid Hills, East Cobb, Virginia-Highland, Morningside, Dunwoody and Sandy Springs.
Home values are decreasing in outlying counties that saw lots of new home construction and in areas where there was a lot of mortgage fraud, Humphreys said.
In the outlying counties with an oversupply of new homes, builders are likely selling at deep discounts that compete with existing home stock, he said, driving down values. Likewise, homes in foreclosure as a result of mortgage fraud are undercutting the values of neighboring homes.
Homes in established neighborhoods, inside the Perimeter, with short commutes are holding value, Humphreys said.
Georgia is not experiencing as much of the housing wealth destruction as other markets, such as Florida or California, he said. In those areas, prices are declining after a period in which prices rose as much as 22 percent a year. According to the most recent Case-Schiller report, home values are down 19.5 percent compared with last year. Las Vegas remains the weakest market, reporting an annual decline of 29.9 percent, followed by Phoenix, down 29.3 percent, and Miami, down 28.2 percent.
Atlanta, Dallas, Minneapolis and Tampa have shown improvements in their home values, the report said.
Since April, Atlanta’s home values have inched up, the report shows, but year over year, the Case-Schiller report indicates Atlanta’s home values have decreased 8.2 percent.
Humphrey’s believes the Case-Schiller database is too narrow and instead uses the report by the Office of Federal Housing Enterprise Oversight, which shows Atlanta house values rose 0.2 percent in the past year.
Those Atlantans with vacation or investment homes in Florida are seeing some housing wealth destruction “but not in the house they are living in,” Humphreys said.
The common thread for homes that seem to be holding their value is their location in older, established neighborhoods, real estate agents say.