In Realtor.com's November ranking of 152 markets, Atlanta ranked 150th in terms of year-over-year list prices, with 7.65 percent decline. The latest S&P/Case-Shiller Home Price Indices report, home values in Atlanta fell 5 percent from September to October and 11.7 percent from October 2010 to October 2011, leading the nation in Case-Shiller's monthly report.
The foreclosure wave began last spring, accompanied by a drop in home sales. High unemployment, economic fears and tight lending standards for buyers were blamed. Hopes were high that the crisis would pass quickly.
"The number of sales has increased over the last three months. We have every reason to believe the numbers are going to rise in the next couple of months," said Mitch Kaminer, president-elect of the Atlanta Board of Realtors told Inman News last May. "The market is stable. We're waiting for things to start coming back up. Absorption of foreclosures and short sales will start that ball up."
Instead, the situation has worsened. Prices fell further and by September were down 9'8 percent year over year. REOs reached 42.2 percent of all home sales by the end of the year..
When the Case-Shiller numbers hit the media December 27, it made big news. In a subsequent commentary on Housing Views, the Standard and Poor's blog, David Stiff, chief economist and vice president at Fiserv, tried to sort things out.
"Taking a closer look at Fiserv's real estate transaction data for Atlanta, I determined that there was a significant increase in the sales volume of bank-owned properties in August, September and October in the Atlanta metro area.
"Changes in the volume of bank-owned sales can cause changes in average prices that will be reflected in the S&P/Case-Shiller Home Price Indexes. And, if bank-owned sales are concentrated within one price segment (e.g., low-priced homes), shifts in bank-owned sales volumes can cause the S&P/Case-Shiller indexes to shift relative to the aggregate indexes. During the housing bubble collapse, in many metro area markets, the proportions of bank-owned sales vs. all sales have fluctuated substantially over time (but not consistently across different metro areas). Bank-owned sales volumes also tend to drop less in winter months (than regular sales volumes), so their proportion of total sales often increases from October through March, leading to larger seasonal swings in the S&P/Case-Shiller Home Price Indices in markets with large numbers of foreclosed properties.
"Atlanta non-REO sales volumes also increased in August and September, but on a smaller percentage basis than REO sales. Consequently, the proportion of REO sales increased. Changes in the REO proportion of sales have been causing fluctuations in average prices in many markets, especially those with large foreclosure inventories," he said.
With the new year, Atlanta hopes its trials are over. Inventory plunged to historic lows last year and is now down 28 percent year-to-year, but prices are still falling at last report.
Exploding whale video goes viral on Internet
Sign language interpreter at Mandela service called out as fake on Twitter