Foreclosures, Foreclosures! They played a huge part in bringing down the housing market and they’ve seemingly been hanging like dark storm clouds over the market ever since. And remember that ‘shadow inventory’? Millions of homes were going to drop out of the sky and flood the market at anytime. But the truth is that we’ve been working through these foreclosures and getting them off the market for some time. Now a new report from RealtyTrac shows that foreclosures over the past year have dropped 35% and now are at levels not seen since December 2006. So what happened? One, the economy has been improving and two, banks’ tighter lending standards mean that almost NO loans since 2009 have been going into default. It’s the typical market business cycle.
And what does this mean for you? If you own a house and you’ve been thinking of selling fewer foreclosures mean prices are ticking higher. If you’re a buyer it means you’ve probably missed out on the lowest (and riskiest) prices but you can still get a bargain and there is still more upside in prices to come to the market. Lastly, it’s important to note that here in Georgia we still have one of the highest rates of foreclosure so we’re not out of the woods yet. So call us or call your agent today and get some good advice on how you should proceed.
The number of foreclosures in Georgia and Atlanta fell again in April versus the same time last year according to new numbers from RaeltyTrac. It’s a trend we’ve been seeing for awhile here at the Homes in Atlanta blog. Overall in Georgia foreclosures were down a whopping 42% from a year ago and 5% down just from March! These are dramatic changes which are rapidly changing the real estate market here. There are several reasons for the drop. The economy is improving and people that have gotten a loan since 2008 have an incredibly low delinquency rate. Also, the improving economy means fewer people getting behind on their payments. And last, banks are doing a better job of working with sellers on short sales. Shadow inventory, shmadow inventory. There simply is no glut of houses out there waiting to come onto the market. And there are fewer and fewer homes headed for foreclosure. If you’re thinking of buying you need to move your timeline up and if you’re thinking of selling you need to be calling us today.
Foreclosure notices in the Atlanta metro area fell to their lowest level in four years this month, which included a 30% drop from July to August. Some of the reason for the drop is a new law which tightens the documentation requirements for lenders that are processing the foreclosure. That may be a reason but it’s not the only one. As we’ve told you before mortgages made since 2008 have only been given to those with almost perfect credit and decent assets. Those home buyers aren’t going into foreclosure. It’s almost exclusively those that had mortgage prior to 2008 and we’re working through those. This doesn’t mean we won’t continue to see foreclosures and they won’t continue to affect the market. It’s just that we’re working through them and the market has adjusted. And right now we don’t have nearly enough foreclosures available. More will hit the market but they won’t affect prices as much as they have in the recent past. Keep your eyes open. Real estate is coming back. It won’t be a steep climb but a slow and steady improvement and that’s what we need. If you’re considering buying or selling a home it’s time to contact an experienced Realtor and get some good advice as to what you should do.
We continue to see improvement in the Atlanta housing market and here’s another sign. Metro Atlanta foreclosures fell over 6% year over year in July (that’s July 2012 vs July 2011) according to this study from RealtyTrac. They also fell over 9% from June to July. This is no surprise to us because we’re seeing a shortage of homes on the market. It’s also to be expected. We had a tremendous recession with a lot of job losses which is usually the cause of foreclosure. But since 2008 banks have been really stingy with loans only giving the very, very qualified mortgages. Those people aren’t going into foreclosure. Many others have gone through tough times as well but if they’ve hung on this long they’ve probably weathered the worst of it. It doesn’t mean the foreclosures are gone. It just means we’re slowly working through them and it looks like the worst may be over. Let’s hope so! If you’d like to know more about the market and what your strategy should be give us a call.
The number of homes that were foreclosed on and the number of homes approaching foreclosure fell significantly last year according to this article from Real Estate Economy Watch and statistics from Corelogic. So great news, right ? well, let’s just wait. The numbers over the next four months will tell us more. Are foreclosures down due to the robo-signing mess or are we really working though the inventory? We know that in Atlanta the number of homes for sale dropped dramatically last year until a bump in the fourth quarter. Let’s see where that ‘bump’ goes. Is it an omen of things to come? The first two quarters of 2012 will tell the tale.
Wow, foreclosures decreased 34% in 2011 from 2010 according to a new report by RealtyTrac. It’s the fewest number of foreclosures since 2007. Now this doesn’t just mean that fewer owners are in distress. Some of the decrease is due to banks delaying foreclosure due to problems with paperwork and the robo-signing mess. There are signs that foreclosure activity is up again. we’ve seen this in our own Atlanta market as 4th quarter foreclosures took a big jump. So what does this mean for the future? we’re still working through the foreclosure mess and we’ll continue to see them as a big segment of the market. But we’re also seeing light at the end of the tunnel. Paperwork can’t account for all of the decrease and lenders are reporting that loans made in the last two years (with very strict standards) aren’t going delinquent. In fact new loans are experiencing record low numbers of delinquencies. So the news is mixed. Prices remain low and aren’t increasing yet but the foreclosure picture gets clearer each month. I got these numbers from RealtyTrac and if you’d like to check out the original article (with lots of cool graphs!) you can find it here.
A new report from AJC.com shows here in Atlanta our housing recovery will take some time. We’re still working through all the foreclosures and short sales. These make up about 40% of current sales. But it’s a strange market, indeed. Currently there are only about 38,000 homes on the market in Atlanta. This is a huge reduction. Ordinarily this lack of supply would mean a seller’s market but there are fewer buyers now. As a comparison, in 2005 having 54,000 homes listed represented equilibrium between buyers and sellers. Also, the quality of homes currently available are very hit or miss. There are a large percentage of homes that aren’t very good buys because they are damaged or need work. There are also many homes that are simply overpriced. This leaves only a small percentage of good homes at good prices. Buyers are surprised to find the selection so difficult. But there are good signs. Barclays recently had a report that showed Atlanta real estate to be a good buy for now and the future, rating Atlanta and Phoenix the top two markets. So if you’re thinking of buying what do you do? First find a good realtor that knows the areas you like. This is very important. Second, educate yourself. Learn the values. Just because the economy is down doesn’t mean you can offer 25% below the asking price. Sometimes the house is already priced right and you may miss out on a good deal. Be prepared to wade through some crappy homes before finding the one you want. And get a good realtor and a good lender! You need professional help in this crazy market.
This article from MSNBC really illustrates well the difficulties dealing with banks on loan modifications. I’ve helped clients with short sales and this story sounds all too familiar. Banks asking for documents, then asking for the same documents, then dragging their feet for so long that you now have to send them updated documents because the ones they’ve had for more than 60 days are too old ! Meanwhile the seller may be unable to make his payments and is worrying if he’s going to be foreclosed on while he’s waiting on answers from the bank to approve his short sale. It’ll drive you to drink ! You can read the full story of one couple’s nightmare here.