Atlanta Market - Looking Back So We Can Look Ahead - 2007-2009 Sold Prices
I've put together the same information two different ways in the charts below. To me, they show some interesting trends. While they don't give a complete picture, they do show how far we have fallen and the three year history begins to be enough to give us a nice perspective.
Inventories dropped every month in 2009 and the market looks to have stabilized somewhat during the second have of 2009 (see the first chart and compare the second half of 2008 to the same time in 2009. Prices did not continue to fall). There were less than 45,000 homes on the market at the end of 2009. At it's worst in August 2007, there were 72,000 homes. The last time the end-of-month inventory for all single family was below December 2009 was December 2005 and that is the best news in this report! Surely, the tax credit played some influence on helping to increase demand and lower supply. With the extension, we may well see a continued reduction in inventory but we will also see a reduction in demand.
Let's call the post-tax-credit demand level the "new normal". When we get to the "new normal" demand level, will inventory levels be lowered sufficiently so that prices can fully stabilize? I don't think it's possible to answer that question fully and since it's an election year it's even possible to see another extension of the tax credit. If I had to pace a wager on it I would say no because the timing of the expiration is ill-conceived. It runs out at the end of the busiest month (June), but, July and August are traditionally strong months and I don't think that we will see the traditionally strong sales volume in July and August because many of those sales will be compressed into May and June. That could leave us with lingering summer inventory into the fall and winter that will carry over to 2011.
Foreclosure Fears and Pricing - Forget it
Let's put this to bed. Banks are not stupid. There will NEVER be a flood of foreclosures. That would devastate the value of these bank owned assets and could destroy the banks. It's just not going to happen. Okay?
A better question remains as it has for the last 2 or 3 years. Is it safe to buy a house now? For that answer, you really will need to contact me or your own trusted real estate professional who is proficient in real estate market statistics because you will need to be more specific. For some, we are at or have passed the bottom, for others it's a long way off still.