BTB Exclusive - The state of Atlanta's housing market

Bobby L. Hickman

February 28, 2008

Atlanta's housing market slowdown will probably continue through the first half of 2008 before bottoming out this summer, with recovering begins in 2009.

That was the consensus of several experts on a Greater Atlanta Home Builders Association (GAHBA) panel today who discussed the state of Atlanta's housing market.

Dr. Roger Tutterow, professor of economics at Merger University, said that at this time last year, he expected the slump that began in 2006 to bottom out by the end of 2007. However, last year's sub-prime mortgage crisis extended the market problems for another quarter of two. "Now I believe we'll hit bottom by the summer of 2008 and stay there for the rest of the year. It will probably be into 2009 before we see housing activity levels return to normal."

Tutterow noted that the sales pace for new and existing homes were down last year between 30% to 50% in various Atlanta sub-markets.

Eugene James, the Atlanta director of MetroStudy, which track new homes in 22 counties in the area, said housing starts dropped by 43% from 2006 to 2007, with home closings down around 30%. He said housing starts south of I-20 are at the lowest levels since his company began tracking the Atlanta market 11 years ago.

Dan Forsman, president and CEO of Georgia Prudential Realty, cited similar numbers for the resale market. He said the number of total single family units sold from 2006 to 2007 was down 16.2%. "Since 1996, there has never been a year-to-year drop in resales," he said. December 2007 alone saw a 37% decrease in sales from the previous December, he added. Condo sales also dropped 12.2% for the same period. However, the average sales price rose from $250,870 in 2006 to $256,400 last year, with sub-prime mortgage problems substantially reducing the sales among lower-priced homes during the second half of 2007.

Forsman also noted there were also 127,000 expired or withdrawn for-sale listings last year, a 29% increase over 2006. "Resellers were demoralized: they were unable to sell, so they pulled their homes off the market." He also predicted Atlanta will see fewer realtors in the future. The number climbed from 31,000 in 2006 to a peak of 42,000 during 2007 and already declined to 38,000 realtors.

Overall, the group agreed that while these factors are not good for the housing industry, this is a great time to be a buyer. Plentiful inventory, lower mortgage rates and stable prices are creating favorable circumstances for consumers. Steve Palmer, president of the Greater Atlanta Home Builders Association and CFO of Bowen Family Homes, said, "When it looks darkest is often the best time to buy a home."