Home values are stabilizing and even rising in some areas. This is due to the patterns of supply and demand. But there are still a few wildcards to keep watching. Many sales are still “short sales” which means that the lender(s) are willing to accept a price that is less than the outstanding mortgage amount. Short sales are typically sold below the market rate. These types of sales are holding values lower than they might in a more normal market.
When you look at Metro Atlanta as a whole, we do see values improving. See the chart below for the positive trend in “$ per square feet”. This shows a 23% improvement in 2012. There is a little more to this story since the mix of what is selling has changed substantially as well. Last year, almost 50% of the sold properties were under $100,000. That should normally be 10-15% of the market. In 2012, we are seeing a more normal mix of price points which will make the “$ per square feet” higher. If you factor out the changing mix, we still see a positive trend.
The Case-Shiller Index is another good indicator of home values for our area. Case-Shiller tracks repeat sales or the price a property was sold for compared to the price that was paid when they bought. This index is widely considered to be more reliable than looking at average sales prices or median prices.
The Case-Shiller Index is reported every month at 9am on the last Tuesday of the month. The reports provide insight on 20 major markets around the nation including Atlanta. You will see articles in the paper and lots of coverage on the television news and the internet. Each month, our company provides a detailed article on the latest Case-Shiller Index which can be found on Prudential Georgia realty’s blog site ATLscoop.com.
The latest Case-Shiller Index reported on Tuesday, September 25th. So, what did these results show for Metro Atlanta?
The Case-Shiller Index was 94.15 which is 2.62% higher than the previous month. This continues to show a positive trend for the past 4 months. But our home values are still 31% down from the peak index of July 2007.
The housing bubble artificially inflated our home values but we believe they have over-corrected to the downside. As conditions normalize over time, so will our home values. The pace of recovery will vary depending upon your local market conditions.
We have access to proprietary market reports and trends that are not available to the public. If you would like to know the trends in your specific area or the value of your property, please contact us by visiting www.PetersenPartners.com.