For those of us in the housing industry, 2013 continues to bring good news. It’s been five long years since the housing bubble first burst, and Georgia has been one of the states that was hardest hit. Here are a few areas where we can point to improvement for this year.
• The foreclosure rate in Georgia is declining.
Admittedly, there is good news and bad news about foreclosures in Georgia. The bad news is that Georgia has the highest percentage of foreclosure-related sales in the country. More than one-third of sales, 35 percent of all home sales in Georgia were foreclosure sales. That compares to Illinois (32 percent), California (30 percent), Arizona and Michigan both at 28 percent for the first part of 2013.
But the good news is that the rate of foreclosures is down almost 50 percent for the first half of this year, according to RealtyTrac. During the first half of 2013, Georgia has had 33,741 foreclosures so far, representing a 47 percent drop over the same period last year. In 2012, there were 58,741 foreclosures through July. (These numbers do not count actual foreclosures, but homes that are advertised for foreclosure.)
This is good news for all homeowners, even those who are not in the market to buy or sell a home. The large number of foreclosures in the Atlanta market dropped values for all homeowners. Now with fewer advertised foreclosures, that means fewer homeowners are defaulting on their loans. That also contributes to the continuing low inventory of homes available, which has been leading to higher prices.
• Consumer confidence continues to rise.
As we addressed in a previous Thought Leadership column, consumer confidence has been a missing ingredient in the housing industry recovery. In that column in October 2012, the Conference Board Consumer Confidence Index was 71.6. The index continues to rise and in June was at 81.4.
Lynn Franco, Director of Economic Indicators at The Conference Board, said, “Consumer Confidence increased for the third consecutive month and is now at its highest level since January 2008 (Index 87.3). Consumers are considerably more positive about current business and labor market conditions than they were at the beginning of the year. Expectations have also improved considerably over the past several months, suggesting that the pace of growth is unlikely to slow in the short-term, and may even moderately pick up.”
While the state of Georgia continues to struggle with the rate of foreclosures and homes that are underwater, the market in metro Atlanta is on the rebound. Last month homes prices were up an average of 10 percent, and many homes in desirable neighborhoods are going for more than their asking prices.
According to the Atlanta Board of Realtors’ monthly Market Brief, the area’s median sales price for June was $215,000. That is a 46.3 percent increase from last year and a 7.5 percent increase from May.
We still have a ways to go before we our housing industry will be completely healthy. But things are heading in a positive direction.