Georgia home prices will decline in 2010 (movers, mortgage, credit)

[neil0311]

Originally Posted by AcidSnake

I think whole lot of prices will be falling... home prices, salaries, and probably the whole high living lifestyles that we in this country have been used to since the end of WW2.

We Americans have yet to understand the true fallout from NAFTA, the FTAs, and globalization. This current economic recession is merely a taste of what's to come.

The data don't necessarily bear that out at this point. However, if our government continues to drive down the dollar by borrowing more and more while spending more and more, then I fear that our standard of living will decline.

Home prices in many parts of the country have stabilized and may even be very slightly up in the last 6 months, and the free fall has stopped.

The Dow is up hugely from the March lows (approx 70%) and net worth is increasing for the majority of people who have retirement and other equity investments.

[AcidSnake]

What data?

Originally Posted by neil0311

The data don't necessarily bear that out at this point. However, if our government continues to drive down the dollar by borrowing more and more while spending more and more, then I fear that our standard of living will decline.

Home prices in many parts of the country have stabilized and may even be very slightly up in the last 6 months, and the free fall has stopped.

The Dow is up hugely from the March lows (approx 70%) and net worth is increasing for the majority of people who have retirement and other equity investments.

[noah]

The case Schiller index which was mentioned previously. Plus the fact that the market is up big just like it was in the early 80's followed by unemployment getting better 10-12 months later.

Originally Posted by AcidSnake

What data?

[neil0311]

Originally Posted by AcidSnake

What data?

How about the leading economic indicators?

The Conference Board Leading Economic Indexâ„¢ (LEI) for the U.S. Improves Again

[AcidSnake]

Hmm... Get back to me when the unemployment average for Georgia dips below the national average.

Originally Posted by neil0311

How about the leading economic indicators?

The Conference Board Leading Economic Indexâ„¢ (LEI) for the U.S. Improves Again

[DiderotsGhost]

Georgia is a large area. It's more useful to look at housing prices on a more micro level.

In rural Georgia, prices will probably go upwards, if only slightly. Prices in rural areas tend to never "revert from the mean" much to begin with, which means they didn't have far to fall.

In suburban Atlanta, prices will depend on a number of factors that will be difficult to predict. Option ARM resets, more bankruptcies, and the glut of homes being kept off the market because of "low prices" will put downward pressure on prices. If oil prices start getting too high again, that will also put downward pressure on some suburban areas - places like Dunwoody and Marietta might be alright, but outer exurbs in Gwinnett County might suffer.

In urban Atlanta, the same macroeconomic trends could put downward pressure on prices. Higher gas prices and the slow-coming national trend towards re-urbanization could put some upward pressure on prices. I think urban Atlanta is one of the best places to buy property in the country right now, but it's completely possible that prices will fall a bit more or that they will level off from here.

On a national level, I believe that prices will either slightly fall, stay steady, or slightly rise up till 2012. I don't believe there's any great rush to buy a new home. After 2011-2012, we probably revert to the old trend of modest real estate appreciation every year. You're not going to see 7% price appreciation like we did at the beginning of this decade again for a long while --- unless inflation gets out of control.

[neil0311]

Originally Posted by AcidSnake

Hmm... Get back to me when the unemployment average for Georgia dips below the national average.

Unemployment is a LAGGING economic indicator and indicates where we've been, not where we're going. There is a big difference between leading, coincident, and lagging indicators.

The question was about where will Georgia home prices, and by implication the entire economy, be in 2010. It will not be as bad as it is today or has been over the last year. Home prices are predicted to stabilize and improve in some areas, although Georgia is a big state with many economies within the state.

Does that mean we will never see another foreclosure or some parts of the Atlanta metro will not be in trouble? Of course not, but you have to look at what's going on more broadly and not judge everything by your own personal experience or that of your best friend or your neighbor.

EDIT: Just as an aside....news today from the Obama administration and prominent economists on this very topic: http://www.cnbc.com/id/33344386

[neil0311]

Saw this cited in another thread in the Georgia forum and thought it was pertinent and confirms my previous statement. From Wachovia's outlook for the Georgia economy dated October 2009:

https://www.wachovia.com/common_file...ia_Oct2009.pdf

"We expect home prices to bottom over the course of the coming year. Some price measures are already showing signs of improvement. The latest Case-Shiller price data for Atlanta show two consecutive monthly increases that cumulatively sum up to a 2.2 percent rise, but prices are still down 11.8 percent over the past year."

"Georgia and Atlanta are beginning to emerge from the deep recession that has plagued the nation and region for the past two years. Corporate relocation announcements have picked up, home sales are firming and several major companies have been able to tap the credit markets in recent weeks, allowing them to shore up the balance sheets and stabilize their operations. Most important of all, the state’s core competitive advantages remain intact. Georgia and Atlanta offer a compelling value for businesses looking to operate in the heart of the nation’s fastest growing region, with good schools and an unparalleled transportation network. That said, employment will still likely lag behind the nation as a whole, reflecting the region’s heavier reliance on the housing sector and the severe overbuilding of the greater Atlanta area."

[Sweet Atlanta Peach]

Originally Posted by neil0311

It is and will be a buyer's market for the next year at least, but that doesn't mean "things will get worse" and in fact the data don't bear that out. Look at the Case Shiller data and while prices are still down YOY, they are trending up in terms of absolute values, although slowly.

Don't expect a 10% appreciation (from the depreciated 2009 value), but some areas may see a 1% to 3% appreciation, or at least a flat line. Many areas will not see any significant additional depreciation.

Well, when I said worse, I meant that foreclosures will be still on the rise which will effect home resell prices. As someone mentioned, you still have some people with ARMS that will need to play out if they have not modified their mortgage or refinanced. As long as foreclosures are on the rise, sellers will have a tough time because nine times out of ten you can't beat a foreclosure price versus the price you paid for it at the time you bought it.

[neil0311]

Originally Posted by Sweet Atlanta Peach

Well, when I said worse, I meant that foreclosures will be still on the rise which will effect home resell prices. As someone mentioned, you still have some people with ARMS that will need to play out if they have not modified their mortgage or refinanced. As long as foreclosures are on the rise, sellers will have a tough time because nine times out of ten you can't beat a foreclosure price versus the price you paid for it at the time you bought it.

Possibly, but that will be location specific and not a general trend. The key is economic growth. If the economy is growing, then people are employed, companies are moving to Atlanta and hiring, and the slack in the market will start to get taken up.

Part of the problem in the housing market has been folks delaying an upgrade or buying a first home due to uncertainty about the economy. As the economy begins to grow, the 90% of us who are still employed begin spending instead of hunkering down, and that spending will also include houses.