Many homebuyers feel like they are in limbo while they wait for clues about when to buy. Foreclosures are up, home prices are down and government fixes are advertised every day. The market analysts cant seem to agree on what the information means. Most of the readily available statistics give you a picture of whats going on nationwide, not whats going on in your particular market. Lets take a look at the good things happening in the Atlanta market.
The United States Congress passed, and the President signed, The American Recovery and Reinvestment Act of 2009 giving first time homebuyers a refundable tax credit of no more than $8,000. The home must be purchased between April 8, 2008 and December 1, 2009. Homebuyers must have a down payment of at least 3.5%, but the Federal Housing Authority is allowing buyers to use the credit to pay for closing costs and interest rate buy downs, as well as other costs related to closing the loan. First time homebuyers are defined as tax payers who have not owned a home as their principle residence at any time during the three years prior to the date of purchase.
Georgia passed its own tax credit into law for homes purchased between June 1, 2009 and November 30, 2009. This $1,800 tax credit can be used by any homebuyer, but only on homes on the market before May 11, 2009 and are still for sale or in default on or before March 1, 2009 or already foreclosed and held by a bank or mortgage company. The Georgia tax credit is not affected by the Federal tax credit.
In May, The Atlanta Journal Constitution ran a story about the slowing pace of the decline in home prices in Atlanta. The Case-Shiller report shows Atlanta home prices are down 21% from the market peak in 2007. But the good news is that the average closed price for single family homes was $191,803 in April which was a $10,000 increase over March. For the first time since 2005, April home sales exceeded March home sales.
According to Eugene James, Division Director for Metro Study in Atlanta, the number of foreclosed listings are 13% of the total, which is lower than this time last year. These are good signs. The reduction of foreclosure inventory is a goal of the Georgia Tax Credit.
Home prices in Atlanta rose steadily over the last several years, but were not excessive. Therefore, while our 21% home price decline seems awful, cities like Los Angeles with a 40% decline and Las Vegas with a 50% decline have a much tougher road ahead. Lets face it price declines have made housing affordability the best its been in years.
Unless you are paying cash for a home, you will need a mortgage. Interest rates have started to rise and are currently at a 7-month high and they are still historically low. Low rates play into the affordability index.
Having your own home is still the American Dream. Neighborhoods that used to be out of reach for a lot of people are now affordable and still a good deal.