Georgia Real Estate: Hard Hit By The Recession

The current housing forecast for the state of Georgia looks less than sunny. Evidence of this can be seen in images of Atlanta developments vacated mid-completion, historic Savannah …

The current housing forecast for the state of Georgia looks less than sunny. Evidence of this can be seen in images of Atlanta developments vacated mid-completion, historic Savannah properties in foreclosure, and in Augusta, military families being displaced because of delinquent mortgages. Severe job losses and a struggling economy have eroded housing prices in this once booming southern market, with Atlanta faring worst, as its residential deflation is projected to exceed 14% for 2009. See the following article from Housing Predictor for more on this.

The recessionary economy is hurting Georgia after experiencing an all-time rise in home prices for years during the boom. However, you’d hardly know that in parts of Georgia the financial crisis is making a major impact as unemployment nears record levels. While home prices have begun a slight move upward in some areas, the majority of the state is toughening it out in one of the hardest hit housing markets in the country.

Year-over-year average prices are down in Atlanta, although the gap has begun to shrink as a result of the federal governments’ first time home buyers tax credit. As the end of the year approaches and home sales slow housing prices in Atlanta are projected to drift further south prompted at least in part by a trend of growing foreclosures.

The summer flooding experienced in the Atlanta area shouldn’t have much of an impact on its housing market. Bankers have been hurt in Georgia as many failed as a result of the real estate crash.

New subdivisions all around the Atlanta area are now only partially finished zombie developments left to decay. The foreclosure epidemic has put so much pressure on bankers that prices are being slashed to unload the inventory. Atlanta is forecast by Housing Predictor to sustain average housing deflation of 14.3% in 2009.

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In Savannah, where 100-plus year old Oak trees landscape the sidewalks of the historic district downtown few homes are actually listed for sale on the market by real estate agents. Many of those that are have been left vacant by their owners to be foreclosed by the banks bought at the peak of the market.

Local Georgia Housing Markets at a Glance

CityForecast
Atlanta− 14.3%
Albany−   3.8%
Savannah− 10.6%
Columbus−   8.4%
Augusta−   8.9%

Savannah attracts tourists from all over the world to its scenic waterways and port city, where cargo ships unload goods to be sold at market. There’s no growing inventory of foreclosures that will damage the housing market in Savannah, only the national credit crisis that has made it harder for home buyers to get financing. As a result of slower sales, prices are slumping and Savannah home values are forecast to deflate 10.6% on average by year’s end.

The housing market is getting by in Columbus with little momentum towards recovery. Sales under the $200,000 mark have had the most activity because of the federal tax credit, but little sales activity has developed in higher price ranges. Bargain priced homes are selling as first time buyers take advantage of the government’s $8,000 tax credit, and most of those are foreclosures or short sales.

Columbus isn’t suffering as much in its housing market as metro-Atlanta nor should it since it didn’t experience the over-building that the 16-county Atlanta Metro region did. But homes are forecast to experience deflation of 8.4% in 2009.

In Albany, the housing market is showing signs of extended sluggishness, but a small group of new business owners have taken on the challenging economy opening up new stores downtown, a rarity in the current economy.

Foreclosures aren’t much of an issue in small town Albany, where they only make up one-percent of the inventory of homes for sale. Although Albany is not projected to be hurt by the worsening national economy as much as other areas of the state, it will see housing values deflate forecast at 3.8% in 2009.

Far from the front-lines of Iraq, a strange sort of phenomenon is affecting the Augusta housing market. Soldiers serving in Iraq are having their homes foreclosed in the wake of the financial crisis. Federal efforts have been launched to halt the practice, but soldiers’ families are still left to deal with the mess. The Augusta housing market is deteriorating as a result of the rise in foreclosures and the credit crisis. Average housing values are forecast to fall 8.9% in Augusta for the year.

This article has been republished from Housing Predictor. You can also view this article at
Housing Predictor, a real estate analysis and forecasting site.

 

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