The long-running collapse of the U.S. housing market – which dates back to2006 – represents the largest drop in home values since the Great Depression. However, there now appears to be signs of hope that housing across the United States is finally beginning to emerge from the recessionary doldrums. This is good news for the economy. In fact, many economists believe that while the housing crisis contributed heavily to the Great Recession, a re-emerging housing market also will help lead us out.
Scotty Ball, a partner with the Gainesville, Ga.-based law firm of Stewart Melvin & Frost, is a specialist on the front lines of the regional real estate market. Scotty specializes in residential and commercial real estate law.
Question: We are certainly hearing a lot of good news lately about the housing market. Is this just wishful thinking or is the market really staging a comeback?
Scotty: I am certainly not an economist, but from my perspective as a real estate closing attorney, I am definitely seeing some positive signs. In my office, our real estate closings are up by 50 percent for 2013.
In fact, our office is so busy that we have had to staff up to keep up with the demand. Locally, we are even seeing construction of new homes picking up – which is quite an unusual sight from the past several years.
In Hall County, Breedlove Homes and Mundy Mill Homes are just two examples of homebuilders who have been particularly busy with new construction – particularly in the $140,000 to $150,000 range where demand is especially strong at those price levels. In South Hall, there are 20 homes now under construction in the Mundy Mill community alone – one of the hottest areas for new home activity.
Nationally, housing prices are up in nearly every major city across the country. The Standard & Poor’s Case-Shiller home price index, which tracks home prices in 20 American cities, last month posted the biggest gains in seven years.
So it appears that Hall County is tracking along with these national housing trends – if not even better than the rest of the country. We had such a deep housing collapse across metro Atlanta back in 2006 and 2007 that our “bounce-back” could potentially be greater in comparison to other regions.
Question: What do you read into Pulte Homes’ recent announcement about moving its national headquarters to Atlanta?
Scotty: Pulte Homes is one of the nation’s largest homebuilders. They are relocating their corporate base from Detroit to Atlanta. From an employment standpoint, the decision represents close to 350 management jobs and untold hundreds more future construction jobs.
But the biggest news angle about Pulte’s relocation is the symbolic message that the company is sending. In their announcement, Pulte recognized that the renewed homebuilding market in metro Atlanta is poised for tremendous growth in the near and distant future.
Question: What other positive signs are you seeing in our local housing market?
Scotty: I have definitely noticed a downward trend in the number of REOs which is Real Estate Owned property held by banks.
When so many homes were going into foreclosure after 2006, the banks essentially were forced into the real estate business. This drove down home prices in our local market because the banks were eager to unload these toxic assets to get them off their balance sheets.
But this year, I am witnessing much fewer bank sales which is one more reason why home prices are trending back up again.
I’m also hearing from local real estate agents that their inventory of available homes is very low. In fact, several agents are reporting new listings receiving multiple competing offers which of course is another contributor to rising home values.
Question: You referred to declining home sales by banks. Does that mean foreclosure activity in this area is finally slowing down?
Scotty: Yes, it is. The foreclosure section in the newspaper may still seem a little thick, but foreclosures are definitely getting back to a more normal state of activity. In fact, a report just came out this month that foreclosures in metro Atlanta have fallen back to their lowest levels since 2007.
Foreclosure notices in metro Atlanta are down by 42 percent from a year ago, according to an economic report this month (source: Equity Depot). That is an amazing turnaround.
One other telling sign of the falling rate of home foreclosures is the recently announced bankruptcy of Promiss Solutions which is a Georgia firm that is in the business of processing foreclosures for mortgage lenders and real estate firms. I hate to see anyone go out of business, but I have to admit that I definitely saw a “silver lining” in that bit of bad economic news.
So all in all, I don’t want to go out on a limb and proclaim that the housing market is back in full swing. But I’m very confident that we are definitely on the right track to recovery.