COVINGTON - The first quarter of 2009 was grim for the metropolitan Atlanta residential housing market, including Newton County, according to a report from Coldwell Banker NRT Development Advisors.
In Newton, foreclosures accounted for almost 48 percent of total sales for new construction and about 46 percent of resales, the report states.
The average sales price on new construction dropped 37 percent from first quarter 2008, from $230,563 to $144,371. The average sales price on resales dropped 29 percent, from $136,953 to $97,103.
Active listings on new construction in Newton dropped 45 percent, from 687 to 377, while active listings on resales jumped 39 percent from 1,435 to 2,001.
The average market time for new construction for first quarter 2009 deteriorated 10.6 percent to 198 days from the same time period in 2008, and resales deteriorated by 16.5 percent to 103 days.
Finally, single-family detached housing permits have decreased by 83 percent, from roughly 85 in first quarter 2008 to 12 in 2009.
But these dire statistics aren't only being seen in Newton.
"This is typical of just about every county," said Bob Romano, executive vice president at Coldwell Banker NRT Development Advisors.
"Foreclosures are putting downward pressure on prices. Starts are non-existent. Builders are not building houses because lenders are not lending money," Romano said.
Overall, the metro Atlanta residential real estate market did not see the high levels of appreciation that other markets witnessed during the past few years, but did see a significant decrease in absorption and sales prices during the past year, according to the report.
That can be attributed to the economic recession, a high unemployment rate, an oversupply of new construction, restrictions placed on lending guidelines and the amount of existing and new foreclosures.
For the entire 15-county area studied, total closings were down 20 percent, and overall average sales prices were down 28 percent.
The number of permits issued for single-family homes and condominiums/townhomes has reached an eight-year low, the report states, likely due to the difficulty of obtaining project financing, over-supply and low demand and high construction costs.
New construction foreclosures on single-family houses increased a whopping 573 percent, while new construction foreclosures on condominiums and town homes rose an astounding 1,144 percent.
In addition, the number of refinance loans jumped 319 percent from January 2008 to January 2009.
Despite all the gloom and doom presented in the report, Romano said there is hope the market will improve.
"Certainly it is, the question would be when. I think there's still a little bit more pain out there from everyone's perspective," he said.
A tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence between Jan. 1 and before Dec. 1 has helped, Romano said. But to really do some good, that incentive needs to be broadened to cover all home buyers, he added.
State incentives and stable interest rates are also helpful, but to get further out of the hole, job growth is needed, he said.
"I think we're poised, but I think the administration has to do something to offer broader stimulus in housing. That would pull us out a lot faster," he said.
In hopes of stimulating the housing market further, U.S. Housing and Urban Development Secretary Shaun Donovan recently announced that the Federal Housing Administration will allow home buyers to apply the first-time homebuyer tax credit toward the purchase costs of a FHA-insured home.
Families have only been able to access the credit after filing their tax returns with the IRS. Now the FHA will allow state Housing Finance Agencies and certain nonprofits to monetize up to the full amount of the tax credit, depending on the amount of the mortgage, so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.
NRT Development Advisors, based in Atlanta, is a real estate brokerage company speciality division of Coldwell Banker serving as a strategic advisor for new construction residential developments.
To view the NRT report, visit www.DevelopmentAdvisor1Q2009.com.
Crystal Tatum can be reached at firstname.lastname@example.org.