Market improves as year passes

By John Adams

For the AJC

Recently I visited with the Douglas County Chamber of Commerce. While feeling the recession like everyone else, these entrepreneurs and business executives from west metro Atlanta are determined to not only weather the current storm, but emerge stronger. Here are some of their questions.

Q: How is the real estate market doing in metro Atlanta, and when can we expect to see some visible signs of improvement?

A: The market is hurting. We have a glut of homes for sale, both new and resale, and buyers are taking their own sweet time in deciding whether they want to take the plunge. From a purchaser’s perspective, interest rates are low and sellers are quite willing to negotiate. But lenders have seriously tightened their approval requirements, and unless you have a large cash downpayment or perfect credit (or both), it may be difficult to obtain the financing you seek.

To complicate matters, many neighborhoods in metro Atlanta are littered with vacant bank-owned homes. And just to pour salt on the wound, lenders have ordered appraisers to include sales of foreclosed homes to their list of comparable sales. Until the inventory of bank-owned homes declines, our market cannot fully recover.

Q: When will things start to improve?

A: For this question, I yield to Federal Reserve Chairman Ben Bernanke, who said recently that he saw “signs of stabilization” in the housing industry, and that he believed that the recession would be over by the end of this year.

As for the Atlanta real estate market, some agents I am talking to tell me that houses inside the perimeter are generally selling faster and for more money than similar homes outside the perimeter.

Additionally, local bankers are cautioning that the commercial real estate market might suffer more.

I reminded the group of two important facts:

● We are not in a depression, and any comparison to the 1930’s is extravagant exaggeration; and

● These things tend to come and go in cycles, and we are likely nearing the end of this recession. Anyone offering a more specific prediction is only guessing.

John Adams is a broker and investor. He answers real estate questions on radio station WGKA (920am) every Saturday at noon. For more real estate information or to make a comment, visit www.money99.com.