Review of 2009: Good, bad, ugly

By John Adams

For the AJC

No question that 2009 was a tough year to be in the real estate biz.

Perhaps the best that can be said is that 2009 was a year to forget, at least from a real estate point of view.

The good:

Some of us will look back at 2009 with happy thoughts.

You may have been lucky enough to have scored the hat trick of Atlanta real estate in 2009. Found a great deal on the house you wanted, locked in a super-low fixed-rate loan, and picked up a totally tax-free first-time home buyer credit of $8,000 at the closing table.

It now looks like Atlanta home prices bottomed out in June, and I doubt we’ll ever again see prices that low.

Likewise, you may be one of the smart folks who was wise enough to refinance their home loan last year. History may show that 2009 was one of the best in many to lock in a 30-year fixed-rate loan. With the current massive level of government spending intended to help end the recession, it appears that inflation and higher interest rates are almost guaranteed. And anyone who locked in at any rate below 5 percent will likely be glad they did for years to come.

The bad:

Stricter loan underwriting guidelines coupled with tougher credit requirements and increased down payments made it hard for anyone to qualify for almost any kind of loan last year. Many who in years past would have been candidates to become first-time home buyers were kept on the sidelines, having to delay their buying plans while they struggled to save money.

Meanwhile, unemployment joined mortgage rate resets on exotic loans to fuel a remarkable volume of foreclosures in the Atlanta metro area. Lawyers lined up at county courthouses to auction thousands of homes to nonexistent buyers. Investors quit buying damaged houses when Fannie Mae literally stopped lending to real estate entrepreneurs.

Vacant bank-owned homes fueled a glut of inventory, and declining values denied many refinancing attempts. To add salt to the wound, beleaguered appraisers became super conservative in their estimates of market value, stopping many buyers in their tracks.

The ugly:

As recently as 2000, the 13-county Atlanta area experienced a total of about 15,000 advertised foreclosures. In contrast, 2009 saw a sad total of more than 117,000 homes advertised as going to the auction block.

While you can say that this statistic is nothing more than a symbol of the problem, these homes are poisoning our market.

Let’s hope that 2010 marks the beginning of a sharp decline in foreclosures and renewed opportunity in the Atlanta real estate market.

John Adams is an author, broadcaster and investor. He answers real estate questions on radio station WGKA-AM (920) at noon Saturdays. For more real estate information or to make a comment, visit www.money99.com.