Maybe it’s just a measure of tough times for the traditional daily newspaper, but I’ve lately been getting more quality economic information from the Atlanta Business Chronicle than from the Atlanta Journal-Constitution.
According to “54% of Atlanta mortgages under water” in yesterday’s ABC, the number of Atlanta homes with mortgages in negative equity was only about 30% at the end of 2009.
According to Stan Humphries, Zillow chief economist:
â€œWhile the tax credits did not hurt the housing market, they did delay its bottom by interrupting the housing correction that was taking place. Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean weâ€™re getting closer to the bottom. The housing recession is likely in its death throes, and we expect to see sales pick up in early 2011. That will lead the way to home values stabilizing and an eventual bottom later this year, although it will take several months of increased sales activity before values begin to respond.â€
I was writing many months ago in my SMN column about the failure of the tax credits to solve the problem, and wrote a lengthy post here about the counter-productive credits: Homebuyer tax credits: A post mortem.
FWIW, I think Humphries sounds overly optimistic on his timetable, if we confine our predictions to the Atlanta area. Atlanta’s home price trends (as we see in the most routinely followed data from Case-Shiller and CoreLogic) have lagged the country — they stayed high too long and have come down later. Now Atlanta could conceivably be on the verge of a downward spiral for a number of months, especially if the state economy does not rebound more quickly.
In related news, CoreLogic (a repeat sales index like Case-Shiller) noted a steep drop just from Nov. to Dec. in home prices nationwide. See “CoreLogic: House Prices declined 1.8% in December” on Calculated Risk. That’s a 1.8% decline from Nov. to Dec., which would obviously annualize to more than 20%. We will not see a decline in 2011 of that magnitude (I’m pretty sure), but I’d be surprised if we didn’t see another 10% decline. (Many analysts are predicting a decline in the range of 5-7%.)