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Posted: September 15, 2010 12:30 a.m.

Home sales up; foreclosure rate steady

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Home for sale: This house at 5116 King St. is one of 873 foreclosed properties that have been resold by banks in 2010. RE/MAX Realtor Charlotte Gibbs said the house was a steal at its $20,000 asking price.

The housing market continues to send mixed signals, but overall sales numbers are up in Newton County.

Realtors are optimistic that the market will continue to promote home buying, as prices and interest rates remain depressed, while foreclosure numbers remain high.

As of Aug. 16, home sales between individuals are up about 9 percent for 2010 compared with last year, according to both the Newton County Tax Assessor’s office and the East Metro Board of Realtors.

The trend is positive, because it could signal that the market is becoming less dependent on foreclosure re-sales, which keep housing market prices down. However, foreclosure sales by banks remain the dominant sale type in the market, accounting for 78 percent of sales this year.

“(The market) is starting to slowly turn, but it’s still investor heavy. Some people are starting to take advantage of the Neighborhood Stabilization Program and others,” said Landis Stephens, broker and owner of Stephens Development Group. “We’ve seen an increase in sales, and it’s mostly on the lower tier of homes which is fine for me, because I believe that’s where people need to be. The under $120,000 market, we’re seeing a large increase of buyers in that arena.”

While the stabilization program is still available for low to median-income buyers, the first-time homebuyer tax credit recently expired at the end of April, so the upward bump in 2010 could be a false reading.

“You had the $8,000 credit and you had a lot of activity spurred in the market. I think we’ll see a big slowdown in the sales market, a big difference between first six months and last six months,” said Tommy Knight, Newton County’s chief tax appraiser.

Knight said part of the slowdown may be seasonal, because families tend to save money to make big holiday purchases. Butch Morton, president of the east metro board, said he thinks numbers will stay strong. Knight and Morton agreed that opinions are spanning the range.

“Those buyers looking to come into the market now are different buyers. The first of year we had a lot of first-time homebuyers using the tax credit. The buyers now are looking to increase their portfolio when they’re seeing some promotional sales,” said Morton, who also owns Butch Morton #1 Realty. “What I’m seeing is buyers who won’t be affected by Christmas coming up, because they’re just looking for good deals.”

Morton said according to the Georgia First Multiple Listing Service, which contains only a portion of available homes in Newton County, there were 1,032 properties on the market in August, 86 of which sold. An 8 percent ratio of sales to listings is a good number, he said, and higher than previous periods, where the ratio had fallen as low as 2 percent.

“Before the downturn in market things were moving east in that corridor anyway,” Morton said. “That trend will continue as things pick up.”

Foreclosures
Knight said there are about 160 foreclosures per month in Newton County so far this year, about three more per month than in 2009. There have been 1,104 foreclosures through mid-August. Despite a higher early pace, the county will finish under the 1,889 total from 2009, barring another late-year surge.

Knight noted that about one-third of the foreclosures are vacant lots.

Using the multiple listing service numbers, Morton said foreclosures are down 9 percent, possibly because banks are opting to do more short-sales, to avoid the cost of foreclosures.

“In my opinion, there’s never been a better time to buy a home. Values and interest rates are great; people are buying now,” Morton said. “The bottom line as a seller, is that you need to understand that you’re competing with bank-owned properties, whether foreclosures or short sales.”

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