Atlanta Housing on Front Page of Wall Street Journal

Posted by Daniel Jones on Jun 1, 2011 5:55:00 PM

Atlanta made a short list of four cities where home values are now below year 2000 values. The others on the list are Detroit, Cleveland and Las Vegas. Atlanta values are 1.6% below the year 2000 index value and down 27.9% since the housing peak. Nationwide housing prices fell 4.2% in the first quarter of 2011 after declining 3.6% in the fourth quarter of 2010. This is not good news for the economy as typically housing and consumer spending lead economic recoveries.

Separately, a business research group said that its confidence index fell to 60.8 last month down from 66 in April as Americans grew more pessimistic about the economy. Economists say it could take years for housing to recover, and for that to happen we need faster economic growth, lower unemployment and higher consumer confidence. It doesn't help that economists are scaling back their economic growth estimates for second quarter.

Twelve of the twenty metropolitan areas tracked in the Case-Shiller home price index showed new lows in March. With home equity sinking there is little demand for new or trade up homebuyers. Although home values stabilized last year while we had a new homebuyer tax credit that was very short-lived. Although many people, including myself, have called this a double dip in housing prices, the simple fact is we have never really started to recover.

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