By Valerie Baldowski
Realtors in Henry and Clayton counties are taking a look at what the housing market may do in 2009. One is tentatively predicting a turnaround, while another expects a tough market for at least another year.
According to Dottie Wise, an associate broker for Metro Brokers in McDonough, as of December, her realtors' Multiple Listing Service (MLS) book showed a surplus inventory of 3,083 homes on the market in Henry County. By comparison, there was a surplus of more than 4,000 homes in January 2008. Wise said the decrease in the inventory of homes points to better sales. "That's positive. That's a good sign. It's been getting better all year, it says we are working our way out of a decline."
Wise broke down the listings from December 2008, explaining that of the 3,083 homes on the market, 6.7 percent were foreclosures. "That 6.7 percent, in a recession, is not that bad," she added.
Wise said in Henry there is a 13-and-a-half-month supply of homes for sale. Although the housing industry is still a buyer's market and will stay that way for a while longer, the situation is improving. "I feel we are working our way back to a balanced market," she continued. "It's not going to happen overnight. It's going to be a slow process."
Wise said this year, many five-year, adjustable rate mortgages will reset. When that happens, the new rates will result in higher monthly mortgage payments. That could push the foreclosure rates up, unless interest rates stay low. If they do, she said homeowners can refinance to a 30-year, fixed-rate mortgage to be able to afford to stay in their home.
Also in 2009, she predicts an increase in first-time homebuyers in Henry. An incentive for them will be a $7,500 tax credit created specifically for those buyers.
"First-time homebuyers drive the market," said Wise.
David Barton, vice president of Government Affairs for the Metro South Association of Realtors, said the housing issues facing Henry are not the same as those facing Clayton, although both counties can improve. "Stabilizing the housing market is the number one priority in turning it around."
In 2008, Barton said, 2,736 homes sold in Henry County, compared to 3,568 in 2007. In Clayton County, 3,175 homes sold in 2008, compared to 3,362 in 2007.
Barton is working with the Housing Authority of Clayton County to promote a Neighborhood Stabilization Program, which involves using $9.7 million in Housing and Urban Development (HUD) funds to renovate and resell foreclosed properties.
He said in addition to the slow economy and high unemployment, other issues affecting home sales in Clayton are the county school system's loss of accreditation, and political issues which give the perception that Clayton is a bad place to live.
"In Clayton County, the housing market is perpetuated by issues relating to the schools. Perception is the reality," added Barton.
Because of the steady decrease in home values in the past several years, he continued, homes would need to see a five percent annual appreciation in value for the next five years to reach the point where the housing market was in 2005 and 2006.
By comparison, he said, Henry is doing better.
"Henry has been a good, stable county. If they can control the rental side of it, they can control the investors," Barton said.
The main issue facing the housing market in Henry, he explained, is the problem of developers partially building subdivisions, but not completing them. When that happens, there are too many vacant homes on the market. Investors buy them and if they rent them out, it can lower the surrounding property values. That leads to transiency and crime, he said. "[Renters] are moving in and out at will."