High unemployment and foreclosures that are projected to increase are hampering a recovery from developing in Georgia housing markets. State law makers passed 13 tax credits in 2009 to aid the ailing Georgia economy, which is facing a state budget deficit expected to top $1-billion.
Despite rising home sales, the foreclosure epidemic is seriously impacting the state's markets with new subdivisions that were once under construction stopped in their tracks. The increase in home sales is expected, however, to gain momentum in the early part of the year due to an expansion of the federal program to move-up buyers.
In the Atlanta metro area, which comprises 16-counties home sales improved due to the first time home buyers tax credit in the bottom price ranges, but did little to affect higher priced homes. As home sales rise in the early part of the year the market will sell off much of its excess inventory, but is then projected to see a slow down once the tax credit expires in the summer. Atlanta average home prices are forecast to decline 7.8% in 2010, much less than the market's loss the previous two years.
In Savannah, the heavily dependent tourist industry has slowed as a result of the economy. Homes are being neglected along the historic community's downtown as they sit vacant awaiting foreclosure.
Savannah's market is composed of year round residents and vacation homeowners. Second homeowners who are unable to afford new higher mortgage payments or who have lost confidence in the market are letting homes go into foreclosure. Savannah housing prices are forecast to deflate 7.0% by year's end.
| City |
Forecast |
| Atlanta |
− 7.8% |
| Albany |
− 4.1% |
| Savannah |
− 7.0% |
| Columbus |
− 8.2% |
| Augusta |
− 7.4% |
In Columbus an ailing job market is hurting home sales with fewer sales than year ago levels amid falling home prices. The market did not see more transactions as a result of the federal tax credit and is not expected to see much of an improvement in 2010. The majority of homes that are selling are bargain priced foreclosures. Columbus housing prices are forecast to drop an additional 8.2% in 2010.
In smaller Albany, the market has been hampered by growing joblessness and business closings. The protracted delay in the housing market recovering is sending more and more homeowners into foreclosure, and shows signs of a market that will linger with sluggishness through the year. Lower prices and low interest rates should act to boost home sales eventually as long as the Fed keeps interest rates at or near historic lows.
Foreclosures haven't been an issue in Albany, but as economic turmoil spreads the market is expected to see rising defaults. The foreclosure epidemic is making a severe impact on the Georgia economy that will leave long lasting repercussions. However, Albany is protected to some degree since it did not see home values climb at double digit rates of appreciation during the boom. Housing prices are forecast to deflate just 4.1% in 2010, the lowest deflation in the state.
In Augusta after federal intervention stopped foreclosures of soldiers' homes serving in Iraq, the housing market saw improved sales to members of the military. However, a weakening economy with growing unemployment is battering the local economy and is projected to trigger more defaults. The crisis is forecast to send average home prices 7.4% lower in 2010.
