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alstry (36.32)

A Living Nightmare??? Home Values Down OVER 90%

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May 17, 2008 – Comments (5)

For less than the price of a decent used car, you can buy a home in Atlanta today.

Actually, real estate agents list a dozen choices for $10,000 or less.

Step up in price to $20,000 and your choices expand 10 fold.

The prices seem absurd but they are part of a real estate market suffering with rampant foreclosures, mortgage fraud, abandoned investor properties, a collapsing mortgage industry and other ills. The market is unlike anything seen in metro Atlanta in years and it has local tax assessors and appraisers as confused as anyone.

What is the value of a lot if no one can get a loan to buy it? How should you value a home that sits on the market for a year with no offers? When a neighborhood has several foreclosures, short sales and abandoned properties, do they set the market?

 

Therein lies the problem for tax assessors.

As Fulton's chief appraiser, Burt Manning finds it hard to believe any parcel in Fulton is worth less than $10,000.

Still, real estate listings prove they are.

"We are trying to understand all these things," said Manning. "What's the right answer? We don't know. It's tough. I've got entire neighborhoods where all I've got is distressed sales. I don't have any good sales."

In fact, seven of Atlanta's least-expensive homes are listed on average for $8,800 but taxed at an average value of nearly $93,000.

The cheapest, at 336 Adelle Street in the Lakewood area, comes in at $5,900. Tax records list its value at $101,700.

The problems are pronounced in areas like West End, Lakewood and Vine City.

Wayne Flanagan, a RE/MAX agent who sells bank-owned properties, said in zip codes like 30310 and 30315 values have taken a nosedive faster than public officials can account for.

"There are some price ranges like $20,000-$80,000 where 90 percent of the properties on the market are foreclosures," Flanagan said. "You've got one bank competing against another. It's a spiraling situation, downward."

The agent said when tax values and true values are way apart, it can keep properties from selling and further depress values. Flanagan said he'd had a $95,000 deal on a duplex fall through recently because it was being taxed at $300,000. The buyer didn't want to be saddled with taxes at that level.

http://www.ajc.com/metro/content/metro/atlanta/stories/2008/05/11/assess_0512.html

 

The fallout will be incredible.  Forclosures skyrocketing.   Bankruptcies Skyrocketing.  Tax revenues evaporating.  Jobs and services lost.   All for what?  The American Dream turning into a living nightmare.

And they tell us the credit crisis is behind us?  Enjoy the eye of the strom while it lasts, the fun part is about to start.

And this is Atlanta....Not Michigan or Ohio.....You think 30% price reductions were a big deal?  Just wait for CA(13% of America's economy), FL, AZ, and NV.  Now add in TX and Carolina's deterioration, you have potentially about 50% of the new home market in America about to implode.

Sorry, I forgot the experts tell us those markets already imploded.  Keep listening to the "experts."

5 Comments – Post Your Own

#1) On May 17, 2008 at 9:39 AM, alstry (36.32) wrote:

Folks, when some of the homes are selling at these prices and sitting on the market in these areas, ALL the homes are worth these prices in these areas.

The loss of wealth is incredible....especially if it is leveraged becuase many lose.  The Homeowner.  The Debt Holder.  And the Municipality.

Forclosures are starting to explode in areas where new homebuilders congregate.  Many of the homes were sold in the last four years at inflated values.  Many of the buyers leveraged up and now can't afford the payments or are unable to sell leading to tens of thousands of foreclosures. 

Builders are competing against more and more foreclosures every month!!!!!!!!!!!!!!

You know there are much more coming because the default notices are skyrocketing in these areas.  By this fall, the hit has about to sit the fan.

Right now, in CA, 3 out of 4 sales are foreclosures.  In many condo and HOA communities, the HOA defaults are so high that homes in the community are not elligible for financing.  Good luck selling there if you are an existing owner or the developer.

SPF got its mortgage facility cut off and now has to self fund mortgages....how long do you think that will last before its evaporating cash evaporates completely.  Then what happens to other HBs when the same rolls towards them.

It is getting more difficult to sell houses and more difficult to obtain financing....how long will this last?  We will save that for another post.

 

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#2) On May 17, 2008 at 9:55 AM, alstry (36.32) wrote:

NEW YORK CITY ABOUT TO DERAIL????

There are estimates where between 300K to 400K direct and indirect job losses in NYC are forecasted as a result of the credit crisis and financial slowdown.

Incoming container shipments have slowed dramatically at the ports in NJ.

What happens to such a large city when so many people lose their jobs in one location?

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#3) On May 17, 2008 at 11:56 AM, Evlampius (< 20) wrote:

Wow that is unbelievable, although I still feel skeptical about the source, do you know any publications that can confirm that?

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#4) On May 17, 2008 at 11:57 AM, EScroogeJr (< 20) wrote:

"There are estimates where between 300K to 400K direct and indirect job losses in NYC are forecasted"

alstry, do you have a link?  Even 100K would be a godsend. If I thought we'd have as much as 5000 foreclosed apartments hit the market this year, I wouldn't even bother with stock investments. The only trouble is, I have no hope for ANY slowdown in NY, and I don't see Wall Street shedding even 3K to 4K jobs. 

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#5) On May 17, 2008 at 7:41 PM, camistocks (< 20) wrote:

Yeah, it really looks bad. A typical dominoes are falling thing.

But I think the government/Congress will step in at a point and create a fund that will buy mortgages from banks that are in trouble, so that they stop throwing people on the streets and selling homes at 90% discounts.

See, the Resolution Trust Corporation created in the 1989 to solve the S&L and housing crisis back then.

Heck I've read and ad were a seller is so desperate he asks for a few hundreds of dollars plus a donation, but only if you like, that is. 

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