Published Saturday, August 16, 2008

Foreclosures in Coweta above U.S. average

The Newnan Times-Herald

While foreclosures nationwide increased by a shocking 50 percent, Coweta County has an even higher rate.

Foreclosures advertised in The Times-Herald almost doubled year-to-year, from 70 in July 2007 to 136 in July 2008. That's an increase of 94 percent.

During the same period, foreclosure filings grew by more than 50 percent nationwide, compared with the same month a year ago, according to data reported by The Associated Press.

Nationwide, more than 272,000 homes received at least one foreclosure-related notice in July, up 55 percent from about 175,000 in the same month last year, and up 8 percent from June, RealtyTrac Inc. said. That means one in every 464 U.S. households received a foreclosure filing last month.

The latest figures available for Coweta County from RealtyTrac were from May 2008, and they showed that one in 332 housing units received a foreclosure filing -- again, much worse than the current national numbers.

In Coweta County, the number of homes advertised for foreclosure in The Times-Herald has been creeping steadily upward over the past year. The number jumped from 70 in July 2007 to 112 in August 2007, then peaked at 156 in January 2008. There are 137 foreclosures being advertised in August 2008, compared to 112 advertised in August 2007.

Dr. William Joey Smith, an assistant professor of economics with the University of West Georgia in Carrollton, said that prognosticators were wrong when they predicted that the housing market had "bottomed out" months ago.

"The housing market just is not in good shape," said Smith. "I don't think anyone is declaring that it is."

Many people are now thinking that "it might be some considerably longer period of time to recover than has previously been forecast," Smith said.

Last summer, he said, many were saying that the housing market would rebound within nine months. That clearly hasn't happened, he said.

"It's been 12 months, and in some areas it's actually worse than it was 12 months ago," he said.

Coweta County isn't feeling the pain alone. In Troup County, one in 915 homes is in foreclosure. In Meriwether, it's one in 205. In Fayette, the number is one in 532. The Carroll County foreclosure rate is one in 270. In Fulton County, one in 156 housing units is in foreclosure.

"It's still a very, very tough market right now," said Mark Manis, co-owner of Wheeler's Building Supply, which went into bankruptcy due to housing market troubles earlier this year and has since re-formed under the same name.

"It hasn't gotten any better," Manis said. "There's pockets of activity around all over metro Atlanta, but they're just pockets. As far as we can determine, when it comes to new residential construction, all of North Georgia is really flat on its back."

He said the road ahead is "fraught with peril."

"It's a very weak market. I won't kid you," he said. "And it's really hard to build revenues when the market is so weak."

Local Realtor Frank Barron, president of Lindsey's, Inc. in Newnan, said he was clearly wrong when he said back in a March Times-Herald report that he hoped the market had "hit the bottom."

"Obviously, we were wrong," Barron said. "We weren't at the bottom, and I'm not sure we're at the bottom yet. I don't think anyone knows for sure when the bottom is going to come. But it does seem that we're a whole lot closer to the bottom than we were."

He was encouraged by July sales, however.

"We averaged a closing a day," he said. "If we could do that every day, I'd be happy."

Sales still aren't where they were or where they should be, Barron said. But he still believes Newnan's long-term prospects are good.

"We're doing better than we have in some of the previous months, and I hope we're seeing that the worst is now behind us," he said.

"But I will say that this does seem to be a prolonged thing, and maybe it won't be until late 2009 or even 2010 until we see strong demand for homes again," he said.

He said that when demand does come back, it should be very strong due to pent-up demand.

"And I think we're very fortunate in this area to have things like the new Kia plant in our proximity," said Barron. "We're in a good location, in the path of progress, and that progress will continue to run over us." Kia is building a new auto manufacturing plant in West Point, Ga.

Many people are anxious to see the results of the upcoming presidential election, he said, and the policies that will be implemented by the new president.

"Either way, there are going to be changes," Barron said. "So we're waiting to see what happens."

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 77,000 properties were repossessed by lenders nationwide in July, the company said.

Nevada, California, Florida, Arizona, Ohio, Georgia and Michigan had the highest foreclosure rates. Foreclosure filings increased from a year earlier in all but eight states.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can't find buyers or they owe more than their home is worth and can't refinance into an affordable loan.

The mortgage crisis has moved far beyond the subprime loans that started to go bust last year, especially as borrowers start to default because they have lost their jobs due to the sour economy, said Christopher Thornberg, a principal with Beacon Economics in Los Angeles.

"It's every part of the housing market that's getting whacked right now," he said.

As foreclosures soar, banks and mortgage investors are also facing a pileup of foreclosed properties on their books and are cutting prices dramatically.

RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June.

To speed up the disposition of the 54,000 foreclosed properties it owns, Fannie Mae is opening offices in California and Florida and is considering selling those properties in bulk to investors.

Dr. Smith said that, despite all the bad news, "we're still not technically in a recession," since the U.S. has not experienced two consecutive quarters of decline in GDP.

"And I'm seeing some very positive signs," he said. "Pending home sales in the South have actually started to turn upward."

That trend turned around from May to June, he said, and he couldn't help but be encouraged by it.

"That's a very positive sign because, if we can start selling off some of these homes on the market, and if we can start reducing the supply of homes, then the housing prices will start to stabilize," he said.

Foreclosed housing is depreciating everyone's property values, he said -- especially of homes in areas where the foreclosed properties are located. That encourages potential homebuyers to hold out and wait for cheap buys on foreclosed properties, but it also discourages investment in homes because foreclosed properties keep sapping out equity. No one wants to be upside-down in a house before they even move in, he said.

Dr. Smith said that he doesn't have any statistics to back it up, but he is seeing some "anecdotal evidence" that things are beginning to turn around.

"I've started to see some investors go into housing because they believe it's just so undervalued right now that they can't lose," he said.

"So if investors are beginning to feel like they can make some money in it," he said, "then there's some room for optimism."

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Here's a month-by-month breakdown of the foreclosures advertised in The Times-Herald classifieds:

* Sept. 2007 -- 109

* Oct. 2007 -- 130

* Nov. 2007 -- 116

* Dec. 2007-- 118

* Jan. 2008 -- 156 (up from 94 in 2007, 73 in 2006)

* Feb. 2008 -- 123 (up from 94 in 2007, 72 in 2006)

* Mar. 2008 -- 128 (up from 87 in 2007, 68 in 2006)

* Apr. 2008 -- 145 (up from 91 in 2007, 60 in 2006)

* May 2008 -- 128 (up from 71 in 2007, 85 in 2006)

* Jun. 2008 -- 125 (up from 79 in 2007, 62 in 2006)

* Jul. 2008 -- 136 (up from 70 in 2007)

* Aug. 2008 -- 137 (up from 112 in 2007)

Source: Times-Herald classified advertising department