Charles Oliver
Dalton Daily Citizen
DALTON — A flood of foreclosed houses into the market has created a great environment for home buyers but has taken away a lot of the bargaining power of those looking to sell their homes.
“I’ve been showing property every single Saturday or Sunday since Jan. 1. I’m showing property. I’m getting contracts, and people are getting unbelievable bargains,” said Debbie Daniels, a Realtor with Coldwell Banker Kinard Realty.
Late spring and summer are typically when owners put their homes on the market. But Realtors say that showings have risen dramatically and sales have begun to pick up.
“It’s an opportune time to enter the market. There are great values, record low interest rates and government tax credits are still available,” said David Gregg, president of Dalton’s Alliance National Bank.
What’s driving these great bargains?
Realtors and bankers say that foreclosed houses being brought back into the market are having a big impact.
“That’s about the only thing providing any momentum right now,” said Ron Griffin, mortgage manager for FNBC Mortgage.
Foreclosure listings in The Daily Citizen more than tripled between 2007 and 2009, from 1,733 to 5,976.
According to First American CoreLogic, which tracks the housing market, the foreclosure rate in the Metro Dalton area, which includes Murray County, rose to 4.07 percent in December 2009 from 1.67 percent in December 2008. Dalton’s foreclosure rate stood well above the national rate of 3.16 and the state rate of 2.49 percent.
Further, the 90-day delinquency rate in Dalton almost doubled to 11.38 percent in December 2009 from 5.78 percent in 2008.
The flood of foreclosures coming back into the market has driven prices down. Dalton’s housing price index dropped 3.1 percent in December 2009 compared to December 2008, according to First American.
“The thing that seems to be hurting the market right now is that the foreclosures are out there, and they’ve got bargain prices,” said Griffin. “You may have your price for sale, and the people who are looking at it are looking at foreclosures. And the lenders that own them can afford to take less.”
And since appraisals are based on sales, those bargain prices drive down the value of other homes. That leaves those who wish to sell with less bargaining power.
“It used to be that someone who wanted to get $300,000 for their house might list at $350,000 so they’d have room to negotiate. They are not doing that anymore. They are listing it for what it’s worth,” said Daniels.
Bankers say the decline in home prices has taken a big bite out of the refinance market because people who might be expected to take advantage of low interest rates cannot or will not because their home has declined in value.
They also report the purchase market is not as strong as one might expect with all of the favorable conditions for buyers. Part of that, they say, may be that people who would ordinarily be looking to sell their home and trade up can’t because of the decline in values of their current houses.
Dalton State College economics professor Robert Culp says some potential buyers may be looking for even better bargains.
“Some people may be saying, ‘Why should I buy when the market is continuing to drop?” he said.
Are Dalton housing prices at the bottom yet? Local experts are divided.
“I don’t think they will decline any more. But I think it will be a long time before prices begin to rise,” said Darren Payne, owner-broker for Century 21 Belk.
But others say prices could continue to fall.
“I don’t think we are anywhere near the bottom of getting rid of the foreclosures because more are still being added,” Griffin said.
House prices may continue to fall, and interest rates are expected to stay low. But home buyers will lose one advantage at the end of April when federal tax credits for some housing purchases, including an $8,000 credit for first-time buyers, expire.
Realtors say they expect March and April to be busy as buyers scramble to sign contracts before the credits expire.
But will the end of the credits take a bite out of home sales?
“I hope that’s not the case. There are still going to be great buys out there after April 30,” said Daniels.
