Has housing market started to turn?

By Charles Oliver, charlesoliver@daltoncitizen.com

Despite rising foreclosure rates, some local observers say the decline in the Dalton housing market may be at or near its end.

“I feel like we are at the bottom. How fast we pull out is the uncertainty,” said Darren Payne, owner-broker for Century 21 Belk.

According to data provided by First American CoreLogic, the Dalton foreclosure rate among outstanding mortgage loans in April, the latest month available, was 1.61 percent, up from 0.83 percent in April 2008. But the foreclosure rate was still below the national average of 1.8 percent.

From May 2008 to April 2009 there were 1,491 foreclosure filings in Dalton, or approximately 4.08 per day, according to First American CoreLogic. In contrast, from May 2007 to April 2008 there were 808 foreclosure filings, or approximately 2.21 per day.

“We’ve still got a surplus of foreclosures, and that surplus has brought prices down,” Payne said.

First American CoreLogic reported that Dalton housing prices fell 1.62 percent in April from the previous year, compared to a 10.97 percent decrease in March.

Industry observers say the falling prices are attracting people back into the market.

“We are seeing an increase in foreclosure business as well as the re-sell business,” Payne said. “Confidence has come back somewhat even with unemployment the way it is.”

The preliminary unadjusted unemployment rate in the metro Dalton area (Whitfield and Murray counties) dropped to 12.6 percent in May, down from a revised 12.7 percent in April, according to the Georgia Department of Labor.

Ron Griffin, mortgage manager for First National Bank of Chatsworth, said he is also seeing some light in the local housing market.

“We are at or at least near the bottom of the current cycle. We can see an increase in sales activity, although a great deal of that activity is in the purchase of foreclosed properties,” he said.

Payne said the housing market could get a boost across the nation if Congress adopts a proposal by Sen. Johnny Isakson, R-Ga., to increase the tax credit for homebuyers.

The government currently provides an $8,000 tax credit for first-time homebuyers. Isakson’s bill would boost that to $15,000 and make it available to all homebuyers.

“That would have a huge impact,” Payne said.

The bill is co-sponsored by Senate Banking Committee chairman Chris Dodd, D-Conn.

Some observers say it’s too soon to know if the drop in unemployment is the start of a trend.

“We can’t speculate on whether we are at the bottom, but we are hopeful that if we are not at the bottom yet, we have at least slowed the acceleration,” said David Gregg, chairman of the Dalton-Whitfield Chamber of Commerce and president of Alliance National Bank. “We continue to hear mixed things from our customer base. Those sectors that are more closely aligned with the housing market continue to be slow, while other industries have either stabilized or are seeing moderate growth such as those that are tied to staple goods or various service industries.”

Bradford Rowe, president and CEO of First National Bank of Chatsworth, said he isn’t seeing any more declines.

“I’m not seeing a downtick. We seem to be holding our (business) loan levels. Interest rates are still low for both housing and consumer borrowing. We certainly continue to lend,” he said.

Gregg said he hopes recent steps taken by the Chamber of Commerce and local governments will help the area bounce back quicker when the recovery does start.

“The Chamber of Commerce, along with local governments, has made great strides in working on economic development,” he said.

Gregg pointed to the “freeport” inventory tax cuts adopted last year, as well as the new industrial park planned by the Whitfield County Board of Commissioners as steps that will make the area more attractive to business.