Atlanta Foreclosures are Beginning to Sell

There’s no doubt that one of the major contributing factors to the current economic climate of the Atlanta real estate market is the number of foreclosures. Unfortunately, the high foreclosure rate has taken a heavy toll on the banks and made them a little less willing to finance a home loan. Well, on the plus side, banks are beginning to see relief in the foreclosure department, according to a recent article published by the Atlanta Journal Constitution.

Many bankers have begun to report higher sales in foreclosure than usual. One bank in particular that was highlighted in the article was Douglas County Bank. Billy Mahew, the CEO of the bank, said they were facing numerous foreclosures earlier in the year, but over the last several months the bank has been fortunate enough to sell at least one foreclosed home for every three new houses taken back from the builders.

Many bankers are starting to feel optimistic, while others feel it may be too soon to tell. The crisis has hit Atlanta hard as many banks lent money to homebuilders and subdivision developers within the last several years only to face large losses. However, recent housing data suggests a turn around in the near future. Atlanta’s new home inventory has shrunk and is down 37% from the previous year, which means homes are selling.

Mark Hancock, managing director at the Private Bank of Alpharetta has sold 80% of his bank-owned homes in his portfolio, while Mayhew of Douglas County has been selling between 15 and 20 bank-owned homes each month. While homes typically sell for less than their loan value, this is still quite an improvement.

Of course the $8,000 tax credit has been fuel for these houses selling and continues to be a positive motivator. The good news is the tax credit has been extended another 6 months, which will hopefully continue to boost sales. Now with the tax credit open not only to first-time homebuyers but also to those who have purchased before, we can be hopeful the positive streak will continue.