The number of foreclosures in Georgia has fallen dramatically in the past year, but when it comes to stressed homeowners, the state remains one of the nation’s leaders.
During 2015, there were 24,239 completed foreclosures in Georgia, the fifth-highest number among the states, according to a report this week by CoreLogic, a California-based real estate information firm.
Together, the top five states accounted for almost half of all foreclosures completed national, CoreLogic said.
Florida led with about 79,000 foreclosures, followed by Michigan with 50,000, Texas with 30,000 and Ohio, just slightly ahead of Georgia, with 24,456 foreclosures.
But Georgia’s picture has grown far less dire: In 2014, there were more than 30,000 completed foreclosures in Georgia and that was vastly better than previous years.
Roughly one-third of all homes are owned outright and have no mortgage. But among those with a mortgage, 3.2 percent in Georgia were seriously in delinquency – that is, the owners were 90 days or more behind in their mortgage payments.
That percentage is down 20 percent from a year earlier, CoreLogic said.
The improvement in Georgia parallels what is happening nationally, said Frank Nothaft, chief economist for CoreLogic. “Completed foreclosures are down more than 20 percent for the year, which is the lowest level since 2006, before the crisis.”
Foreclosures are both a symptom of distress and a force that adds to it. People often lose their homes because they are have lost a job or face an unexpected expense. The loss of a home takes away what is, for many Americans, their largest asset.
In the case of the national housing crisis, foreclosures began during the boom times as a rising sign that all was not well.
The number of foreclosures started to accelerate in the last several years of the housing boom as the most precarious mortgages to the most challenged borrowers – typically categorized as subprime loans – started to go bad. But when the housing bubble burst, prices began to plunge, unemployment soared and the wave of defaults became a virtual tsunami washing away many prime borrowers.
Georgia –driven mainly by Atlanta’s overbuilding frenzy – was among the national leaders in both the boom and the crisis that followed. Prices here peaked in mid-2007, then plunged.
As the crisis spread, an estimate quarter-million homeowners eventually lost their homes in metro Atlanta alone. CoreLogic puts the total number of foreclosures since mid-2008 at more than 6 million.
The economy began to expand in mid-2009, the job market bottomed about a year later and average home prices started to rise again in 2012. The number of foreclosures too have been falling.
This week’s report shows how improvement there has been.
Yet there is also an upside to foreclosures: they open up a pool of lower-priced homes that can serve as entry to the market for first-time homebuyers. As foreclosures decline, so does the supply of cheaper homes.
And if there is one glaring weakness in the metro Atlanta housing market, it is a strong flow of first-time homebuyers. And lack of inventory – that is, homes for sale, particularly at the low end – has been problem for the market, said Charlotte Sears, president of Coldwell Banker Brokerage.
Other elements are in place for a strong market, she said, during a recent housing conference at the Federal Reserve Bank of Atlanta. “It’ll be a great year if we have houses to sell.”