by: Richard Elliot Updated:
ATLANTA - August foreclosure notices in metro Atlanta are down to their lowest numbers since December 2008, but one expert warns it's just an illusion.
"It seems like great news. My opinion is that it's an illusion," said Foundations Realty Group owner Michael Brock.
Brock specializes in selling foreclosed homes for banks. He said there is a two-year supply of foreclosures still in the pipeline, something he calls the "shadow inventory."
Brock said after a robo-signing scandal two years ago, new regulations are making it more difficult for banks to sell their foreclosures. He also believes the banks will drop a new wave of foreclosures within the next several months, causing metro Atlanta's housing market to take a double dip.
"And once two years’ worth of inventory hits the market all at the same time, you can imagine what that's going to do to home values," said Brock.
But Steve Palm of the real estate tracking firm Smart Numbers LLC isn't quite so pessimistic. He agrees that there is a shadow inventory still lurking out there that could drop within the next year, but he doesn't believe the foreclosures will have that big an impact on housing prices.
"There's still more and more people wanting to buy foreclosures and rent them out," said Palm. "It's easy to rent a home right now."
Palm predicted the housing market collapse more than a year before it happened, and said metro Atlanta's home prices have been going up steadily for about a year. While he's not predicting skyrocketing prices, he thinks they will continue a slow but steady increase.
"There's such a low inventory," said Palm. "At the end of July, we were at four-and-a-half months of supply, which is unheard of. Our records go back 20 years, and we've never seen it that low."
At the peak of the foreclosure crisis, Palm said metro Atlanta had a 14-month supply of homes.
Michelle McCreary bought her Paulding County home 11 years ago. She said they've wanted to sell, but the market is just too soft right now. She hopes things improve.
"I feel there's not a whole lot we can do about it right now until things improve," said McCreary. "I'm hopeful. With prayer, man, anything can happen. So I just hope that's where it goes."