A dozen or so would-be investors and a few curious onlookers gathered near the Fayette County courthouse steps Tuesday, waiting for foreclosed homes to be auctioned off to the highest bidder.
Those present amicably chatted beneath umbrellas shielding them from the late-morning sun.
Every 20 minutes or so, a lawyer would arrive, walk up the steps and read the legal jargon detailing the bank auction of a foreclosed property somewhere in Fayette County.
At the end of the long speil, the attorney announced an opening bid. A condo in Peachtree City hit the block first Tuesday. Even with a starting price of just $56,000, no one present offered a bid. A little over an hour later, an expansive two story home in a newer neighborhood off of Redwine Road went back to the bank for $275,000 -- a drastic drop from its value just three years ago.
The casual nature of the auction process hides its dire consequences. These monthly foreclosure fire sales send ripples throughout the county, dragging down home values and harming the local economy.
“Once a house is sold on the courthouse steps, it hits the neighborhood and hurts the value of the surrounding homes,” explained Johnny Bolton, the President of the Fayette County Board of Realtors.
“It’s better for everyone if the property doesn’t make it to auction. Even if a home is in foreclosure, we really don’t see the value of the surrounding homes affected until the house actually goes to auction.”
The number of Fayette residences that have gone to auction in 2009 is hard to determine. Since January, the Fayette County News/Today in Peachtree City legals section has published 1022 total foreclosure notices. However, approximately 400 of those were repeat listings; meaning that a homeowner was able to meet some condition to avoid foreclosure after the orginal notice ran, but then fell back into trouble with the lender during the following month.
Accounting for the repeat listings, the county has seen somewhere less than 600 distinct properties come under foreclosure so far this year. Many of those have yet to go to auction, but the ones that have helped depreciate Fayette’s overall home values.
“In 2008, the average sale price of a home in Fayette County was $297,211. According to the Georgia Multiple Listing Service, 1,075 total homes were sold in the county last year with an average time on the market of 106 days,” Bolton said.
“In 2009, we’ve sold 490 homes with an average sale price of $268,398. The average list time is 114 days. It’s an alarming trend.”
Still, Bolton is quick to point out what he sees as a silver lining.
“It’s not as bad here as it is in other places in the metro area,” he stated. “I see things improving in Fayette County. Our trends are starting to move in the right direction. And with home prices down, it remains a tremendous buyers’ market.
“There’s quite a few banks that are holding thier assets rather than auction them off and that helps with home values. The banks only do this if they believe that the housing market is going back up.”
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