Home sales up in county; foreclosures steady

LAWRENCEVILLE - A flood of buyers purchased Gwinnett County homes the first week in December while foreclosures held steady.

Those reports caused local experts to express a cautious optimism about the immediate future of the county's economy.

About 10 times as many Gwinnett County homes (1,667) were reported sold the first week in December as did the previous week (163), according to numbers issued by Magellan Home Data. The week before that, 214 Gwinnett County homes were sold.

While the county's home foreclosures spiked to 1,022 in October, the first time in a five-year history that foreclosures had reached the quadruple digit mark, those numbers leveled off to a steady 755 in November and 750 this month. Foreclosures have fluctuated between a low of 589 in February to November's high of 755 in 2007, with the exception of October.

That's good news, said Roger Tutterow, economics professor at Mercer University.

"There's recognition that it is a good time to be on the buying side of the market," Tutterow said. "There's been a lot of builders and bankers seeing a lot of inventory not moving and that is not good for the general health of the economy. There's a plus side to having higher inventory - there's more for consumers and there's a willingness to be more aggressive in sales through discounting and offering incentives."

Experts said October's foreclosures increased when a number of adjustable rate mortgages repriced themselves to a range higher than owners were able to pay.

Folks aren't out of the woods yet, said Anthony Mitchell, director of the home ownership center at The Impact Group, a Duluth-based foreclosure counseling service.

"2008 is going to be tough year, worse than 2007," Mitchell said. "That's what I am hearing from leaders in the industry and banks can only leverage and absorb so much."

President Bush presented on Thursday a mortgage bailout plan that would let some home owners freeze their interest rates for five years. The plan is designed to help responsible homeowners avoid foreclosure, rather than bail out lenders and speculators, Bush said.

Bush's plan drew mixed reactions locally.

"By stabilizing the market, it will open opportunities for lenders to do more creative financing to other home buyers and the economy gets a spill-over effect," Mitchell said. "Some say the borrowers took a risk and we should not reward that behavior. But to do nothing is a danger to the economy."

The government should not train borrowers to expect to be rescued when they make poor financial choices, Tutterow said, but conceded that things might get worse without intervention.

"Where we are today is elevated, but the worry is what will happen in 2008 in terms of volume of ARMs scheduled to adjust," Tutterow said. "What percentage of households will adjust their spending and what percentage will walk away?"