BUYERS' BLINDERS

For would-be buyers firmly in the grip of gloomy projections, sometimes the facts don't matter.

If you just look at the numbers, Atlanta's housing market should still be booming.

After all, the Metro Atlanta Chamber of Commerce is pegging job growth in the region at more than 9 percent for the five-year period from 2005 to 2010. And the area consistently ranks among one of the most affordable major metros in the country. Still, like other areas of the country, a home-buying malaise is creeping across Georgia like unchecked kudzu, and for the positive aspects of Atlanta's outlook, buyers just aren't, well, buying it.

“Frankly, there's so much negative news media that has talked about the housing bubble that even though there's continued good job creation, and even though the affordability index in Atlanta is very, very high, consumer sentiment is down,” says Patrick Malloy, president of Patrick Malloy Communities. “They continue to read all the bad news, and it turns into a self-fulfilling prophesy.”

That sort of sentiment is hanging over many regions nationally, even as job growth and other factors remain stable. “There's a lot of psychology involved from the buyer's standpoint right now,” says Jonathan Dienhart, director of published research at Hanley Wood Market Intelligence. “They're not convinced that prices are going up, so the pressure to buy goes way down. A lot of home buyers can afford to wait on the sidelines for six months.”

For Malloy, that sentiment change has resulted in contingent buyers canceling contracts due to the fact that they couldn't sell their own homes, despite the fact that Malloy doesn't accept contingencies in the first place. “A lot of our buyers had every intent of qualifying for both homes, and if they didn't sell their existing home, to keep it as a rental property,” Malloy says. “But now that a little of the bullishness has been taken out of the market, they're saying now might not be the greatest time to own two homes. Sure, we get to keep their earnest money, but we lose the sale.”

For home builders, that's not a positive trend, regardless of what the numbers say.