The nationwide mortgage crisis is causing a slowdown in the housing market, and DeKalb is no exception.

Mortgage foreclosures across the nation reached between 200,000 and 250,000 in February, according to a report by RealtyTrac Inc., a company specializing in real estate data collection. The same company shows 24 homeowners in DeKalb have received a Notice of Default (NOD) so far this year.

The NOD is the first step in the foreclosure process.

A mortgage is an agreement between a buyer and a lender to secure a home loan using the home as collateral. If a buyer cannot make mortgage payments, the mortgage is said to be in default.

The current subprime debacle is the result of lenders giving too many high-dollar home loans to high-risk, or “subprime” buyers. When the so-called “housing bubble” burst, buyers could no longer count on refinancing their mortgages or selling their homes at a profit, and many were forced into default.

Realtor outlook

Nancy Watson, a local Realtor with Coldwell Banker-owned Primus Realty, said she definitely felt the effects of a housing slowdown.

“There’s no sense in kidding,” Watson said. “There’s a large decrease in sales.”

Watson said home prices are on the decline as well.

“What makes price is demand,” Watson said. “And when the demand goes down, the price is softened. With the stimulus packages going into effect, I’m hoping it won’t last long. People really ought to take advantage of the market right now.”

Watson also said she thinks the Federal Reserve Board’s recent lowering of the interest rate by three-fourths a percent will impact the market.

“There’s not a better time to buy a home because interest rates are at an all-time low and there’s a great supply of homes,” Watson said.

Construction concepts

Local builder Ken Anderson, president of the DeKalb County Building and Development Association, has also noticed a slowdown in new home construction.

“Just driving around the communities […] you can see it,” Anderson said. ” […] The company I work for has slowed down considerably and I even got laid off myself.”

Data from the city’s Community Development Department show a 45 percent decrease in new residential building permits in the past two years. In 2006, 121 permits were issued, while only 55 were issued in 2007. It is still too early to see new trends in the current year, though the first two months of 2007 did see six such permits granted, compared to only one in the first two months of 2008.

However, Anderson does not attribute the slowdown entirely to the current mortgage situation. Anderson said he has been in construction since the early 1960s and he has seen this before.

“It’s just a period that we’re going through and things just need to be corrected,” Anderson said. “We were getting way out of hand and things were growing too fast.”

Anderson said impact fees are a big factor in the housing slowdown. An impact fee is the one-time tax a city charges on new buildings to offset the potential costs to schools, land and city services.

“That’s one of the things that’s hurting [new construction],” Anderson said. ” […] I think it’s been just building up and getting bigger and bigger and people just can’t afford it.”

Anderson does not see the Federal Reserve interest rate cut doing much to help the situation.

“I don’t think it will have much of an effect at all on housing. It doesn’t seem to be working right now,” Anderson said. “The other cuts didn’t seem to do much for the market and I think the only way we’re going to get this market back is for consumers to get their confidence back in our economy.”