What is going on with Atlanta's real estate?

Question

Why is there a glut of foreclosed homes on the market? What is going on with market trends in Georgia, specifically Atlanta?

Answer 1

This is happening all over the country
It started in the sub prime mortgage market.
People were encouraged to buy houses that seemed to be going up in value, if your credit was bad, you still got a loan, you could state your income and not have to prove it, Incentives of low interest for first two or 3 years allowed people to get mortgages......BUT.

Interest rates went up, and people couldn't afford the payments, the ARM mortgages re-set at higher rates and people couldn't pay the payments, credit was tightened and new people couldn't qualify for houses, too many houses were being built and not sold, prices started dropping, soon a lot of people owed more money than their house was worth.
With new credit restrictions, some homeowners cannot qualify for loans based on new credit rates and credit rules so foreclosure puts more houses on the market.

The credit crucnch is working it's way up the house chain, as people with cheap housing,can't sell to move up into better housing, and the better housing people can't sell to move up to expensive housing.

It is a mess.

Answer 2

It's gonna get worse. All that creative financing is coming home to roost. Folks who couldn't afford that great big house took out interest only first and second mortgages. Now they have interest rate adjustments or balloon payments and they can't afford the new payments.

Properties were over appraised and/or mortgaged for more than 100%. All that equals negative equity.