From the AJC:

For less than the price of a decent used car, you can buy a home in Atlanta today.

Actually, real estate agents list a dozen choices for $10,000 or less.

Step up in price to $20,000 and your choices expand 10 fold.
The prices seem absurd but they are part of a real estate market suffering with rampant foreclosures, mortgage fraud, abandoned investor properties, a collapsing mortgage industry and other ills. The market is unlike anything seen in metro Atlanta in years and it has local tax assessors and appraisers as confused as anyone.

What is the value of a lot if no one can get a loan to buy it? How should you value a home that sits on the market for a year with no offers? When a neighborhood has several foreclosures, short sales and abandoned properties, do they set the market

Unfortunately, those foreclosures, short sales and abandoned properties do in fact set the market. While historically such transactions would be overlooked because they occurred between a distressed, non-willing seller and buyer, that is not the case anymore. With so many foreclosures and short sales, they represent the true reality of real estate values. Lenders know this, and adjust the limit of the loans they will extend accordingly. The city is only now figuring this out as well.

As Fulton’s chief appraiser, Burt Manning finds it hard to believe any parcel in Fulton is worth less than $10,000.

Still, real estate listings prove they are.

“We are trying to understand all these things,” said Manning. “What’s the right answer? We don’t know. It’s tough. I’ve got entire neighborhoods where all I’ve got is distressed sales. I don’t have any good sales.”

With the City of Atlanta’s massive budget shortfall, any potential loss in property tax revenue does not come as good news.  But the simple truth is that those distressed sales are good, and truly represent the value of the property being bought and sold.

Wayne Flanagan, a RE/MAX agent who sells bank-owned properties, said in zip codes like 30310 and 30315 values have taken a nosedive faster than public officials can account for.

“There are some price ranges like $20,000-$80,000 where 90 percent of the properties on the market are foreclosures,” Flanagan said. “You’ve got one bank competing against another. It’s a spiraling situation, downward.”

It’s a very vicious circle, indeed.

The agent said when tax values and true values are way apart, it can keep properties from selling and further depress values. Flanagan said he’d had a $95,000 deal on a duplex fall through recently because it was being taxed at $300,000. The buyer didn’t want to be saddled with taxes at that level.

“They (government officials) are going to have to take a look at this,” Flanagan said. “We are experiencing some of the same problems as Detroit, taxes are so high they drive down value.”

It’s an enormous problem, and one likely to continue for the foreseeable future.