Why are a lot of single homes for sale in the bad economy?

I am not trying to brag but i live in a wealthy neighborhood where the house owners are all lawyers,doctors,businessmen or woman or businessowners, and they seemed to live comfortably but suddenly now already 4 houses in the neighborhood are for sale. Is this because of the economy? Please explain.Why are a lot of single homes for sale in the bad economy?
May be that they had teaser rates on adjustable mortgages. When the teaser rate re-sets, the average homeowner has to cough up $800.00 per month more. That put a lot of people over their budgets, and it is happening all of the time. That is one of the reasons the Fed keeps lowering interest rates to the banks--so that the banks can avert these high resets. Another problem is that many businesses are being affected by the credit problem-less credit at higher prices- so there is less liquidity. And, the banking, real estate, and construction sectors have been hit


hard. People are losing their jobs. What does this add up to? More vacant houses, lower real estate prices, and people who can't meet their debt obligations. Lastly, since real estate prices are falling, some people have no equity in their homes. They'd rather turn over the keys than pay for


an asset that is declining--where the mortgage is higher than what the house is worth. So, they turn over the deed and keys to the lender, and then they don't have to spend on a mortgage and upkeep for a home that's lost significant value, and won't be coming back any time soon...Why are a lot of single homes for sale in the bad economy?
Their selling or losing their homes because they bought them with next to nothing down, with the prospect that every year, your house increases in value.. 5% or more.. So as the house values went up, they had that much money into their houses.. So what did they do, instead of just keeping the new gained value in the house,, they went out and refinanced the house , and took the new extra value money out of the house, and then started paying the new mortgage.. Then the following year, it kept going up, so they did it again and again. Fine as long as it was going up! It stopped going up last year,, and started going down...Plus instead of having a same payment for say 30yrs,,theirs changes maybe every two to five years.. and the payment goes up!! So now the value is going down,, and their payment is going up, and they cant refinance,because the house is worth less than they owe.. The house payment is now higher than they can afford.. Their in big trouble!! And all the big owners have these kinds of loans, so now their ALL in big trouble and nobody can pay their bills, and they cant sell their houses because no that many people can afford them,, THUS the housing CRISIS!! Thats about all of it!! SOLOMON
A lot of people live well beyond their means - would you have much confidence in an attorney who drove a beat up old car? So for show he drives a BMW and makes big payments - same for the house, clothes, etc. coupled with education loan repayments. When the economy gets tight it hits all people. Those that do not extend themselves by charging everything are the best off. A lot of house loans have adjustable rate interest - pop another 1-2 or 3% on a $500K loan and you have an extra $1000+ payment a month. Plus the housisng market is dead, so houses sit for a long time making them all visable at the same time. For fun check out the book ';The millionair next door';
When I was 18 I had a dead-end overnight job that barely paid my bills.. I worked with a very successful attorney that took the job to afford his house payments.





It is possible they are living beyond their means, took ARMs and cant afford the payments now that their loans had reset. Have prices dropped dramatically in your area? They may be using the downturn to upgrade as well!
I have learned first hand that people sometimes present a lifestyle to others that isnt necessarily truthful. Ive seen it close at hand with a couple of friends around us. I have even found myself feeling jealous of what some of those friends have, even though we make around the same ballpark of income.





I remember telling my husband at times ';Why cant we afford the same things, why cant we go on vacations like they do';?





My husband always responds with ';We can have all that, we can do all that...we can buy 2 brand new cars tomorrow...we can go on a european vacation tomorrow, but we will have to finance every single bit of it';.





He reminds me that this is what they are doing. He reminds me of how great we might feel getting those imediate gratifications, but how depressed we would be afterward, and how we would end up divorcing each other because we would be stuck around each other 24/7 without any money to do anything at all anymore. We wouldnt be able to afford another vacation to take a break from the bills that were racked up from financing one.