So a guy owns a house and wants to sell it bad. He's already called five Realtors. No. 6 is on the line.

The man names his price — $265,000 — a good 50 grand higher than other homes on the block. So, No. 6 asks, what's up with that price?

Vino Wong/AJC (ENLARGE)

Realtor Doug Ferguson (left) searches for homes with his client, Ed Lease, on a quiet cul-de-sac in Gwinnett.

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Well, the man replies, I paid $145,000, refinanced last summer at $260,000, did some improvements and bought a bass boat and a Suburban.

"Are the bass boat and the Suburban included with the house?" No. 6, Tucker Realtor Lane Bailey, recalls asking the prospective client.

The conversation as remembered by Bailey reflects much of what's ailing the housing market today: the effects of easy lending and overly optimistic appraisals and a sudden sobering correction that's making it tough for many home owners to get out of their houses what they owe.

As real estate markets go, metro Atlanta's and consequently Gwinnett's, has not suffered as much as other markets. In those places, out-of-control appreciation driven by loose lending standards, imaginative appraisals and speculators drove prices through the roof.

But for sellers who have too much money in their homes to compete with bargain-basement foreclosures and truly desperate homeowners who must unload, and quickly, even Gwinnett's relatively stable market is an ugly scene.

"Of the 10,000 homes that are on the market in Gwinnett, there are probably 6,000 houses that shouldn't even be there," Bailey said.

Sales fell across the board in Gwinnett County in 2007, with even the "best" performing ZIP code, Stone Mountain's 30084, falling 2.7 percent, according to data provided by SmartNumbers, a firm that analyzes home sales data and spots trends in the real estate industry. The 30011 ZIP code surrounding Auburn saw the sharpest decline, 65 percent.

So far this year, things are little better.

Bailey, who tracks listings and sales across the county, said his data shows listings and sales have been down each month of 2008 compared with the previous year.

For instance, in March, listings were down 20 percent but the rate of sales was off by half. In April, listings fell 9 percent from 2007 but sales were off more than a third, he said.

"The buyers are unbelievable," said Duluth Realtor Mary King. "They only want the bargain."

That means homes that don't carry the most attractive price tag in the neighborhood aren't going to get sold, no matter how nice they are.

The problem is that many of the most attractive price tags are attached to homes that are in foreclosure, or facing that threat. And, until recently, real estate professionals say, banks have not been making it easy for would-be buyers to take advantage of the deals.

Banks that own homes or insist on approving private sales designed to prevent foreclosures have often required as much as two months to evaluate offers. Most homebuyers don't want to wait that long, King said.

But she said bank analysts are overwhelmed by the thousands of homes entering foreclosure.

"They're used to having 20 files on their desk, not 250," she said.

Most estimates suggest the housing market will not rebound until 2009.

Bailey, for one, sees a bump in foreclosures in coming months that will put further downward pressure on prices.

Bailey said he is beginning to see signs things may be improving. Investors lured by the promise of rising rental rates seem to be moving cautiously into the market, and new listings continue to fall — helping deplete the backlog of unsold homes.

Banks are moving more quickly to unload foreclosures and changes in lending standards allow more buyers to qualify for more secure FHA loans.

"There are a lot of positive things happening in the market and the only thing we are lacking is the statistics to show that it's turned around," Bailey said. "It can't stay this beat up forever because people need houses."

Source: SmartNumbers, using median home sales prices and sales volume compiled from 2007 and 2006 data for ZIP codes with 75 or more unit sales.