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Foreclosures ravaged homeowners in the southern half of DeKalb County when the crisis first struck. Now, a wave of foreclosures is rumbling through the county’s northern neighborhoods as well.

Banks foreclosed on nearly 1,500 north DeKalb homes in 2007. By 2010, the number more than doubled to 3,988, according to figures from the Atlanta Regional Commission. In the super district categorized as northwest DeKalb, foreclosures swelled from 8.7 per square mile to 22.4 per square mile from 2007 to 2010. The number of foreclosures in all regions of north DeKalb has accelerated steadily in recent years.

As foreclosures in the northern neighborhoods rise, homeowners in the southern half of DeKalb continue to experience higher numbers. But the reasons for this upswing in foreclosures in the north are different from the circumstances that first ignited the wave of home repossessions in south DeKalb according to Mike Carnathan of the Atlanta Regional Commission.

“Foreclosures in south DeKalb were driven largely by subprime loan products and concentrated in low-income areas,” Carnathan said. “But once the recession kicked in and unemployment increased, the foreclosure crisis morphed from a problem with loan products to an unemployment problem.”

Daren Blomquist has observed a national trend of increasing foreclosures in more affluent areas such as north DeKalb.

Blomquist is vice president of Realtytrac.com, a company that tracks and lists foreclosed properties all over the country. The company also analyzes statewide and national housing market data to predict trends.

Nationwide, houses in the $500,000 to $1 million range have seen the highest increase in foreclosures of any other category—a 489 percent increase since 2007. During the same time period, foreclosure of lower-priced houses have also increased but at a much lower rate than higher priced properties did, he added.

According to Blomquist, the recession is not the only factor driving up foreclosures in affluent neighborhoods. Just as with low-income homebuyers, many who purchased high-end homes during the housing boom also obtained risky loans, he said.

“The well-to-do thought they could afford the houses they were in but ran into a situation where they can no longer afford their home,” he said. “They were able to hold out longer than the less well off, but as the recession dragged on, those homeowners finally fell into foreclosure.”

Many obtained adjustable rate mortgages, or ARMs, that allowed them to start off paying only the interest (or less than the interest) for an initial period of five to seven years before the rate readjusted to a much higher mortgage payment.

At a time when property prices were steadily increasing, it seemed like a good investment. But the economic downturn and plummeting property values led many of those homeowners to rethink their investment, Blomquist said.

“Many of these owners have now opted for a strategic default. These people are financially savvy and found it best to walk away from their upside down home loan situation.”

According to Realtytrac figures, foreclosures in Georgia were the highest in the nation in May for the first time since 2006. And there is no sign of a significant reversal of mounting foreclosures in north DeKalb.

“House values are a big issue,” Blomquist said, when it comes to predicting whether the north DeKalb foreclosure trend will continue. “If we see values continue to decrease then we will likely see more homeowners walk away. The key is to look at home values.”