Anybody home?

Out here in the country, we’re still accustomed to knocking on our neighbor’s door, then poking our head in and hollering, “Anybody home!?” Do that in the Big City and you’re liable to get shot… or maybe get a Louisville Slugger up the side of the head.

But one thing that has become starkedly apparent is the number of foreclosed properties in urban and suburban neighborhoods.

And, the foreclosure crisis has spawned an entirely new set of problems in the real estate market: Vacant or abandoned properties.

When a property has been foreclosed, it becomes what is called either bank owned or REO Real Estate Owned. Either way, the former owners are out, and the house sits empty. Not good for the neighborhood.

Here are some industry stats:

  • Since the foreclosure crisis hit the fan, the number of vacant homes has exploded. The Census Bureau reports that in July of 2008, over 2.1 million homes were classified as vacant or abandoned and up for sale. In 2010, it’s only gotten worse.
  • This is a whopping 2.8% of ALL homes listed for sale.
  • Newer homes built after 2000 are the hardest hit, with a vacancy rate of over 10%!

Abandoned homes are also a drain on the local community.

If a neighborhood has more than several abandoned homes, the value for all properties in that location are depressed. Boarded up buildings look blighted, and that rubs off on everyone else and brings down property values in the “hood.”

Vacant properties also invite vandalism, further eroding the resale value of neighboring homes. As more and more homes remain vacant, local businesses begin to suffer either closing their doors or laying off employees. So, generally, foreclosures are just bad for the whole area.

Tax revenues decrease and local governments are hard pressed to provide necessary services. These lost tax revenues also hurt the local school system where your kids go.

As prices fall, many remaining homeowners begin thinking its time to get out while they can. But it’s a Catch-22; the vacant properties have made it increasingly difficult to find buyers.

Banks hate holding onto these foreclosed homes empty houses dont bring in any revenue.

Plus, just trying to maintain these homes is a huge drain on cash flow. If something goes wrong (such as pipes bursting, sewers overflowing, mold damage occurring) it could be weeks before the problem is even noticed and repairs dont come cheap!

If you come along with a solution to the abandoned property dilemma, banks will gladly consider a big discount on the selling price just to be rid of the albatross hanging around their necks.

Meanwhile, if you have a lot of calls coming in, you might become overwhelmed with the number of possible buyers (and sellers) in depressed markets. (Some brokers are actually making a living doing this!) If that’s the case, then you might look into get a Virtual Assistant to automate those phone calls, voice mails and faxes that you WILL BE receiving. Look into it: it could be a life saver.

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