Forclosures take toll on home values

Forclosures take toll on home values

Foreclosures left abandoned for weeks, months, or years at a time can take a big toll on nearby home values. In the end, everyone in a neighborhood can feel the fallout.

Can some of these foreclosures be saved? Investors in recent weeks are certainly snapping up foreclosures in bulk and turning them into profitable rentals. But what about some of the foreclosures left lingering … the ones that no one seems to want?

A Morgan Stanley’s analyst recently estimated that nearly 95 percent of distressed homes are in such bad shape and not even suitable for renting.

In Detroit, which has been plagued by foreclosed homes the last few years, firefighters there are proposing a controversial new plan: Let the homes burn.

If the vacant building is more than 50 percent on fire and does not pose a risk to nearby structures, they propose to let it burn, and in the meantime, help save the city money … and maybe save nearby property values too?

The proposal comes at a time when Detroit is experiencing a series of suspicious arson fires, which has led to dozens of vacant buildings and homes blazing.

“We are in no way looking to ‘let the city’ burn, this is about saving lives and money,” Donald Austin, Detroit’s executive fire commissioner, told WDIV-NBC in Detroit. “My department is strapped, the budget is strapped, and it’s time to look at a new way of doing things.”

The proposal still has to win approval from city officials. Some argue that the buildings are uninhabitable and will eventually be torn down so firefighters might as well let them burn instead of wasting more money trying to salvage the unsalvageable. But others argue the vacant homes should not be able to burn unless they are on a predetermined demolition list.

Detroit has an estimated 80,000 vacant homes and buildings, according to a new documentary, “Burn,” about Detroit firefighters. The fire department estimates that 40 to 60 percent of the city’s fires are in vacant structures too. Some of these fires are being caused from scrapping, in which thieves remove metal piping or other building materials from a home leaving it vulnerable to catching fire.

Several cities across the country aren’t leaving their eyesores to flames but instead a bulldozer to chip away at its deteriorating foreclosures. For example, this past summer, Bank of America announced it would donate some of its foreclosed home inventory–homes that were deemed uninhabitable–to local agencies for demolition in Cleveland, Chicago, Detroit, and other cities. Other banks announced similar steps. The land in many places will then be used for new development or open space.

“There is way too much supply,” Gus Frangos, president of the Cleveland-based Cuyahoga County Land Reutilization Corp., told Bloomberg News back in July. “The best thing we can do to stabilize the market is to get the garbage off.”


Kelly Olsen Headshot
Author:
Phone: 201-669-7520
Dated: May 7th 2012
Views: 1,113
About Kelly: Having the right real estate agent means having an agent who is committed to helping you buy or sell...

Property Search








RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

2018 Top 10 Hottest Zip Codes - Realtor.com®'s 2018 Top 10
MENDHAM FOOD TRUCK FESTIVAL - Food Truck & Music Festival in
MORRIS PLAINS PETTING ZOO IS BACK - THE MORRIS PLAINS LIBRARY WILL
The Mortgage Deduction Impact On Real Estate - The good news is that people will

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

Keller Williams Realty Metropolitan
55 Madison Avenue
Morristown, NJ
973-975-0003
973-539-6888