Can the banks make simple Real Estate changes that will boost the economy:
Today on our graduate call we read a few new articles that shed light on how a healthy real estate market can be the key to a healthy economy. We read an article that states that in China property values have dropped for the 5th straight month. The government there has analyzed how that is now effecting a slowdown in markets like cement, steel, and heavy machinery. They also correlate a slowdown in sales of automobile, construction, and decoration materials. China can easily see how a slowdown in the Real Estate market effects their whole economy.
We had this same situation with the area of Detroit on a large scale. Recently a large parcel of foreclosed properties was auctioned off to a bidder that wants to rebuild this blighted area. According to the article from businessweek.com, Detroit have proceedings in place to foreclose on 56,000 properties and another 75,0000 parcels next year.
The banks tend to take their time in enforcing the foreclosure process which has brought on large areas with multiple foreclosed properties. Some home owners wait for the slow process but others leave allowing the property to become an eyesore which creates more havoc. These types of homes have been termed “zombie” foreclosures because they are in foreclosure for a long period of time without anyone in the home.
It seems the banks in 2006 made the mistake to lend to anyone out of greed, and now in 2014 they are waiting to foreclosure which we recognize affects the economy in a very detrimental way. This relates to the wide scale situation in Detroit. The following article from a news station in Las Vegas discusses the situation there and the president of RealtyTrac mentions a solution.
Las Vegas leads nation in “zombie” foreclosures
Posted: Oct 29, 2014 11:17 AM MST Updated: Oct 29, 2014 10:02 PM MST
By Steve Kanigher, I-Team Reporter
LAS VEGAS — Las Vegas led all large metropolitan areas in the country from July through September with 33 percent of its residential foreclosures involving property that had been vacated by the homeowners, RealtyTrac reported Wednesday night.
Nevada also was second among states at 32 percent, behind only Oregon at 36 percent, according to the real estate analytics company from Irvine, Calif. RealtyTrac referred to these as “zombie” foreclosures.
The national average was 18 percent for the third quarter of the year.
Nevada in the third quarter had 2,046 foreclosures involving homes that had been vacated. That was 5 percent higher than the second quarter of 2014 but 30 percent below the third quarter of 2013.
“The most effective preventative vaccine for the blight caused by vacant, abandoned foreclosures has proven to be a short and efficient foreclosure process,” RealtyTrac vice president Daren Blomquist said.
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