In this particular time in the history of the United States, as regards the residential housing market, things are completely out of balance. Of course there have always been good times and bad times happening in local areas, that’s nothing new. For example, factory closings have decimated small towns where they were the only big employer, and no jobs meant no way to pay mortgages. But we are seeing a similar situation all over the country today, not just in isolated areas. Municipalities that are prosperous are far fewer than areas that are suffering.
There are large numbers of people trying to sell a home in most cities. And higher-priced houses for sale seem to outnumber cheaper houses for sale. I haven’t studied the statistics closely, but maybe it’s simply that more people can afford the cheaper houses so they sell faster. You’ve probably noticed that it can take months or even years to sell a house now, in spite of several price reductions.
I think that one trend in the market now is the enormous number of houses in the foreclosure process that are listed for sale. For a variety of reasons, mortgage lenders extended loans unwisely that have caused homeowners to lose their homes and lenders to lose their hope of profit. Poor mortgage lending practices have certainly contributed to the state of our economy, as well as the sad fact that people who lose their jobs are usually unable to make their mortgage payments. Driving along any street in America you’ll see more than one house for sale, and some are vacant houses.
Those are often the foreclosures. It’s not practical for lenders to lease houses that are vacant because it makes them difficult to sell. But, instead of maintaining an inventory of vacant houses some lenders have chosen to structure legal agreements with the former property owners to live in the house and pay rent. It’s not an ideal situation for either the lender or the former owner, now tenant, but at least the house is not so vulnerable to loss and the people have a place to live.
The whole marketplace is full of houses that have awkward situations and long stories attached. So, whenever you see vacant houses for sale you can safely assume that it’s a foreclosure property and that the seller is very motivated to sell. If you are selling a house in the same neighborhood, you have to remember that you are competing with all these foreclosures, too.