255,129 Foreclosed Homes Went Unsold In 2007, And Are Now Owned By Lenders

Foreclosure tracking firm RealtyTrac has been delivering lots of bad news this year, not least of which is some sobering numbers on Real Estate Owned properties or REOs. An REO is what happens when a home cannot be sold at auction and becomes the property of the lender.

These are bad because they indicate that the real estate market cannot absorb the number of foreclosures that are coming in. And there have been a lot of them. 255,129, according to RealtyTrac’s records.

Just how many homes are we talking about?

255,129 is more housing units than the entire city of New Orleans.

255,129 is enough housing to hold about 790,900 people, according to the average family size reported in the 2000 U.S. Census.

If those 790,900 people formed a city, “Bank Repossessionville” would be the 13th largest city in the U.S. Right in between Jacksonville, Florida and Indianapolis, Indiana.

The 13,674 houses owned by just one lender, Countrywide, are valued at 2,867,767,788.

So, if you’re in the market for a home, you might want to search for some REOs that no one else wants. There are lots to choose from, particularly in California, and there will surely be more to come.

RealtyTrac
(Photo:tlindenbaum)

Comments

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  1. holocron says:

    Great, so how does one find them?

  2. vex says:

    Not very accurate. There are a LOT of homes for sale/bank owned in my neighborhood that are not listed here.

  3. MENDOZA!!!!! says:

    [best Nelson Muntz voice]
    Ha-ha!

  4. MENDOZA!!!!! says:

    @Cassifras: and I mean that more in a “finally lenders are feeling the pinch” sort of way. not so much about people getting foreclosed on, and what not. that would be rude

  5. anatak says:

    and whats funny is that banks aren’t in the business of owning houses.

  6. clickertrainer says:

    I thought there was something really wrong with that photo. Then it hit me — snow. I miss that.

  7. vdestro says:

    I noticed the link to RealtyTrac. Be wary if anyone should think of signing up to use their services. Googling for reviews on their service turn up some questionable things. For example:

    [www.oregonherald.com]

  8. DadCooks says:

    First, I have no sympathy for the “lenders” as they will survive. They knew full well that they were taking a chance with these risky loans (long story here).

    I have looked into somes REOs in this area. The “lenders” are still trying to get full price. People don’t even show up for the auctions as the “lenders” won’t budge from the way too high minimum bid. Meanwhile the properties continue to deteriorate–just wait until the pipes burst in these homes this winter.

  9. Um, I think I talked to my realtor friend about this a few years ago, and I -think- what she told me is that if you buy one of these houses that are like $6,000, you’re also claiming responsibility for whatever debts the owner had when the house is reposessed, so if they had a bunch of mortgages, or the house is wrecked on the inside, you take legal responsibility that you may not be aware of when you bought the house.

  10. jrdnjstn78 says:

    yahoo.com just started a service sometime this year or last year listing homes that are going into foreclosure. The only catch is when you want to look at detailed pictures I think you have to register at some real estate site.

  11. kellyhelene says:

    A judge in Buffalo was refusing to allow lenders to forclose on any properties if they had outstanding fines or judgements against them relating to properties they already owned. A good plan, since it isn’t as though the lenders are sending someone out to mow lawns, make sure the windows aren’t broken, and other issues which can lead to spreading blight in a neighborhood.

  12. stinerman says:

    Go Ohio! We have the lowest average asking price in the nation at $58,795. We don’t have any jobs, but we sure have cheap houses!

  13. stinerman says:

    @kellyhelene:
    Where I live there is a house for sale just down the road that regularly has the front door wide open into the foyer. I believe the door was damaged during a burglary quite awhile ago and the bank decided it wasn’t worth fixing.

  14. csdiego says:

    What I don’t get is why the prices aren’t falling on all this unsold property. Is there some tax writeoff or something that’s more valuable than the actual sale price they could get, even if it’s half or less of the last sale price? I know the neighbors don’t want property values falling that much, but I don’t see why the banks should care.

  15. TechnoDestructo says:

    @csdiego:

    With interest rates pretty low right now, they could stand to lose more in the decline in property values than they’d lose by not having that money invested for the extra time they’d take to sell them.

    I mean, if they are deliberately slowing the sales so as to not torpedo housing prices.

  16. malusman says:

    @stinerman:
    I have the same situation in my neighborhood; 2 doors down from me, there is a house that’s been abandoned for about a year and the front door is often wide open. In fact, someone tried to steal the gas dryer from the house and caused a gas leak. Luckily, someone came out to shut off the gas before any damage was done.

  17. Sudonum says:

    I read an article in the LA Times a while back about the issue of lenders waiting too long to drop the price to reflect the new market realities. In some cases the banks are so upside down in the house (like the home owner used to be before they walked away) that they feel they have to get at least what is owed on it in order to minimize their loss. Then when they do drop the price, it’s still not enough to get in front of the pricing curve.

  18. GearheadGeek says:

    @csdiego: In many markets, they banks may have more in the houses than they’re worth, so while they’d be willing to sell the house for the loan value, buyers aren’t willing to pay that much. They also sometimes get stuck down bureaucratic rat-holes… a friend is trying to buy a foreclosed house that’s been bank-owned for a year now, and he made an offer about 3 weeks ago. They just haven’t gotten around to accepting or rejecting his offer yet! It was listed for sale shortly after the bank took ownership (a year or so ago) and some problem with an offer at that time tied the house up for months.

  19. csdiego says:

    So, in other words, lenders are unwilling to let go of the bubble mentality and the hope that prices will go back up as high as they were…? Because that could take a decade. Or do they plan to go into the landlord business and rent everything out?

  20. Spiny Norman says:

    @csdiego: One reason the banks aren’t just taking the best cash offer on foreclosed houses is that they would then have to write off the “supposed” value of the asset against the profit on this year.

  21. mmcnary says:

    When we were looking last year, we found a bank-owned property that was priced below its appraised value. We tried to buy it, but the bank was very slow in responding to our bids, and would only drop the price $500 or so at a time. It still stands empty, and the asking price is our final offer… Too bad we couldn’t wait for the bank to get its head out. We bought a house about 3 blocks away.