Local Residential Housing Crisis
Background
Foreclosures are reaching all time highs in many areas that were traditionally stable. The Dallas Morning News reports more than 90,000 vacant home sites available for buyers to purchase - many in far suburban areas of Dallas-Fort Worth. The economy has affected many industries including housing and real estate. People are desperately looking to rid themselves of any decreasing assets. Thousands of foreclosure signs are being put up in front of homes around the Unites States. So is this a buyer’s market? What are potential buyers doing? Are people using this as an opportunity to buy or should buyers wait for the market to stabilize?
Local Foreclosures
According to Steve Brown of The Dallas Morning News, “Home foreclosure filing in the Dallas-Fort Worth area has risen to a record high, with more than 5,500 properties facing forced sale next month. And the number of houses threatened with foreclosure in May rose 25 percent from a year earlier, breaking all previous records, according to statistics released Thursday by Addison-based Foreclosure Listing Service.” Most of these foreclosures are due to the fallout of the economy, resulting in homeowners being unable to pay their mortgage.
Homeowners
The biggest problem lies in the fact that local home owners cannot get rid of these toxic assets. Many sellers in this situation are desperately posting their homes for sale, but no one is responding. “They have no choice but to continue posting the properties for foreclosure while they negotiate with the borrowers,” says George Roddy, Foreclosure Listing Service president. Most of the current foreclosure postings are repeats, meaning they have been posted and heard no responses so they are forced to post again.
Builders
With the struggle to sell the homes that are currently owned, the market is flooded with homes and builders are having a difficult time reducing their inventory. Much of the home construction has been cut back due to the lack of available financing. There are numerous empty lots that are ready to be developed, but there is no financing to fund them. “Home starts have declined almost 67 percent, while the lot supply has fallen only 2 percent,” said local housing analyst Ted Wilson.
Local Investors
While the housing prices are low, wouldn’t it be best to invest now and take advantage of the low prices? Some would tell you yes. Others think waiting it out is an option that may prove to be positive in the near future. Larry Taylor is a businessman that is sure that this is a time to take advantage of the current housing situation. He has recently formed a partnership with an affiliate of Starwood Hotels and Resorts to buy land and lots in the DFW area. “We did this in the late 80’s, when we bought tons of property from the FDIC and RTC.” They would buy these cheap properties and fix them up to turn a profit. According to The Dallas Morning News, “
Conclusion
The bust in real estate in the DF-W area has definitely taken it toll on the local citizens, but it may ultimately create more opportunity for investors and stabilize the economy in the future. If investors have the courage to invest funds in houses and wait, with time these investments will stimulate the economy by providing affordable homes.
Works Cited
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijAap5OBWfi2QIQ7ciDB8e60w898g7F-9VEIpySfp53JzL04HwCJX4zYiRMx-FMFYjBcKoZh6s-EDzWkVLYu5kZhQMEuYgjesO-jIZosCx7ZfVmDI_D15LT4qou5n1OSIG2bh4-Wm-YLAz/s400/April+2008+foreclosures+chart.jpg “US foreclosures chart picture”
http://www.dallasnews.com/sharedcontent/dws/classifieds/news/homecenter/realestate/stories/041609dnmetforeclosure.dff07822.html “HIGH FORECLOSURES picture"
http://blogs.trb.com/features/family/parenting/blog/decision-making.jpg “investor search picture”
“Filings jump to record,” The Dallas Morning News, April 17, 2009, p. 1D.
“What’s on investors’ minds? Lots!,” The
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