Some banks start demolishing unsaleable homes

I remember hearing someone say a while back that the American real estate crisis will be near the end when we start seeing homes being demolished. Although very small and in the early stages, it seems that it is starting to happen (h/t The Atlantic):
Bank of America Corp. (BAC), faced with a glut of foreclosed and abandoned houses it can’t sell, has a new tool to get rid of the most decrepit ones: a bulldozer.

The biggest U.S. mortgage servicer will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property. The bank has similar plans in Detroit and Chicago, with more cities to come, and Wells Fargo & Co. (WFC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Fannie Mae are conducting or considering their own programs.

The number of homes in question for demolishion is negligible but, nevertheless, it does indicate that inventory is being taken off the market.

Comments

  1. jrmAugust 1, 2011 at 5:17 PM

    After having seen shipowners doing the same, I was wondering if it could happen to housing as well.

    ReplyDelete
  2. Sivaram VAugust 1, 2011 at 5:49 PM

    Apparently it happened during the Savings & Loan crisis in the early 90's as well (although the housing bubble wasn't that big back then). I'm sure it helps out the neighbourhoods so it is probably a good move overall. Of course, it would have been better if so many homes weren't built in the first place.

    ReplyDelete
  3. FishysmommyAugust 2, 2011 at 6:54 AM

    But how does one decide that the property really is undesirable. Was no one really willing to buy it, even for a few hundred dollars?

    Http://6000loaves.blogspot.com

    ReplyDelete

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