It's Crazy Time in Real Estate

It's Crazy Time in Real Estate

by Mark Walters

The current tsunami in real estate foreclosures across the US has turned the housing market into something akin to a mad circus.

There are over two million vacant homes littering the landscape. Most of those are owned by foreclosing banks. There are just too many for the lenders who own them to keep them protected, inspected and free from vandalism. Cities don't have the manpower or budgets to provide upkeep, so it gets crazy

You've heard of the "midnight auto supply", right. That's where someone steals parts off of cars to resell or use on their own vehicles. The boom in foreclosures has created the "midnight Home Depot". Many of those vacant homes are broken into and stripped of everything that can be resold.

One enterprising man in Atlanta was nabbed by the cops when they learned he was building a new house entirely of materials he had stolen from vacant homes. If he had gotten away with it he could have made a fortune on the "get rich in real estate" seminar circuit.

Drug dealers take over vacant homes in some areas and turn them in crack houses and other undesirable uses. There are even reports from some cities that young people find an unoccupied home for weekend "raves" - wild parties that some times go on for a few days.

This surplus of homes has also caused a few unscrupulous folks to jump-start the old "home for sale cheap" con. This baby works great because with so many foreclosed homes sitting vacant there is no one to keep an eye on them. That means the bad guys can target a vacant home and break in. They install a new front and backdoor lock set so they have keys to the home.

Next they put a for sale sign in the front yard and a classified ad on Craigslist: "Home For Sale. Owner needs fast sale, bad credit OK. $5,000 down, will help with financing."

What do you think happens next? You guessed it. They collect $5,000 from as many innocent people as possible and then quickly move on to another town to do it all over again.

There are other unexpected consequences. For example: The city of Flint, Michigan has a declining population, but they have been forced to add firefighters and ladder trucks because of an increase in fires. It is reported that up to 90 percent of fires start in homes where no one lives.

In one neighborhood a vagrant set up house keeping in a boarded-up home by moving in a bed, a bureau, and other furniture. He eventually started a fire that nearly burned the house down,

There is no end of the housing crisis in sight. The proliferation of urban "ghost towns" of vacant houses is resulting in a costly crush of weeds, trash, and dereliction on that equals that of the Great Depression.

Pity the poor investor who bought investment property at the peak of the boom with the hope of flipping it for quick profit. They are now upside down and adding to the foreclosure problem.

Don't let anyone convince you that now is the time to buy real estate. The US economy is in bad shape and until it begins to recover buying property will be a dangerous investment.