Vacant Homes for Sale: Good News or Bad News?
From the first to second quarter of 2012, the nation experienced a dip in the number of vacant homes for sale. In New Jersey, though, the number increased. Empty for-sale units can be good news for some New Jersey residents, and bad news for others, depending on one’s current living situation.
Some homes on the market are vacant because the owners moved without yet finding a buyer. Short sales and foreclosures are also a strong contributor to the trend, which triggers the expectation that New Jersey’s lot of empty for-sale housing units will continue to grow in the near future. Many homeowners going through the foreclosure process over the past couple of years were offered a break from the action when the federal government stepped in to address “robo-signing” foreclosure processing. Earlier this year, a $25 billion settlement was made between five mortgage lenders and 49 states, including New Jersey.
“(The number of vacant homes) is likely to increase at least one more quarter and maybe two,” said Michael Busler, a fellow at the William J. Hughes Center for Public Policy at Richard Stockton College. “All of the foreclosure actions that were stalled back in 2010 and 2011 have now been able to continue.”
Busler said the continuing trend can only be offset if the demand in housing continues to recover.
He continued, “With consumers starting to feel that prices have bottomed out and may even inch up a bit, perhaps more people will enter the housing market and increase demand.”
A vacant home, especially after months with no upkeep, can cast a dark shadow on the properties surrounding it. One empty property could depress the value of several others. Most potential homeowners look at a neighborhood as a whole when making a decision on where to live. One or more vacant properties can take a street’s reputation from great to decent.
However, for people looking to buy, some vacant for-sale homes can provide a great opportunity. Homes left empty by foreclosure or short sale go into the hands of a bank – a bank that wants to get the home off of its balance sheet.
Busler explained, “The longer the banks have held the homes, the more likely they are to accept a figure less than what they’re asking for, and even less than what’s owed.”
Busler said there have been some cases in which buyers were able to snag homes at 10-20% below the asking price.
Overall, an increased number of homes with no one inside is a solid sign of a struggling economy. New Jersey’s unemployment rate is inching closer to 10%, and reversing that number may be key to solving the housing and other economic issues.