Developers Turning to Foreclosed Houses to Tide Over Recession Days

June 10th, 2009 | Tags: Foreclosed Houses

foreclosed-porperties

Developers are an enterprising lot – not taking things lying down they have turned to foreclosed properties to tide over recession days. It is reminiscent of the old adage – ‘If you cannot beat them then join them.’ Today it seems for some this is working.

Builder.com is a site on the Internet that has been tracking the bust of the housing boom. It is not focusing on those local developers who have downed shutters totally but on firms like Kirk Home that are trying to swim upstream going against the tide and carving a niche for themselves under the changed circumstances. Spokespersons of National Association of Home Builders told reporters that those who continued to cling on to business have come out on top proving their mettle.

In the Chicago urban region the builders are now engaged in important home renovation jobs dealing with individuals. Some developers are purchasing the foreclosed houses and trying to put these back in the market after doing the necessary repairs. They are also completing the uncompleted units lying heavily on the banks by working with the lenders.

Nearly six months previously Hoffman Estates (based in Lakewood Homes) teamed up with lenders to give a new look to stagnating localities. Chris Shaxted of the firm said, “It’s not very profitable. It’s kind of busy work. Banks really aren’t allowed to be builders. When we helped them with these projects, it was ‘we’ve got two houses that are almost complete, can you finish these up?” Today the company is working in tandem with the banks sorting out the huge pile up of foreclosed homes that become REO’s. The idea is to fix up these units to give them an appearance of being habitable and then to sell them or rent them out until the market recovers.

Looking through the eyes of builders it seems a contradictory exercise to fix up foreclosed houses to compete with non-foreclosed units that are not selling. But since the former are selling it translates into good business to do what the market dictates – make foreclosed houses attractive and sell them.

A survey of consumer interest by Trulia and RealtyTrac noted that interest in foreclosed houses have shot up. Since November 2008 the interest has increased from 47% to 55% although the consumers continue to worry about hidden costs.

Experts feel that the key to the housing crisis are the tenants. It is they who should be persuaded to become buyers. The survey showed that 68% of them were keen to do so.