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Pictures and Numbers

An unusual photo essay even for me. I did not have to drive far to get the pictures and they are not pretty pictures. They are pictures of dispair, and of urban decay. There are more pictures like this each month.

There are currently 1624 registered vacant building in St. Paul, MN. The number goes up every month, and many of them are in foreclosure. Of the 2009 single family homes currently on the market 716 or about 36% of them are in some stage of foreclosure. Many of the homes that are in some stage of foreclosure that are on the market are vacant but not registered , many do not have for sale signs in front of them .

The data used to determine how many homes are on the market in various stages of foreclosure came from the MLS. Since listings are not categorized as foreclosures much of the data had to be gone through manually looking for phrases like "bank owned", "corporate owned", or "subject to bank approval".

Banks can not sell real estate. They do not have the staff or the know how. My clients make good offers on the vacant properties and have to wait so long for a response that they move on. The homes remain vacant.

First time home buyers who would like to live in some of the vacant homes can not get financing for them. This is only the begining. It will get much worse before it gets better.

Now I have new neighbors in St. Paul who own property here but live far away. They are not responsible property owners. They are banks, they can't sell real estate. I watch as our housing stock decays under their ownership.

Also see The Man on the West Coast
When the Bank is the seller

Posted by Teresa Boardman on 02/14/2008 04:40 PM

Comments (65)

foreclosure

This post has been included in Minnesota Information Ramsey County, MN Information Saint Paul, MN Information

65 Comments on Pictures and Numbers

FEB

2008

Sadly, this isn't an isolated issue. The struggles buyers, sellers and real estate agents face with the banks can not be guaged for the general public to grasp.

Teresa.

What do you mean by "registered" as in "vacant but not registered"?

Is there some sort of registry for vacant homes??

Lenn

Teresa, I would say those pictures pretty much sum it up. Not good. Not good at all.

Lenn - we have rules about vacant properties. If I property needs repairs it can not be just left sitting vacant, it has to be registered with the city as a vacant property. I am not sure what the point is. The property is still vacant and just sits there. There are many vacant homes that are not registered and I don't think registration is required. So we really don't know how many vacant homes are in St. Paul.

Interesting about vacant homes needing to be registered in St. Paul. Any vacant buildings here in our L.A. inner cities soon become occupied by homeless folk of one sort or another.

If I could wave a magic wand, I would turn the clock back a few years, and undo the crazy price run-up that happened around here .... but then, of course, some investors" that made big $ on the run-up would hate me. :-)

There's some unique architecture in your homes that is just sitting there...I see it in my area too, and it's sad.

Teresa,

IT is sad, and it is important to note it as you are. The wake-up call is that these homes are EVERYWHERE in most cities, not just in certain areas.

Keep keeping it real!

Steve

I agree with your analysis of the difficulties concerning identifying foreclosures and making successfully offers to the banks that hold them. It is very frustrating.

Teresa -- I see so much of this in my area as well, and I'm afraid it is going to get worse before it gets better. . .

Banks have to get it together.We have the same problem where I am Teresa with Banks taking to long to respond to offers. Its their loss.Its hurts our cities. They have to come to the plate.

FEB

2008

The pictures speak a thousand words....

Hi Teresa - I saw this post on your other blog and thought it was quite powerful in the message it conveyed about foreclosures and bank-owned properties just sitting, begging for new owners. You are so right that "Banks cannot sell real estate" - no they can't. They can't even be bothered responding to the offers they get before the hopeful buyers get fed up waiting for a response and they just withdraw their offer and move on.

Ann

Took me a moment to figure out what decay meant since the homes look livable. To bad you couldnt help the banks with getting good people into livable homes, is there a window of opportunity there?

There is so much fall out from all of these foreclosures. I think it is unfortunate that these types of things are allowed to happen. I know the issues are complex, but somehow it seems it would be better working something out to let people keep their homes at lower rates. We have been lucky to have too much of this in New Hampshire.

I agree. It is going to get worse before it gets better. Before long we will probably see lenders being a lot more cooperative to prevent many more foreclosures.

This is sad, very sad

Luckily we don't have that problem here in Bellingham, but still a hassle dealing with banks, especially on short sales

This is sad, very sad

Teresa you are so right. Banks can't sell real estate. You would think that they would have figured out how to do it by now.

Sad yes but there is opportunity here, opportunity for profit, yes, but also opportunity for some good.

On a small scale, Im working with an investor now that sees a business in buying up properties like this, doing the work needed to make them livable and then selling them to the end user. He will carry the financing if they cant get a mortgage loan. He hopes to make a profit on the difference between the purchase price and sales price and on the spread between the interest he will be charged and the interest he charges the new home owner. Hes in the early stages of his due diligence , but hes looking at 27 new homes that represent part of the unsold inventory of a local builder

On a larger scale... I see the government creating an entity much like the Resolution Trust of the early 1990's to buy up the bad assets of the banks and sell them at auction... Call it a bailout if you will, but the Resolution Trust made money

Most of the banks that have foreclosed on properties here in St Petersburg have listed them with a agent and put them in the MLS and do respond reasonably quickly. It's the short sales that are in limbo - most buyers won't wait 3-4 weeks for a response on whether their offer is accepted.

It is very sad for these homeowners! Some banks in our area are listening to offers but it is a long and tedious procedure.

I worked most of the day on a short sale--the listing agent has no answers because the bank has yet to respond--deadlines come and go, and buyers move on. The banks continue to slow the absorption rate, and as a result inventory remains high and there is downward pressure on price. I believe the banks are so overwhelmed and understaffed with short sales they prefer them to become foreclosures and outsource them to agents.

How terribly sad. We need to all know that there are areas of country that are really affected so badly that it hurts to look at this photo essays like this. I am sure there are others.

Sharon - ours are on the MLS and represented by realtors. It is a slow process becasue the bank asset management departments are very slow. Short sales are the worst but foreclosures are also very slow. There are some exceptions but not many.

Teresa, I look at these homes and they seem to be crying for a family to make their rooms come alive. It's so pathetic, seeing home after home with those notices in the windows. I don't see many of them here in my area (Morris County, NJ). Not the preponderance that you see in other areas of the country. The short sales are mounting though. So frustrating how the *^#@# banks make EVERYONE WAIT for an acceptance!!!! WTH are they waiting for? Why such a long drag? All the wasted time just burys the homeowner deeper and frustrates the buyers to walk away. I have buyers who won't even touch a short sale because they don't want to waste time with their lives in limbo.

Teresa, the slideshow is a powerful reminder of how real this situation is for many families and individuals. Sometimes we can become numb to the news articles and negative headlines. This is reality!

Loooking at this sad parade of homes reminds me that behind each one is an equally sad story.

It is my understanding that the lenders are totally crushed under the weight of the foreclosures due to the large number of loans written in 2004-5-6. There is plenty of finger pointing to go around, even towards the realtors that helped "shoehorn" the buyers into properties they never should have qualified for in the first place. Sad to admit, but maybe even one or two of my own buyers fit that mold? Like it or not, everyone in the business today has sort of inherited this problem.

May I make a prediction? Based on what I have seen happen to office jobs and payroll and accounting jobs here in the midwest in the manufacturing sector, the job of handling the short sales will soon be outsourced by email and fax to other countries. There are highly educated people that speak flawless English, have a masters degree in finance and economics, and will work for considerably much less than the American workers that have already been displaced from thier jobs by lenders bankruptcies. Be prepared for the "new" asset managers and loss mitigators handling short sales. After all, to the lenders, it is just a matter of numbers and ratios and percentages.

Remember the tacky telephone service personnel when you tried to report a non working number? "What country are you calling about?"

I could do a show just like this for Henderson ... 1496 out of 3137 single-family listings are vacant, and 339 of the vacant homes are either short sales or foreclosures. We've seen some leveling off in total inventory, now we need to get the percentage of distressed properties a lot lower. And being labeled a declining market doesn't help with financing.

These homes look in fairly good shape. I could shoot 10,000 photos of empty homes in New Orleans. I guess I see them everyday and tend to get immune to them. Thanks for a good idea.

This problem is all across the country and two cities in my area have passed ordinances to force the banks to maintain the front lawnsand pools.

Teresa,

We have empty homes and homelessness. Why can't one problem be the solution for the other?

This is very sad. There must be something we can do to change this.

Ww could move a lot more of these foreclosed properties if the banks would respond sooner. The typical foreclosure buyer that is willing and able to wait is an investor. Sometimes that is not the best type of owner for the property. If only the banks would respond sooner.

Here, banks can & do sell their own REO's. most of them do not want to list.

Teresa - {Bob here} Indeed very sad and scary. Hopefully something will turn around for these unfortunate people. Our hearts go out to them and there lost dreams. Thanking the powers that be that this hasn't happened here so far and hopefully wont. Most of these homes looked like they were once very pretty homes and still could be one day. This is an incredible photo essay you have done and I've always enjoyed you pics but sad to say these are not my fav's because of the contente. Thanks for the wakeup call to everyone.

I was thinking that some of those weren't that bad... When I used to live up there I remember a few neighborhoods that were quite a bit worse.

But, the main point I wanted to make was this...

Right now, I know how bad the situation is with foreclosures and the lack of ability on the part of the banks to get timely information back to potential buyers. I have experienced the 30 day answers... and all of that junk. But, I will make a bold prediction... it will change, and it will change sooner rather than later. First time buyer programs will find their way back into the market in the next year, and banks will figure out how to deal with the backlog. It will probably start with intermediaries buying bulk properties from them... and that is already happening. And, the intermediaries KNOW that to get their money out, they have to roll the properties.

I always notice that people assume that the way it is, is the way it will be. And, it never is.

This is sad, but is happening all over. Agree with you that it will be worse before it gets better.

It's real simple, the banks are stalling, all the foreclosures/short sales, so they don't show a bigger write down or lose in any given month. They have a number they feel they can get away with per month, I guess its their way of cooking the books. To tell you the truth, I think if they didn't do it that way, I think we would be in worse shape. The following is just a little observation of mine, but I think it will tie in with Teresa's post.

I've been living in Florida for the past 28 years, when I first moved here, I said where's all the industry? What I found out is, Florida for the most part is a warehouse state, not much in the way of malfunctioning, but it's a terminal for products made else where. Well what I hear from friends in other parts of the county and from the news, the rest of the county has caught up with Florida. This county is becoming 1 big terminal for products made else where. We're losing or lost so many Blue Collar jobs, that, it takes a lot longer for the economy to recover, and not everyone is White Collar material. So you say, Mike how does this relate to the housing market? Well I'll tell you, with out good paying(not a $10.00 an hour folk lift job in a warehouse) Blue Collar jobs, those homes Teresa posted will be empty for a long time.

Just My Midnite Rant

Mike

FEB

2008

This is just an insomniac ramble...but what if an organization like Habitat for Humanity was able to buy up properties and fix them up for the working poor and people who remain homeless from disasters like Katrina? This is such a waste! Empty homes the banks are just letting rot and hard-working (but poor) people in need of a home. There was a report tonight about Katrina victims living in trailers that had toxic fumes..... It's actually socially irresponsible to allow something like this to continue. We are fortunate that we don't have this type of foreclosure activity around here. Hopefully - it will stay that way!

I like Ruthmarie's idea. Seems like a program like that would be doubly rewarding to the community.

thanks for all the comments. I know that we are facing these problems nation wide. I don't have anything more to say on the topic but I look forward to testifying at a hearing in a couple of weeks. I will have the opportunity to explain the foreclosure process to our elected officials. . . there is a need for education.

Ruthmarie - I just saw you comment. I have actually talked to several non-profits about rehabbing properties including habitat for humanity and hearts and hammers. We shall see.

Good for you Teresa - it just seems like a crime that you have homeless working people and homes boarded up with no occupants. I figured you were ahead of the curve.

Ruthmarie - I have been some what upset by the situation for many months and I have made many phone calls and attended meetings. People come to me, they want to buy houses, there are houses they can buy but it just isn't working out. If I can get one family into a vacant house I will consider it a major accomplishment. I have been very vocal about the problems and have been contacting our local elected officials on a regular basis. It seems that various organizations are working on it but they don't share information with others. We need to all work together. I sit on the boards of non-profits and am getting them involved as well. I am also working on some free education programs for consumers that can be given at the community center where I sit on the board.

Teresa, it sounds like you are working incredibly hard to right this wrong. Working with your local officials and coordinating existing and planned efforts sounds like the best way to proceed. I am on several non-profit boards as well and know this isn't an easy time for many. The homes you pictured all look like they have so much potential. Is there some way all of us at AR could get involved?

Pictures speak of a thousand families displaced by lost hopes.

Teresa-it is a sad state of today's market to see so many properties sitting and deteriorating while the banks decide what to do. I posted yesterday about the how this is now beginning to hurt other homes in the neighborhood as well. As a result entire areas are in decline and trying to get someone to step up to the plate and take responsibility is hard. We have had 100's of people coming to community meetings with local officials trying to find a solution which is rare in our area where most people are always "to busy" to get involved.

It's really a depressing situation and one that probably won't be resolved soon.

Not the best why to start off my day. That is so depressing. All of those families....

"First time home buyers who would like to live in some of the vacant homes can not get financing for them."

And many of those 1st time buyers who can get financing soon realize that they will not be able to afford the after purchase costs of repairs and upgrades necessary to make many of these homes livable once again.

Here in Northern Virginia just 40 miles from the nation's capital we have about 5500 active listings in the county. Of these only 400 are resale the others are short sale or foreclosures/. We expect a 756% increase in the number of foreclosures this year in Virginia.

Nigel

Wow - pretty stiff numbers for your area. We have some issues in San Diego County, but they are primarily concentrated in a few areas.

Teresa, I am going to have to check out those slide tools

www.gregorygarver.com

I know the feeling. There are a lot of those here. It is truly sad for the homes, the homeowners, and the area!

Teresa: Unfortunately I would not have a difficult time at all finding homes in our area similar to yours. It is such a sad situation...so many good people out there without homes.

The Katrina thing is a bad idea. Those that are still displaced by Katrina are choosing to be that way. Giving the houses away is not a good plan. Getting appropriate and responsible buyers into the houses is what is needed.

I have said it before on other blog posts. The solution to our problem would be to raise the minimum wage and give everyone a salary boost. It seems that the prices of services, taxes, utilities, insurance, vehicles, and of course houses have gone up but no one gets a raise to make up for the increases. Jobs that paid more are now going overseas. There is an active blog that posted last week about title searches being outsourced to India. That is what put me out of the title searching business so I became a Realtor. I was getting $75.00 per search until someone in India could to the title search for $6.00 during our nightime while I had to sleep. We are shooting ourselves in the foot. Soon no one will be able to afford any other luxuries because they have to pay their mortgages.

FEB

2008

I agree, it's going to get worse before it gets better. The lenders really stopped the creative financing around July-October of 07'. So we still have loans from 05', 06', and 07', to reset.

FEB

2008

T, did you see that Dan Bostram, (He's your council member, isn't he?) is proposing a change to the St. Paul vacant building ordinance? He is proposing that title cannot transfer to a new owner on registered vacant buildings until the building gets a certificate of occupancy or compliance from the City. Talk about buildings sitting on the market and decaying even more! The public hearing is Wednesday (2/20/08) at 5:30 PM at city hall. I hope you'll be there! The way the change has been presented by SPAAR, it will literally put rehabbers (the primary buyers of fixer-uppers) out of business unless there's a work-a-round.

FEB

2008

Donna,

You are right! I was laid off because half of our underwriting was outsourced to India! Hopefully the amount of companies closing will encourage them to spend some money in the US! I'll be working again soon, but it's still frustrating that they are sending good jobs over seas.

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