The New Real Estate Owner
The current decline in the housing market and the collapse of the subprime market has changed the face of the homeowner. As more and more foreclosures occur, lenders and investors like Citigroup, Morgan Stanley, Merrill Lynch, Lehman Brothers and JPMorgan Chase are becoming the new owners are large chunks for real estate across the country.
According to the FDIC, the value of U.S. homes held by commercial banks swelled 53% nationwide to $2.3 billion at the end of March, the highest since 1992, from $1.5 billion a year earlier.
The next question is will these new home owners maintain the properties and sit on them until the market improves or will they dump and run at whatever price someone is willing to offer them? It will be a potentially expensive outcome no matter how you cut it.