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Developed Lot/Land Foreclosures Rising Rapidly, Banks Struggle for a Strategy

July 3, 2008

Analysis of:Unfinished subdivisions grinding to a halt | www.azcentral.com

While banks are selling foreclosed homes in the Atlanta market for close to 90% of the loan amount, their vacant lots and land are not selling at all.  Builders and developers that have been paying interest for months are running out (or have run out) of cash.  Banks are struggling to find a strategy to handle what many of them expect to be an avalanche of foreclosures on vacant developed lots.

How to predict recovery time for your market

May 19, 2008

Analysis of:Vacancies Increase--not rentals...there are 2.3M empty homes | www.detnews.com

First, let me state the obvious:  recovery times will depend on which market you are talking about.  If you narrow down the question, I believe that you can make some reasonable predictions about the specific market you are analyzing.  While none of us has a crystal ball, knowledge of the supply of product in your market and the history of the range of demand for that product can give you the basis for a recovery time estimate.   One method for this would be to take the Commerce Department vacancy estimate for the specific market you are looking at (they have data for the 75 largest U.S. markets).  You can use the historical figure of 1.7% as the measure of a recovered market where supply and demand are in balance again.  The difference in the percentage vacant in your market and the 1.7% represents how far your market has to go to get back into balance.

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