Wow – I never expected that my post about Banks Killing America’s Neighborhoods would attract so many readers. I want to thank Daniel Roth for highlighting my thoughts on LinkedIn. I also really appreciate all the comments that were left here on my blog and on the LinkedIn Residential Real Estate discussion board. I’ll try to respond to a few comments here but I may need a few separate replies to cover all the topics.
1. Several people pointed out that if the banks sold everything at once it would, in fact, drive down prices further. Of course it would (although I don’t think it would cut prices in half as someone suggested). I didn’t mean to argue otherwise although I think there’s so much inventory being held up that it would take a long time to push it through whether it was all listed at once or not. But, when banks hold on to these properties it is definitely causing the problems I mentioned with deteriorating structures and crime. I’ve seen it first-hand. So the banks are going to lose money either way – whether they hold on or sell quickly. Frankly, I think they’d be far better off selling before the houses in their inventory are damaged due to neglect or vandalism. When a house sits empty for over a year people notice and some will take advantage, often to the detriment of the property.