Bank Foreclosed Houses in Georgia Subdivisions Rising

by on States

Banks are overwhelmed by the number of vacant lots and unfinished houses in subdivisions in Georgia. According to industry expert, the foreclosure crisis not only affected individual houses but entire subdivision developments.

Many idled subdivisions, with vacant lots and unfinished houses, dotted the landscape of metro Atlanta. However, they are most prevalent in suburban areas where developers are having the toughest time selling them, with some houses placed on the market for sale for months without a single interesting offer.

Bank foreclosed houses in these subdivisions are rising and huge losses are incurred by lenders as they sell them at significantly reduced prices. Already, 16 banks in Georgia have failed because of huge losses in residential real estate market. And dozens of banks are struggling to survive the current market condition.

Meanwhile, residents who purchased properties in these distressed subdivisions are seeing their property values plummet, with some still waiting for agreed amenities to be constructed, including swimming pools and clubhouses.

According to industry experts, the housing market in Georgia is beyond sluggish. They added that the market’s major problem is the sheer number of vacant housing lots, totaling 150,000, representing over 10-year’s supply.

Adding to the problem is the drastic decline in the median home sale price to $30,000 from $57,000 during the peak of the housing market in 2007.

Experts said that the situation is expected to get worst because there are just too many vacant lots and not enough demand. Areas hardest hit by the volume of vacant lots and bank foreclosed homes and few sales are the counties of Jackson, Newton and Bartow.

In the upscale subdivision of WaterLace in south Fayette County, construction had stopped after only a few houses were built. The original plan for the 600-acre subdivision was for the construction of 400 properties. But the development was closed last year, leaving the subdivision a ghost town.

When or who will finish the project remains a big question as its developer, Stephen Macauley filed for bankruptcy. Security Bank of Macon, the project’s lender, attempted to sell the subdivision through an Atlanta-based real estate company. However, Security Bank also failed leaving the Federal Deposit Insurance Corp. to take over the task of selling the properties.

For the meantime, to prevent incurring more losses, banks are unloading properties in huge quantities with prices dropping to as low as 30 centavos on the dollar.