Foreclosure Property Listings in Utah Include Empty Lots
Salt Lake County in Utah is dotted with almost 6,000 empty single-family subdivision lots. These lots have been vacant for a long time now despite improvements made on the area such as utilities, sidewalks and roads. The only thing missing are homes and residents.
Vacant subdivision lots totaling 12,000 were also reported in the counties of Davis and Utah. According to industry analysts, these vacant subdivision lots were acquired and improved by real estate developers who were hoping to earn huge profits in the once hot market of Utah.
But the planned development on the overpriced properties fizzled out after the housing market collapse in 2007. Developers found themselves unable to sell the subdivision lots and therefore not having enough cash to pay their bank loans. Many of these properties were placed on foreclosure property listings.
The subdivision lots are being offered for sale in groups, with discounted prices from 30 to 50 percent from the original sale price during the peak of the real estate market in 2007 and 2006.
Industry analysts explained that subdivision lots are one of the properties severely affected by the recession and foreclosure because a company that purchase a group of land still has to wait several years to recover its investment. Therefore, for a deal to be worthwhile, prices should be attractively low.
Another factor that hinders land sales is the reluctance of many banks to provide financing to land purchases. Analysts said that banks, learning their lessons from the residential market collapse, are now careful on where they put their money and most of them are shying away from investments that they deem are too risky.
Analysts added that few cash buyers are interested in purchasing raw land. They said that the lack of financing has limited the available number of potential buyers for raw land.
A raw lot that used to be sold at $300,000 to developers who built luxury houses on it will be lucky enough to get an offer of $150,000 today. This is another problem confronting the real estate market. Foreclosure houses and distressed properties are included in appraisals which lower property values.
Industry analysts said that recovery in the residential real estate market is far from coming because of challenges facing Utah, foremost of them is the languishing economy, rising unemployment and foreclosure rates.
