Posts (RSS)Commercial Foreclosures Crowd REO Property Listings
The first seven months of this year saw a dramatic increase in the number of commercial foreclosures on REO property listings. In Denton County, commercial foreclosures jumped by 156 percent from January to July, compared with 66 for the same period the previous year.
REO property listings are swamped with foreclosed office buildings, retail centers, apartment buildings and industrial buildings. Industry experts noted that Denton County experienced tremendous foreclosure increase in four commercial property types, with some going from zero postings the previous year to a significant gain this year.
Experts noted that some commercial foreclosure postings involved small and nondescript properties that were not in prime locations. They pointed out that commercial distressed foreclosures in Denton County were not that remarkable compared to other Texas counties, including Tarrant and Dallas.
However, the pace of foreclosure in Denton is faster than the other counties, experts explained.
For the first seven months of this year, the number of commercial foreclosures on Collin County?s REO property listings rose by 76 percent. According to industry experts, both Denton County and Collin County experienced significant increases in residential and commercial real estate markets for the last 10 years. That growth, they added, made these two counties the biggest contributors in the state?s foreclosure problem.
Meanwhile, REO property listings of undeveloped land properties showed that lending institutions have become selective in their issuance of loans for new development projects. Because of this, many development projects were delayed or stopped because land owners could no longer afford to finance these projects.
Two decades ago, majority of commercial foreclosures were prime real properties. Today, industry experts noted that an increasing number of properties owned by small businesses were on REO property listings.
On the other hand, note-purchasing of commercial repo property foreclosures increased this year. Results of a market survey showed that an average buyer could purchase these commercial and residential foreclosures for about 60 centavos on the dollar.
Industry experts agree that in order to control foreclosure, there is a need to control first the rising unemployment rate, which they do not expect to happen anytime soon.
REO property listings from January to July 2009 showed 13 apartment buildings, 8 office buildings, 25 retail centers, 5 industrial buildings and 68 land properties.