How Do You Fix the Housing Market? Bulldoze It
CNBC.com News Editor
Most people will agree that the math on the housing market is out of whack: More homes were built in the past few decades than there were people who could afford them.
If this overcalculation was made by a person with a shopping addiction, the answer would be simple: Return some of the merchandise. If it were made by the U.S. government, we all know the answer — raise the limit on your credit card.
But when the overcalculation involves actual, physical homes that are cemented into the ground, cost money to maintain and drive down the value of surrounding homes, what can you do?
Banks have tried giving away some foreclosed homes to organizations willing to repurpose them.
But with more than 1.5 million homes in some state of foreclosure in this country, banks are getting so desperate, they’ve just decided to get out the bulldozer and knock them down. Hit the reset button. Start over.
When Detroit Mayor Dave Bing proposed such a demolition plan a year and a half ago, people thought it was radical idea. Now, with home prices at 2002 levels and still falling, it doesn’t seem like such a radical idea—it seems practical.
Bank of America spent $1 million to knock down 100 homes in Detroit and donate the land to an organization that would repurpose it for "green space, urban farming or redevelopment." Bank of America and Wells Fargo have also donated dozens of homesin Cleveland and helped pay for their demolition, the Cleveland Plain Dealer reports. JPMorgan , Citigroup and Fannie Mae are apparently also getting out the bulldozers, according to the Atlantic.
The bulldozers have revved up a predictable amount of outrage but wait until home prices start to rise again—I’ll bet there will be a lot less outrage then.
The $15 House. It pays to know the law: A man in Texas took possession of a house for just $15 based on Texas's obscure "adverse possession" law after the prior owner just walked away. The neighbors gave him a hard time, and some even called the police, but all the police did was disperse the crowdto get them to stop harassing the man, who was just following the law.
Buy the Whole Dang Town. Former rodeo star Twila Merrill owns much of Scenic, South Dakota, but this cowgirl is getting ready to hang up her hat and she's put the whole dang town up for sale for the bargain price of $799,000. Now that's a rootin', tootin' good deal!