Although not a new idea, placing renters in vacant foreclosed properties seems like the perfect solution to help ease the housing market woes. So why aren’t lenders jumping all over this idea?

Although I could not find an exact number, the number of bank-owned properties across the country is surely astounding, and continues to grow. Here in San Diego county, as of the time of this blog, there are 852 properties owned by banks that are listed on the MLS. Keep in mind that there are MANY more that are not listed yet. Other areas that were hit hardest by the housing crisis, like Las Vegas and Phoenix, surely have higher numbers. While many foresee a future tidal wave of foreclosures, others argue that it will never happen, as it would literally decimate the already pressured housing market.

In some areas, like here in San Diego county, home sales seem to be rising, albeit slightly, but it is a good sign. There are actually lots of buyers out there right now, and in April there were an unprecedented number of homes that went into escrow (due in large part to the federal and state tax credits).

Sellers are realizing that price is critical right now. Gone are the days of overpricing your home. Buyers shy away from overpriced listings, as they assume the seller will not be willing to negotiate down to market value. Market value is KEY, considering the difficulty of obtaining loans and getting appraisals these days.

As for the foreclosure dilemma, it is true that there will be foreclosures hitting the markets. Obviously this will be area-dependent in many cases , but personally I do not believe that San Diego will be hit as hard as other areas of the country (possibly with the exception of Chula Vista and some East county areas).

Regardless of what the future holds and how this will play out, and acknowledging that we can argue about this until we are blue in the face, it is time for creative solutions that will help to heal the problem that we have: to wit, vacant homes with no one taking care of them or paying the mortgage.

Lenders should take heed and put qualified renters in these homes. They will pay market rent, or maybe even a bit lower than market rent, and move into these homes. The homes will be maintained, occupied, and the lender will be receiving money each month to cover the payments on the property. Neighbors’ property values will not deteriorate because of the vacant homes that become eyesores. There could even be potential for future purchases by the tenants written into the leases. It is a win-win situation for everyone.

Sometimes you have to think simply to solve problems in a big way. So let’s get these lenders moving towards real solutions.