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Article Courtesy of The Miami
Herald
By Nicholas Nehemas
Published
July 20, 2016
Add it to the list of how the little guy got a raw
deal during the housing bust.
Homes that were foreclosed during the bust gained back value at a much
higher rate than other homes, according to research from real estate
website Zillow — but their former owners didn’t enjoy the profits during
the recovery. Instead, the money went to hedge funds, home flippers and
investors who snapped up distressed properties on the cheap from banks.
79 percent Value growth
for foreclosed homes since market’s lowest point
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Most homes
foreclosed during the bust were cheaper, farther from
urban centers or entry-level — in other words, homes
owned by lower-income earners and younger families.
In Miami-Dade, Broward and Palm Beach counties, homes
that were foreclosed at the market’s lowest point in
2007 have since grown 79 percent in value. That’s lower
than the rate for all homes of 65 percent.
“You had a ton of appreciation for these foreclosed
homes, but the [former] homeowners weren’t getting the
benefits,” said Svenja Gudell, Zillow’s chief economist.
“Lower-end and foreclosed homes were bought up by
investors who would transform those homes into rental
properties. ... Had they held onto their home in many
markets, homeowners would’ve made back their original
investment plus much more.”
Instead of gaining equity, foreclosed homeowners ended
up losing money by paying rent to their new landlords. |
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A foreclosed home on Northwest 17th Street in
Homestead.
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Gudell said the numbers show how the foreclosure crisis contributed to
the United States’ growing wealth gap.
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