Cleaning Foreclosures: Why It’s Still a Hot Business Opportunity
The foreclosure crisis has prompted many enterprising entrepreneurs to start businesses cleaning foreclosed properties. With all the talk about government programs that are supposed to help homeowners hang onto their homes, many would think that the foreclosure mess is coming to an end. Not!
We’re just getting into the meat of this crisis, if recent numbers are anything to go by.
This means that cleaning foreclosures is still a hot business opportunity. Following are three reasons why.
3 Reasons Foreclosure Cleaning Business Owners Will Be Busy for Years to Come
April Numbers: April’s foreclosure numbers were at record highs, way above what housing industry experts had expected. Proof?
According to the CNN article, Foreclosures: ‘April was a shocker’, “… [foreclosure filings ] rose 32% compared with April 2008… There were 63,900 bank repossessions, the last stop in the foreclosure process. More than 1.3 million homes have now been lost to foreclosure since the market meltdown began in August 2007.”
Foreclosures Not Counted: What’s even scarier than April’s home foreclosure numbers though is the number of homes that haven’t even been counted. What is meant by this? These are homes that are owned by lenders that haven’t been resold or listed with an agent. And, how many are there?
Six hundred to seven hundred thousand (yes, 600,000 to 700,000). According to the April 8, 2009 San Francisco Chronicle article, Banks aren’t reselling many foreclosed homes, “Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale,… We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market …”
Hence, the full scope of home foreclosures has yet to be seen. This crisis is going to deepen before it gets better.
What this means for foreclosure cleaning business owners is that the bulk of the work is yet to come. Banks are months behind in processing the paperwork required to evict homeowners and/or deal with cleaning up a property to get it back in shape to be resold.
More Foreclosures Coming: More foreclosures are on the way. This is borne out by the following:
Unemployment: Unemployment continues to climb, reaching record numbers. Large corporations are laying of workers left and right, trying to restructure and stay afloat.
Credit Is Scarce: Banks aren’t doing much lending. In fact, many of them are going out of business and/or merging with other banks to stay viable. When banks don’t lend, the economy contracts even more. This means more job losses and even higher unemployment. It’s a vicious cycle.
Home Values are Decreasing: Many struggling homeowners are choosing to walk away from their homes. And why not? The value of homes have dropped, while at the same time ARMs are kicking in, driving mortgage payments even higher.
Here we go again — another vicious cycle.
For all of these reasons, foreclosure cleaning is still a hot business opportunity — and will remain so for some time to come.