MBA Q&A with SingleSource Property Solutions’ Brian Cullen: Moving Vacant Properties to Active Housing Inventory

MBA NewsLink recently spoke to SingleSource Property Solutions’ CEO and co-founder Brian Cullen. SingleSource is a provider of property services supporting the U.S. housing industry.

Cullen’s responsibilities include daily oversight of all aspects of the company as well as various strategic sales and marketing initiatives. He graduated from John Carroll University with a Bachelor of Science in Business Administration and received his MBA from the University of Pittsburgh.

MBA NEWSLINK: How many single-family properties are currently vacant?

BRIAN CULLEN: The number of vacant properties fluctuates constantly due to economic conditions, market dynamics and demographic shifts. But based on recent research, there are approximately 16 million U.S. residential properties that are vacant right now. That’s up significantly since the height of the pandemic, when there were a little less than 14 million vacancies nationwide.

For historical context, during the height of the 2008-2009 housing crisis, vacancies reached as high as 19 million.

NEWSLINK:  Are all of the 16 million properties foreclosures?

CULLEN: No. Foreclosures represent a number of vacancies, but about half of all vacant properties are actually vacation homes, second homes or rental properties. Another 30% are deliberately vacant for various reasons, with no intention of being sold.

The reasons why they are vacant can vary. Maybe owners are waiting for market conditions to improve, or there are legal or financial complications that prevent the property from being sold or rented. That leaves around 4 million properties that are permanently vacant, including foreclosures. Many of these homes are uninhabitable without significant improvements.

NEWSLINK: How many vacant properties are foreclosures?

CULLEN: An exact number of foreclosures–AKA real estate-owned properties, or REOs–is difficult to determine. However, over the last few quarters, we have seen 15,000 – 20,000 national REO acquisitions per quarter. These may seem like relatively small numbers in the grand scheme of things, but it’s significant when you consider the impact REOs have on local communities.

When homes sit vacant for an extended period of time, it often leads to deterioration and blight, which impacts the surrounding home values in the neighborhood. However, they also represent opportunities for investors and homebuyers who see the hidden potential of these properties.

In fact, a growing number of cities, community organizations and financial institutions are looking for ways to leverage REOs as assets for community development and revitalization.

NEWSLINK: Why is increasing the housing inventory part of SingleSource’s mission?

CULLEN: It’s an area where we can have a big impact. Housing inventory is sitting at historic lows, which is driving up home prices and making it difficult for many working Americans to find affordable housing. According to the latest numbers, active listings are a little over 700,000, which is about half the number in 2016.

We already provide mortgage servicers with the tools and resources they need to manage REOs, and we have years of experience converting REOs into properties ready for sale. By streamlining the process of converting vacant properties into affordable housing opportunities, we’re in a unique position to make a tangible difference and help alleviate some of the pressures of the current housing shortage.

This opportunity also aligns with our broader commitment to support the housing market and contribute to the economic well-being of local communities around the country. Part of our company’s greater goal is to promote and preserve the vitality of neighborhoods and help unlock the door to homeownership. It’s something that resonates with and energizes our team, because they can see their efforts are creating real-world benefits for potential homebuyers as well as creating stronger neighborhoods.

NEWSLINK: What is the benefit of expanding inventory?

CULLEN: There are multiple benefits of converting vacant REOs into sellable homes. For lenders, the advantage is twofold. Moving REO properties off their books quickly reduces their holding costs and mitigates the financial impacts and risks associated with managing these assets. This in turn helps streamline their operations and enhances their financial health.

For potential homebuyers, increasing local housing inventory helps keep home prices more affordable. And for neighboring homeowners, restoring vacant properties into quality, livable homes removes eyesores, boosts local property values and improves the overall quality of life in their neighborhood. There really are no downsides.

NEWSLINK: What steps do you think can be taken to expand U.S. housing inventory?

CULLEN: Outside of the obvious answer–building more housing–there’s plenty that can and should be done. For example, financial institutions and regulators should change the current practice of applying moratoria or temporary bans on foreclosures and evictions to mortgages associated with vacant properties. While this practice helps protect homeowners and tenants from losing their homes, when it’s applied to vacancies, it can delay the process of getting unoccupied homes back on the market.

Modifying this approach represents the single biggest opportunity in expanding housing inventory. Once freed from these constraints, vacancies can be more swiftly processed, renovated and sold.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)