I read an article about this a few weeks ago in some email that I got from a Realtor site.
It was not this specific article, but along the same line of tearing down houses.
According to the article....it many of these cities, particularly in the northeast (Rust Belt)....because people could not sell their houses after they lost their jobs, nor pay the mortgage, there are an abundance of properties that have been abandoned. Some for several years.
The article noted that along with no one to purchase these homes, many of which are nice, large, at one time very good family-type homes...they have been abandoned for so long that they are becoming structurally unsound. Wood rot, termites, moisture issues causing severe mold problems, and general decay, are making these homes suffer from structural obsolescence in that it would cost too much to recover the property, even if there were qualified buyers.
Razing the houses, and turning the cleared land into city/community cared for properties is about all that can be done with them. Until jobs come back into the area, bringing the local economy back, there will not be buyers with the exception of speculators who will want to own the land.
Even here, where I live, we have a surplus of homes. After the hurricane season of 2005 and 06, many builders were building homes in the $300-600,000 range, hoping to get people leaving the Florida area to get away from the hurricanes. Like Florida, we donot have state income tax and we have fairly reasonable housing compared to many areas of the country. Well....they didn't come from Florida, because they couldn't sell their homes in Florida. Some local people moved up and had two mortgages....ending up taking a loss on their prior homes. Now, we have an oversupply of houses in most price ranges, but really high, from $250,000 on up. Builder properties, finished and unfinished are going on the auction block or into foreclosure.
I saw a 3700 SF all brick house the other day in the MLS, all that's done is the brick and the windows are in, house is framed in, in a $350,000-$500,000 subdivision for $99,000!!!!! That's crazy! The lot is tax valued at around $50,000.
The whole housing market anywhere in the country, is so incredibly unpredictable right now.....