Eventual result of neigborhood foreclosures

Foreclosures have unfortunately become a blight on my neighborhood that seems to be increasing by the day.
The neighborhood consists of late 70s-early 80s split level 3-4 bedroom homes that fetch $230-$250K in good condition.
But lately a common sight is a for sale sign in the yard, a dumster in the driveway filled with crap (old matresses, broken drywall,etc.), and weeds over a foot high. And the homes are trashed.
On certain streets there can be up to 50% of the houses up for sale and none of them moving. I’m pretty sure the asking prices on some of these dumps are more close to $200K.
It’s an odd sight because about 1/3 of the homes in the neighborhood are kept pristine with fresh paint, meticulous landscaping, and green plush watered lawns.
Another 1/3 are your average nice homes with cut lawns and satisfactory upkeep, and then there are the 1/3 eyesores.

So with the crackdown on the subprime lending market what should I predict the eventual outcome to be in say 5 years time?
Worst case scenario would be for some slumlord to buy up foreclosed properties, do nothing to improve them, and rent them out to the same people that got foreclosed on. That would suck.
Best case scenario would be for responsible parties to buy them, fix them up decently, and resell them for profit or responsible families to buy them and fix them up nicely.
So what should I expect to see in the coming years?

IMHO, the end result is that large financial institutions will end up owning large amounts of real estate after the homes are torn down, which they will sell for large profits. Did you think this foreclosure crisis was an accident?

How would that work? Let’s say a house sold for $300,000 and the buyer put 10% down (subprime borrowers often put even less than 10% down). The lender is out $270,000 in exchange for first lien rights on the property. The buyer defaults on the loan and the lender forecloses. There are no buyers, so the lender essentially bought the property for $270,000. They knock the house down, so now they have a lot worth maybe $150,000. They paid $270,000 for it. How do they make large profits doing this? If there are large profits in selling loans that get foreclosed, why are the lenders looking to the government for a bailout?

The odd thing also in this neighborhood is that for all the houses up for sale, it’s the ones that are in great shape with a high asking price that sell. The dumps don’t move.
Someone with a lot of money to invest could literally buy up 5 foreclosed houses at once on the same street, whip them into shape all at the same time to save money, and turn a pretty penny.

Welcome to the unraveling of the bubble.

Right now the ones that are in great shape with a high asking price might be selling, but people will wise up to that. The people buying now are the last trickle of greatest fools.

Who knows what the banks are going to do when they now “own” half a block of dumps that they previous owners have stripped of appliances, and anything else of value. They’re not going to hire landscapers and house painters for YOUR benefit.

Drive around Baltimore if you think that entire swaths of property can’t stay boarded up and disheveled for long stretches of time, while slowly eroding the value of all that is around them.

Too many houses were sold to “investors” and too many houses were sold to people who couldn’t afford them.