A Residential Shortage that is Not
Limited By Geography
Many areas of the country are suf-
fering from this issue – even the big
cities, such as New York. Said C. J.
Hughes, at least one major obstacle is
preventing a surge in residential sales
in New York City: Even if buyers
want to purchase
homes, there
aren’t many to
choose from.
In fact, the
current inven-
tory crunch, the
worst in recent
memory, has
become the
defining feature
of New York’s
residential mar-
ket.”
Areas such
as New York,
which are seeing
strong demand for people that want to
move into the city, simply cannot keep
up with the demand. Hughes quoted
Neil Garfinkel, a New York real estate
attorney, who said, “Other factors
restricting residential inventory today
include continued high unemployment
and tight credit, industry experts said.
Homeowners who are struggling finan-
cially or fear they can’t get a mortgage
can’t upgrade to larger apartments.
That means they’re unlikely to put their
own homes on the market. If you can’t
trade up, you’re probably not going
to sell. Adding insult to injury — for
buyers, at least — is that the lack of
supply is sending prices of available
homes through the roof. In a perverse
way, tight credit is making housing
prices rise, which is completely con-
tradictory. But it is definitely keeping
inventory from entering the market in a
normal way. The tight market condi-
tions have also led to regular bidding
wars. Garfinkel estimated that one out
of every three Manhattan buyers who
comes to his office has engaged in a
bidding war of some kind. Last year, by
contrast, he might have seen that in just
one in ten deals. Things have heated up
significantly.”
The strong demand for residential
homes and the combination of the credit
crunch and the banks’ unwillingness to
able in plenty in the probate business
and it offers a significant amount of
opportunities to not only investors, but
to individual homeowners who really
want to purchase a new home and not
wait for a change in the economy.
Experts estimate that nearly 100,000
probates are filed each and every
month in the United States. Each pro-
bate filed nearly always has property
attached to it – including everything
from boats, to cars, vacation homes,
businesses, commercial property and
yes, residential property. This means
that there is a constant flow of resi-
dential properties into the market in a
way that the larger economy simply
isn’t seeing at this time.
There are significant benefits to focus-
ing on finding a residential property
through probate. The process itself
is guided by the courts and requires
that property be distributed or
liquidated in order to close the
filing. In order to do that, the
court empowers an Executor,
who can be a family member,
friend, attorney or accountant
to make the decisions for the
estate. This is a benefit to
residential buyers because
Executors know that the prop-
erty they represent needs to
be sold in order to pay taxes,
medical bills, legal fees and
funeral costs.
Discounts and Quick
Closings are Common
sell foreclosed properties in a timely
manner at a reasonable price have left
homeowners with few options.
Probate Properties Provide
the Solution
The probate industry continues to
flourish despite the overarching chang-
es to the residential real estate market.
Residential real estate is always avail-
Because of this fact, many Executors
are prepared to sell residential homes
for up to thirty to fifty percent below
the current market value. These dis-
counts are not only due to their need
to sell the home, but because most
Executors are quite realistic about
their property. While the “bones” of
the home may be good and it may be
in an excellent area, their loved one
may not have had the energy to take
move and the credit market and resi-
dential inventory so low, bidding wars
and higher prices are now the norm.
David Brown, a housing analyst, was
quoted as saying, “I continue to hear
anecdotal reports of strong demand:
multiple offers on a property, prices
getting bid up above the listing price,
and homes selling before they official-
ly hit the market. Unless more exist-
ing homes get listed or builders start
more homes, the housing market will
remain very competitive for buyers the
remainder of the year.”