Realty411 Magazine Featuring Missy McCall-Hammonds | Page 98

Who Finds Residential Properties Even When the Market is Down? by Leon McKenzie, US Probate Leads T here is no doubt about it. . . Since the recession in 2008, the real estate market sim- ply hasn’t been the same. Some of the people that have been the most hurt in the entire scenario have been homeowners who are simply trying to find a new home to accom- modate a growing family or a need for a new location. Regardless of the geographical area within the United States, there are simply not enough residential properties on the market in this depressed market. There is a solution, though. Investors and individual buyers who are work- ing in the probate industry have ex- perienced a constant supply of viable residential leads that can fit the needs of investors’ portfolios and families. A Shortage that Has Hit Nearly Every Community Why is there a shortage of properties in the United States today? There are a lot of economic reasons and contributing business management policies that have made a tightening of the traditional market inevita- ble. One of the primary reasons that residential properties are simply not on the market is due to the persistent credit shortage. To say that banks are concerned about lending money to homeowners is an understatement. In order to get a traditional mortgage in today’s market, individuals and couples need nearly perfect credit. This inability to get credit means that Realty411Guide.com a lot of families who might look for a new home simply can’t do so, limiting the amount of homes that are coming on the market due to upgrades in residen- tial homes or downsizing. In a recent article by the Dallas News, Ted Wilson of Residential Strategies was quoted, “Inventory — or lack thereof — is the big constraint on the market.” After the credit boom that occurred in the early 2000’s, banks discovered that many of the people who had purchased homes simply couldn’t afford them. That led to a huge amount of foreclo- sures on the market. Many of these homes are still available today. While the idea of a foreclosed home might sound like the route to finding a ton of homes to choose from, that is just not the case. For the most part, banks have opted to sit on foreclosed properties. Banks sitting on foreclosed properties means that a great deal of homes that should be on the residential market are not. And, unfortunately, when a buyer does make an effort to bit on a foreclosed home, the banks are slow to reply to the offer and generally want the market price for the property. Given the fact that many of these homes have been sitting for years and many have been vandalized, have had copper piping and other fixtures stolen or have experienced a significant amount of damage due to the lack of regular maintenance, there is no reason for the home to sell at the cur- rent market value. This is yet another constraint on the traditional residential market. PAGE 98 • 2014 Existing Properties Aren’t Enough for Traditional Buyers In addition to banks sitting on fore- closed properties, a stalling of new building efforts has also hampered the growth of the residential real estate market. In an article written by Susan Stabley of the Charlotte Business Jour- nal, she wrote, “But while the residen- tial real estate market has rebounded in the past year, there’s an imbalance of vacant developable lots. National builders were able to buy land cheap during the recession and then hold on to it as they waited for the market to recover. The inventory of those lots in high-growth areas is now diminishing rapidly.” While many builders are waiting for the economy to return to a growth phase before beginning a building pro- cess, others simply can’t find the right land in order to continue to build new residential properties. This is another reason that buyers simply can’t find the right property in their area to purchase. With many families choosing not to Continued on pg. 100 reWEALTHmag.com