Another Real Estate Time Bomb: Unsellable Vacant Homes?

From a NYC reader via e-mail:

My good friend is a real estate broker in Westchester/Dutchess County. He said he is seeing a real problem growing with title insurance. He said a large number of the REO properties banks try to get him to sell cannot close because of title problems. He’s worried about the growing number of vacant homes which may be impossible to sell.

For those who don’t know the New York area, Westchester County is full of wealthy bedroom communities like Scarsdale; Dutchess County is further out but well off by national standards. The unemployment rate for the state is better than the national average, and with New York famously having the longest foreclosure clearing time in the US (as in the number of defaulted homes versus throughput rates in the courts), the state is not a prime candidate for a huge inventory of unsold homes.

Put more simply, if you are seeing a significant overhang of unsold, and perhaps more important, unsellable, houses in two relatively well off counties in New York, it’s likely that the same problem exists elsewhere.

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