Distressed Luxury: Is It Part of Your Business?
The fastest growing sector of distressed properties in the U.S. is the luxury market. We’ve been saying this for some time now, but a recent article in The New York Times titled “Biggest Defaulters on Mortgages Are the Rich” just reaffirmed our stance. NYT teamed up with CoreLogic to find that more than one in seven homeowners with loans in excess of a million dollars are seriously delinquent. Not one in seven mortgages, but one in seven homeowners. This interesting distinction (check out their graph) draws a light on how current economic conditions (troubled mortgages, unemployment, underemployment, medical bills, relocation, etc.) are affecting different demographics. Where some real estate agents might believe the luxury market is unapproachable or that the rich have different problems from everyone else, this proves that there is abundant opportunity to help distressed homeowners in any tax bracket.
Unfortunately, the report also suggested the prevalence of “strategic defaults” among the well-to-do, dumping properties “just as they would any sour investment.”
“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.
Perhaps this is true. But is this a reason for agents not to help? Is this a reason for agents not to offer up services, or educate these homeowners on other, perhaps more beneficial options? Absolutely not.
Agents educated in foreclosure-avoidance – especially short sales – should take this news as encouragement … that there are opportunities to grow a business by helping more homeowners, regardless of mortgage size.
