It depends on where they are from. Housing is usually plenty in rural areas so those houses are looted and deserted; while apartments in metropolitan areas are usually much more valuable. According to Livia Bitton-Jackson's memoir My Bridges of Hope, after being liberated from Auschwitz, she, her mother, and brother went back to small town of Šamorín, Czechoslovakia. Their house was in bad shape but still standing. She also wrote that many people did not go back to their home because their houses were destroyed; their hometown became part of another country; antisemitism were still prevalent in their home country (I remember reading in another thread that antisemitism was even worse in German occupied areas than Germany itself); and the fact that many people do not want to see their neighbors who turned them in to the Nazis.

I can talk for Austria which was part of the German Reich by March 1938. Jewish property like shops and later apartments and houses were dispossessed very quickly, mostly still in '38. Shops and companies were given to provisional administrators and were later given to "Germans". Usually, "old party comrades", i.e. people who were members of the NSDAP before 1938 were favoured.
Many Jewish families also sold their houses to prepare their exile. Some property was sold (mostly very cheaply) to official owners like communes. In a case I am just researching, the local municipality bought a house and installed the municipal office there.

In the case of Austria, most immobile private property was returned rather quickly after the war (other property, most prominently artwork, often wasn't) to the rightful owners or their heirs. Most of them were of course in exile in the USA or Israel or among the displaced people of Europe. Many then sold their houses or apartments via trustees to local people.

This is a very complicated theme. The restituiton of stolen property was somewhat done but was very complicated. Jews had to actually prove that it was once their property or their parents property. This alone was pretty hard to do. This whole thing hasn't been settled until the 90ies and there are still regularly court dealings because of this.

In general it is to be said, while some got something (often not a 100% exchange) back, many didn't. The politics of it are pretty dirty and don't put a good light on Germany and Austria.

http://en.wikipedia.org/wiki/Wiedergutmachung In Austria it's restitution politics. Didn't find an English Wikipedia entry. But you can google it a bit and I bet there will be worthwile things.

For the original confiscation and their distribution: It was organized by the Nazis and the party. That meant that they decided who gets what. This meant a lot of corruption and pulling strings as well as it was used for "buying" votes. It was a time of very very few housing in big cities. Throwing out 30.000 jews over a few weeks and giving their houses to "Germans" (Jews were German too), meant that they "created" a lot of living space very fast.

What happened when jewish property was stolen without Nazi handling is shown during the Anschlusspogrom. After Austria was annexed there were Pogroms against Jews were lots of stuff was stolen and people were killed. These pogroms are, other than e.g. Kristallnacht not handled by the Nazis but were surprising them, and had no leadership. They were spontanous.

This meant that the Nazis couldn't distribute the property to whom they wanted. There were articles released in "Der Stürmer" (premier propaganda paper) that called for a stop of this anti-jewish violence. They did this specially because of the reason that in this instance they weren't able to distribute the stolen property to whom they deemed worth but that it happened without the blessing of the party.