Foreclosures Surging in New York-New Jersey Market – Bloomberg 02-26-14

Salient to Investors:

The MBA said New Jersey has surpassed Florida in having the highest share of residential mortgages that are seriously delinquent or in foreclosure, with New York third, whereas hard-hit areas such as Arizona and California have some of the lowest levels after allowing banks to quickly foreclose after the 2007 property crash.

Michael Fratantoni at MBA said loans made pre-crisis have been in a state of suspended animation for a number of years and we are beginning to see the pace of resolution pick up.

RealtyTrac data show it takes 1,029 days on average to foreclose in New York, the highest in the US, followed by New Jersey at 999 days and Florida, at 944 days.

Lawrence Yun at NAR said price increases that are occurring in the rest of the country are not likely to happen in the New York-New Jersey area, with the potential inventory that can come at any time.

Private-equity firms such as Blackstone, which helped drive up prices by buying single-family homes to rent in Arizona, Nevada, California and Florida, have avoided the Northeast. Sam Khater at CoreLogic said large investors favor markets with newer construction and demographic growth rather than the Northeast’s aging homes and higher property taxes.

Jeff Taylor at Digital Risk said the sooner that this foreclosure inventory gets to the market the quicker you’re going to see more home price appreciation.

Jeffrey Otteau at Otteau Valuation said investors are generally avoiding hard-hit neighborhoods in cities such as Newark, Irvington, Elizabeth, Trenton and Camden, and 21 percent of New Jersey foreclosures are in urban areas, 18 percent are in towns hit by Sandy, and only 4 percent are in the southern suburbs and 2.5 percent in the northern ones. Otteau said the crisis will play out in inner, urban neighborhoods where unemployment is highest, credit scores are lowest and investor appetite is non-existent.

Read the full article at http://www.bloomberg.com/news/2014-02-26/foreclosures-climaxing-in-new-york-new-jersey-market-mortgages.html

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