DANGER ZONE FORECLOSURES HIT NYC LIKE A BRICK By MAX YUCKY June 12, 2008
How huge has New York City’s foreclosure problem become?"Two years ago, there were just a few selected ZIP codes where [foreclosures] were terrible," says Matthew Haines, the founder of PropertyShark.com, which tracks foreclosures in the five boroughs. "Now there are whole areas – areas that contain 12 or 15 ZIP codes – that are really terrible."With foreclosures hitting the five boroughs hard, even responsible homeowners are going to feel the pinch. Just one foreclosed house can bring down property values on an entire block (see tale on next page).On the other hand, if you’re looking to buy a home in one of the city’s more distressed areas, your chances of finding a deal are increasing. That’s because the number of foreclosures and mortgage delinquencies only seems to be getting higher.
Last week, the Mortgage Bankers Association released data on the nationwide mortgage delinquency rate for the first quarter of 2008. It showed a jump from 4.84 percent in the first quarter of 2007 to 6.35 percent in the first quarter of 2008 – the worst late-payment rate since 1979.And while many real-estate professionals insist New York is immune to wider market woes, the city’s latest foreclosure data is cause for concern."If you look at the map, more than 50 percent of the surface area of New York City is in foreclosure distress," says Haines.In the first quarter of 2007, there were 554 foreclosures citywide. In the first quarter of 2008 there were 918 – a 66 percent uptick.And homeowners looking to sell their houses in foreclosure-heavy areas are feeling the squeeze."I have a listing in St. Albans, [Queens]," says Anthony Carollo of Carollo Real Estate. "Their asking price was $399,000 [seven months ago], and they couldn’t sell it. We got it in April, and we started at $369,000."That house was a well maintained, three-bedroom frame Colonial that had not been foreclosed on – but several other houses nearby had been. And the banks were trying to get those properties off their hands as quickly as possible."We’ve been going up against homes that banks were willing to sell for $75,000 less," says Carollo. "The bank doesn’t want to own the property. They don’t want to spend the money maintaining it or the legal fees."As for the listing in St. Albans: "We just dropped the price again, to $339,000."Data from May suggests the foreclosure problem is getting worse. New York City foreclosures overall were up 49.8 percent last month compared to May 2007. Queens saw 177 foreclosures, Brooklyn had 55, Staten Island had 47, and The Bronx had 20. Even Manhattan didn’t walk away unscathed – it counted 14 foreclosures.And with banks tightening the reins on money, it’s harder for homeowners to fight their way out of foreclosure."Certainly, if lenders would ease up, work with people to change their rates, it would stabilize the market," says Sam Heskel, executive vice president of the appraisal firm HMS Associates. "It’s heartbreaking. I went into a foreclosed house the other day, and you could see a crib, food that was there. People were there up until a few weeks ago. It’s just sad."
Tags: foreclosure, bank owned, reo, Queens, NYC
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The thing is, lenders won't ease up on their conditions. It is hard to imagine a bank or another lending institution to wrok for the people. As harsh as it sounds they work for themselves. But the numbers of foreclosures differ from area to area. Aa a Toronto real estate agent I try to keep a close watch on major areas of the real estate market, for they tend to have a simmilar developement. But I hope that the rising trend won't continue.
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