Foreclosure trouble brewing in some markets
March 16, 2005
High level of personal bankruptcies often precedes home loss
While the economic picture in New Jersey continues to improve, many homeowners in the state are finding themselves in financial distress, which could lead to more foreclosures, according to Foreclosures.com.
"We're seeing a fairly high level of personal bankruptcies in northern and central New Jersey," said Foreclosures.com president Alexis McGee. Bankruptcy filings are a tactic homeowners frequently use to stall foreclosure when they're in financial trouble, she added.
"Jersey City took the biggest hit on personal bankruptcies because incomes are a little lower there, and homeowners had less 'wiggle room' when job losses occurred over the last three years."
McGee added that the housing market in the Garden State remained strong, and that housing supply constraints were supporting prices.
"While we're seeing price appreciation cooling down on both coasts," she said, "the lack of developable land in New Jersey, combined with increasing complications in the political processing of proposed land development, is bracing up home prices in the state. That makes it easier for troubled homeowners to sell their way out of foreclosure."
Foreclosures.com is a Northern California-based investment advisory firm specializing in distressed property. The company has been publishing pre-foreclosure lists and assisting investors since 1992, and serves markets in all of New Jersey, the metro areas of New York, Chicago, Phoenix, Las Vegas and selected major California counties.
New Jersey has been over-weighted with emphasis on the telecom and manufacturing sectors, McGee said, citing a report by PNC bank, a major eastern bank holding company that said that the recent acquisition of ATT by SBC would result in thousands of local layoffs because ATT was a major New Jersey employer.
"This is the kind of local economic event that can drive foreclosure activity off its normal baseline," she said, "but we won't see the effect of the job losses for a few months. Foreclosure activity is a lagging indicator."
Copyright 2005 Inman News