Despite the fact that the national foreclosure rate reached an 11-year low last year, New Jersey had the highest rate of foreclosure in the U.S. for the second consecutive year. The continued backlog of distressed properties in the foreclosure process, high property taxes, and slow economic growth is weighing heavily on the current New Jersey housing market.
In February 2017, the national average for foreclosure activity dropped to its lowest point since November 2011, marking the 17th consecutive month of annual decreases, according to ATTOM Data Solutions. Despite the national drop in foreclosure activity, New Jersey saw a 16 percent increase during this time period. Atlantic City and Trenton were listed as two of the state’s metropolitan areas with the highest rate of foreclosure. Within two of the last three months, the Garden State experienced an increase in foreclosure starts. A foreclosure start is when a homeowner does not cure the default by paying the amount specified in the breach letter and the lender or loan servicer officially begins the foreclosure process.
ATTOM Data Solutions Vice President Daren Blomquist said that the increase in foreclosure starts may be due to the backlog in legacy distress as a result of the housing crisis and the share of bubble-era loans that are in foreclosure. In New Jersey, bubble-era loans represent 61 percent of all foreclosures. New Jersey may also be facing housing market strain from its high property taxes, which may be making it difficult to liquidate distressed properties and may hinder the state’s home price recovery, according to Rob Lyszczarz, President of RE/MAX Properties Unlimited. HSH.com’s “home price recovery index” found that Camden, New Jersey, was cited as one of the top 10 metro areas with home prices that have recovered the least since the Great Recession. According to HSH.com, Camden’s current home price recovery index stands at 182.94 and would need a 22.82 percent increase to reach its peak value of 224.69.
Another factor hindering the New Jersey housing market is the state’s slow economic growth. According to the U.S. Census Bureau, in 2015, median household incomes rose 5.2 percent; however, New Jersey’s household incomes only increased by 0.3 percent. Between November 2016 and November 2017, home prices rose by 7.1 percent nationally (4.7 percent when weighted for owner-occupied units, as opposed to those being acquired by real estate investors), but the Garden State only saw a 1.7 percent increase during this time period, according to CoreLogic.
The New Jersey foreclosure process can be an overwhelming and emotional experience for homeowners. It is important that homeowners who are facing foreclosure consult an experienced foreclosure defense lawyer. The New Jersey foreclosure defense lawyers of Hunziker, Jones & Sweeney, P.A. will review your case, advise you of your legal rights and provide guidance on the best course of foreclosure defense. For more information or to schedule a consultation, call our New Jersey foreclosure defense law firm at (973) 256-0456.