Foreclosure House Listing Pace Faster in Urban Areas in NJ
The pace of foreclosure house listing is faster in more urbanized areas in New Jersey, as shown in the much higher number of foreclosure filings in Middlesex County, which has more urban areas and higher population than other counties such as Hunterdon and Somerset.
The number of Middlesex households that received foreclosure notices during the four-month period from July to October is about triple the combined number of filings in Hunterdon and Somerset.
According to Central Jersey realtors, the more urban areas have suffered from foreclosures more because the older, closely-built and therefore less expensive homes are located in these areas. Owners of these homes have lower incomes and therefore are more likely to default if they are laid off from their jobs.
Additionally, more lower-income borrowers also took out no-documentation loans or subprime loans, which are the types of mortgages that typically go into foreclosure because of their higher costs and their readjustments into much higher monthly payments.
Jeffrey Otteau, CEO of appraisal firm Otteau Valuation Group, also said that it is usually the lower-income jobs such as retail and service jobs that are eliminated first during economic downturns, so it is lower-income homeowners in urban areas that are more likely to lose their homes to foreclosure.
Statewide, the foreclosure house listing pace stepped up in November both from October and from November last year. More than 9,200 households received default or foreclosure notices, including nearly 7,500 that were hit with lis pendens notices and more than 1,000 that received foreclosure sale notices.
According to dean James Hughes of the Rutgers University Edward J. Bloustein School of Planning and Public Policy, the key to the reduction in foreclosures and the stabilization of the housing sector in New Jersey is a significant improvement in the employment situation.
New Jersey has been losing jobs over the past years because of the declining business climate in the state. With high taxes, high living costs, restrictive building and zoning regulations, business enterprises are leaving the state.
Since last year, the state has already lost almost 180,000 jobs and the jobless rate remains at 9.7 percent. During the four-year period to 2008, family income has dropped faster by 100 times the national average rate.
New Jersey property professionals believe that the foreclosure house listing pace in the state will continue to grow because of the expected resetting of low-pay-option mortgage loans and the lack of improvement in the employment situation.
