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US housing market in recovery, but New Jersey still struggling

There is good news and bad news for the U.S. housing market. The good news is that on the average, the market appears to be on the upswing. According to market researcher RealtyTrac, the average number of U.S. foreclosures decreased by 19 percent in October 2012 as compared to that month in 2011. October was the third straight month this year in which the number of foreclosures fell.

The bad news is that there were nearly 186,500 U.S. properties with foreclosure notices, planned auctions and bank repossessions in October. This is a 3 percent increase from September 2012. RealtyTrac reported that one in every 706 U.S. homes were subject to a foreclosure during October. The number of properties subject to the start of the foreclosure process in 15 states increased 2 percent from September to October. New Jersey, New York and Connecticut saw the worst increases in foreclosures in October.

RealtyTrac explained that the very different foreclosure trends during the month of October were probably due to the manner in which each state’s mortgage lenders handled the incredibly high number of past-due loans during the worst part of the housing market crisis in 2010. RealtyTrac reported that foreclosure process will come to a standstill in the states affected by Hurricane Sandy such as New Jersey. This delay in the foreclosure process will slow down the already crawling pace of the foreclosure process, which in turn will slow down the pace at which the housing market recovers.

This may be a good time for distressed New Jersey homeowners to try to negotiate loan modifications with their lenders. They may be more inclined to deal instead of going through an extremely lengthy foreclosure process without receiving any mortgage payments.

Source: NASDAQ, “U.S. Foreclosure Filings Drop 19% in October,” Melodie Warner, Dec. 3, 2012

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