See What’s Causing Foreclosures to Shoot Higher In NJ [AUDIO]
The foreclosure rate in many parts of the country is going down, but in Jersey it's going up.
So what's going on, here?
Pat O'Keefe, Director of Economic Research at JH Cohn says, "We've got two variables at work here - over the past 18 months, because of administrative and legal deficiencies in the processing of mortgages, the courts imposed a moratorium on foreclosures until the procedures could be improved, and then administered properly - that process of re-designing the system was completed earlier this year, and what we're seeing now is a gradual increase in the number of notices of foreclosure that are being processed under the new procedures."
He says, "We can expect that will both continue and accelerate as we move through the second half of this year into the first part of next year…And from the buyers perspective that suggests some downward pressure on prices…But while this is playing out there is growing evidence that the underlying housing market- the demand and supply of housing - has finally turned a corner - and as a consequence we can expect gradual improvement in the number of transactions over the second half of this year going into 2013."
O'Keefe adds the confluence of low interest rates, depressed or discounted prices and other conditions in the market will almost certainly attract real estate investors, and it "should lead to a situation where those who are interested in buying a house will, over the next year, year and a half , have very favorable conditions."
He also stresses, "Over the next year and a half the housing market in the state is poised to improve, but we do need to emphasize that we remain right now at very low levels of housing sales, and prices are pushed down significantly below where they were…But I would expect a year to 15 months from now we will see that the inventory of distressed properties is dwindling rapidly - even though it's a large number- it's only a finite number of units that will go through the foreclosure process and then those discounted prices will not be available…what's happening now is a kind of unpleasant medicine, but it's the only way the market regains its footing and goes forward, and begins to behave like we expect it to do."