Foreclosures now ‘normal’ at 10-year low
According to RealtyTrac’s November 2015 foreclosure report, the rate of foreclosures continues to decline in the United States. The total number of foreclosure filings — default notices, scheduled auctions, and bank repossessions — fell 10 percent from October 2015, and 7 percent from November 2014.
“Foreclosure starts — people falling into trouble — has returned to what we would consider ‘normal’ levels,” said RealtyTrac economist Daren Blomquist. Foreclosure starts have now fallen to the level of mid-2005.
Blomquist said banks have adopted much stricter underwriting standards since the recession, and it is difficult now to get a mortgage without good credit and steady income. The improving job market makes it more likely that people who get a mortgage today can continue making their monthly payments.
Bank repossessions, meanwhile, have been rising — up 35 percent since November 2014. Blomquist said that after long delays — caused in some cases by legal challenges and lawsuits — banks are now proceeding aggressively to seize and resell properties that owners defaulted on or abandoned in recent years.
There are still pockets of real-estate distress around the country, with rates of foreclosure highest (by rank) in Maryland, New Jersey, Florida, Nevada and Illinois. Atlantic City and Trenton, New Jersey, rank No. 1 and No. 2 for foreclosures by metro area.
Economist James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, explained that New Jersey’s economy has struggled from a number of causes since the recession. “New Jersey got hit hard by the contraction in the financial sector — especially along the Hudson River Gold Coast,” said Hughes. “In terms of employment, that sector has been dead in the water.”
Hughes said Superstorm Sandy in October 2012 delivered a double-blow to the economy — damaging buildings and infrastructure across the state, and depressing tourism on the Jersey Coast. Increased competition from new casino venues along the East Coast, meanwhile, has been devastating to Atlantic City, which once had a regional monopoly on legal gambling.
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