While national foreclosure rates rose 15% during the first half of 2009, in New Jersey foreclosures are dropping. NJ foreclosures are down by 30% for the first six months of 2009 compared to the same period in 2008 according to Realty Trac. In May, the New Jersey Judiciary announced foreclosure activity for the first 4 months of 2009 was down by 20%. These figures certainly point to an improving housing market in New Jersey.
A lot of credit is being given to the programs New Jersey brought out in January to help homeowners avoid foreclosure. A special foreclosure mediation website was put up just to help owners avoid foreclosure by the State with a toll free hotline. The Star Ledger reported that although few homeowners were helped, public awareness occurred. Because the public has been made aware of this issue by these programs, many homeowners took stock of their situation. The impact was significant. Many homeowners too action to avoid foreclosure.
Another aid has been historically low interest rates. Low rates have allowed people to refinance their mortgage into a more affordable loan. Supporting this is the fact that the New Jersey housing market hasn’t depreciated as badly as elsewhere. Our house values have performed better than national averages.
According to Jeff Otteau, the renowned analyst of New Jersey’s housing market, this makes quite a difference. “The reason that borrowers walk away and mail in the keys is because not only are they having a hard time making their payments, but their houses are worth less than their mortgage balance,” Otteau said.
Bergen County foreclosure rate, as reported in The Record on July 16th, are 1/206. The foreclosure rate for New Jersey is 1/146 and for the US it is 1/84. As usual, Bergen County outperforms the general real estate market.
We can’t predict the future but it’s safe to say that the future will be brighter. it’s also true that a 30% drop in foreclosures will certainly stimulate consumer confidence in NJ housing and that is huge. Any time foreclosure rates are down the impact on real estate will be positive. For Bergen County homes, with it’s consistently superior performance, this is even more the case.