From the Courier News:
As the real estate market seems to be stabilizing nationally and the number of foreclosed homes across the country fell for the fourth straight month, according to Realty Trac, closer examination of local markets shows that New Jersey is not following that trend.
While New Jersey’s statewide foreclosure rate is 0.03 percent — a third of the national rate — Realty Trac, a national company that tracks real estate statistics indicates that the number of people behind on their mortgage payments is not falling every month. In fact, New Jersey figures for July through October are significantly higher than numbers for fourth-quarter 2008 and first-quarter 2009.
HARD-HIT PROPERTIES: While there are foreclosures in every town, communities with the densest populations and oldest housing stock – the more urbanized areas – have been hit hardest. In Central Jersey, the number of homes receiving foreclosure notices is about three times higher in Middlesex County than the combined number in Somerset and Hunterdon counties. Middlesex County also has more urban centers and a higher population than Somerset and Hunterdon counties.
Several reasons exist for the higher foreclosure rates in Middlesex County:
First, the least affluent homeowners live in the most urbanized areas, where housing has traditionally been less expensive because the homes are older and built closer together.
“Those owners are the least likely to have savings if they lose their job,” Crivello said.
Second, when the economy weakened, the jobs that disappear first are the lower-paying service and retail jobs that these homeowners were likely to have, according to Jeffrey Otteau, chief executive officer of Otteau Valuation Group, an appraisal company in East Brunswick that also studies industry trends and market forces.
Third, many of these homeowners were given subprime loans or no-documentation loans, mortgages that carried significantly more risk.
ames Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University in New Brunswick, pointed out that the key to stabilizing the housing market is a stable employment outlook — and New Jersey’s employment picture has been in decline for some time.
The state’s unemployment rate, at 9.7 percent, remains just below the national figure, but New Jersey will this decade with fewer jobs than when it started in 2000. The recession has only worsened the situation.
“Since the recession started in January 2008, we’ve lost 179,400 jobs,” Hughes said.
The prospects for job growth in New Jersey are not good, either. The state is losing high-paying jobs and replacing them with very low-paying jobs. In fact, from 2005 to 2008, household income has declined here, at a rate 100 times greater than the national average, according to Otteau.
“New Jersey is not attractive to business because of our high cost of living and of doing business, our high taxes and our restrictive practices,” Otteau said. Some of those practices relate to environmental, zoning and building regulations, among others.