From the NY Times:
PRICES are down across the board so far this year in urban, suburban, rural and shore areas, in both northern and southern New Jersey — everywhere except areas close to Manhattan commuter train service, and in all price categories except, surprisingly, the uppermost.
What is perhaps scarier, market analysts say, is that mass foreclosure actions, which could further hurt home values, have yet to make their presence felt.
“The floodgates have been opened” on foreclosures, said Bill Flagg, a foreclosure specialist with ERA Queen City Realty in Scotch Plains. “Still, we are seeing just a trickle of listings.”
In August, after an investigation into lending practices at five big banks, a state Supreme Court judge removed what had been a de facto moratorium on judicial approvals of foreclosures.
In some other states, banks are still in the process of “recertifying” their lending practices, after evidence of “robo-signing” and careless processing of loans came to light. In New Jersey, however, that is officially done and over. “We don’t know for sure why the banks continue to hold back” on foreclosure listings, Mr. Flagg said.
New Jersey has almost 30,000 homes stuck at different points in the foreclosure “pipeline,” according to court records. Their owners are months to years delinquent on mortgage payments, and lenders have gone to court, at least to begin proceedings to seize their properties, as is required in this state.
On average, the process was taking 708 days, or nearly two years, while the moratorium was in effect in New Jersey. After it lifted in August, new foreclosure filings did increase: there were 1,190, up from 859 in July. But that was a small rise when seen in context, said Jeffrey G. Otteau, the president of the Otteau Valuation Group in New Brunswick.
As of the end of August, there had been 68 percent fewer foreclosure filings than in the same period of 2010, with just 0.05 percent of homeowner households receiving a first-time notice of default. That equates to five foreclosure filing notices for every 1,000 homeowners.
So when will the foreclosure wave finally show up? “This situation,” Mr. Otteau wrote in an e-mail, “reminds me of the recent BP Gulf oil spill, where we were all waiting for the oil to hit the beaches,” and the quantities that did arrive were smaller than expected. “I’m still wondering where it went — probably sitting on the ocean floor in enormous pools of coagulation, much like the shadow inventory in the foreclosure markets.”
Eventually those failed loans will have to “rise to the surface,” Mr. Otteau said. He predicts that when foreclosures do start coming fast and furious, the impact will be highly uneven around the state — just as the pain is unevenly dispersed now.