New Jersey Real Estate Report

From the Record:

N.J. troubled mortgages grow to 14.5%

As unemployed homeowners struggled to pay their mortgages, the percentage of New Jersey loans in foreclosure or at least a month behind on payments hit 14.5 percent in the third quarter, the Mortgage Bankers Association said Thursday.

That means that almost one of every seven mortgages in the state was in trouble. The nationwide percentage of delinquent or foreclosed mortgages was a record 14.4 percent, up from 10 percent a year earlier.

The rise in unemployment is the main driver behind the rise in foreclosures, according to Jay Brinkmann, the mortgage bankers’ chief economists. Despite the apparent end to the recession, unemployment is running at the highest level in decades — 9.7 percent in New Jersey and 10.2 percent nationwide in October.

“Mortgages are paid with paychecks,” Brinkmann said. As the number of unemployed people jumped by about 5.5 million over the past year, two million mortgages fell into serious delinquency, he said.

And he said mortgage delinquency rates and foreclosures “will continue to worsen before they improve,” because hiring is not expected to pick up until the first or second quarter of 2010.

While subprime mortgages remain the most distressed sector of the market, the number of new delinquencies is growing faster among prime mortgages, which were taken out by qualified borrowers. Those prime borrowers tend to have more savings to support themselves during unemployment, Brinkmann said. But if they are out of work for a long period, eventually even they find it difficult to hang on to their homes.
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New Jersey ranked fifth, right behind those states, in the percentage of loans in some stage of the foreclosure process during the third quarter. With home values down about 20 percent from their peak in the region, many homeowners who lost their jobs and fell behind on mortgage payments couldn’t just sell their houses without taking a loss.
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“We’re seeing people with exploding mortgages that have just started to explode,” Salowe-Kaye said.

Step 1: Buy a house for $415,000 (April, 2000)

Step 2: Cash out to the tune of $600,000 (June, 2005)

Step 3: Sell out and profit, a 115% gain in 6 years seems reasonable (May, 2006)

MLS# 2276951
10 Brookvale Road, Kinnelon NJ (Smoke Rise)
Listed: 5/11/2006
List Price: $895,000

Step 4: Hmm, didn’t plan on step 4 (June, 2006)

Step 5: No problem, so the profit is just a bit lower than expected. (Thru the end of 2006)

MLS# 2276951
Reduced to : $695,000 (not much left after commission and expenses)
Days on Market: 190
Expired

Step 6: Too late for Step 5 (December, 2008)

Step 7: Bank dumps it (October, 2009)

MLS# 2687193
Listed: 6/1/2009
Original List Price: $494,900
Reduced to: $428,000
Days on Market: 101
Sale Price: $330,000

From the WSJ:

US Foreclosure Filings Up 19% In Oct, But Positives Seen

The number of U.S. properties for which a foreclosure filing was received grew 19% in October from a year earlier, but declined for the third month sequentially, an indication the foreclosure tide may be turning.
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Foreclosure filings - default notices, auction sale notices and bank repossessions - were reported on 332,292 properties for the month, down 3.3% from September and resulting in one of every 385 U.S. housing units receiving one.

The troubles in the residential sector are expected to continue throughout 2009, and not surprisingly, much of the pain is coming from former bubble markets that are now dominating RealtyTrac’s report.

From CNBC:

Foreclosures Fall Again But Improvement Likely Fleeting

Foreclosure rates fell for the third consecutive month in October, but remained sharply higher than a year ago, according to a new report, with analysts cautioning that the improvement was at best temporary.
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“It’s good to see that foreclosures have slowed down marginally, but we don’t really think it’s a trend,” said Rick Sharga, vice president of marketing at foreclosure tracking Web site RealtyTrac, which released the report.

Legislation in some states has slowed foreclosures, says Sharga, but the impact will be temporary and won’t ultimately prevent most of them. In Nevada, for example, foreclosures dropped 26 percent from the previous month because of new legislation requiring mediation before initiating foreclosure proceedings.
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RealtyTrac predicts that 3.2 to 3.4 million properties will go into foreclosure in 2009, up from 2.3 million in 2008.

From Bloomberg:

U.S. Foreclosure Filings Surpass 300,000 for 8th Straight Month

U.S. foreclosure filings surpassed 300,000 for an eighth straight month as unemployment made it tougher for homeowners to pay their bills, RealtyTrac Inc. said.

A total of 332,292 properties received a default or auction notice or were seized by banks in October, up 19 percent from a year earlier, Irvine, California-based RealtyTrac said today. One in every 385 households received a filing. The tally fell 3 percent from September, the third consecutive monthly decline.

“The foreclosure problem is still with us and will keep prices down,” Stephen Miller, chairman of the economics department at the University of Nevada at Las Vegas, said in an interview. “The real issue is we don’t know what inventory banks are holding that they have yet to put on the market.”

Distressed real estate transactions accounted for 30 percent of all home sales in the third quarter as the median price fell 11 percent from a year earlier to $177,900, according to the National Association of Realtors. U.S. unemployment surged to a 26-year high of 10.2 percent in October as payrolls fell by 190,000 workers, the Labor Department said last week.
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“The fundamental forces driving foreclosure activity in this housing downturn — high-risk mortgages, negative equity, and unemployment — continue to loom over any nascent recovery,” James Saccacio, chief executive officer of RealtyTrac, said in the statement. “We continue to see foreclosure activity levels that are substantially higher than a year ago in most states.”
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Filings fell 12 percent from a year earlier in New Jersey, which had the 13th highest rate. They dropped 26 percent to 2,306 in Connecticut, and rose 28 percent to 4,797 in New York.

From CNN/Money:

Foreclosures: ‘Tide may be turning’

Could the foreclosure plague be ending?

Foreclosure filings were down 3% in October, the third consecutive month-over-month dip, according to RealtyTrac, the online seller of foreclosed homes.

To be sure, foreclosure rates are still elevated from a year ago: They’re up 18% compared with October 2008. But the month-over-month decrease followed a 4% drop in filings during September and a 1% fall in August.

“Three consecutive monthly declines is unprecedented for our report, and, on first blush, an indication that the foreclosure tide may be turning,” said James Saccacio, RealtyTrac’s CEO, in a prepared statement.

He cautioned, however, that three consecutive singles does not constitute a hitting streak. So there still may be dark days ahead.

From the National Association of Realtors:

Metropolitan Area Existing-Home Prices and State Existing-Home Sales

Metropolitan Area / Q3 Year over Year Price Decline
Allentown-Bethlehem-Easton, PA-NJ / Down 6.1%
Atlantic City, NJ / Down 10.4%
New York-Northern New Jersey-Long Island, NY-NJ-PA / Down 14.1%
New York-Wayne-White Plains, NY-NJ / Down 13.9%
NY: Edison, NJ -/ Down 8.9%
NY: Nassau-Suffolk, NY / Down 9.2%
NY: Newark-Union, NJ-PA / Down 14.8%
Trenton-Ewing, NJ / Down 15.0%

From the Courier News:

Central Jersey home prices dropped 8.9 percent in third quarter

Prices of existing homes in the region fell 8.9 percent during the third quarter, a Realtors’ group reported Tuesday, in a sign that the housing market has yet to emerge from its three-year-old slump.

The report would appear to be good news for buyers, who can take advantage of lower prices, rock-bottom mortgage rates and giant tax credits. But experts said the slow job market is taking a toll.

“There are a lot of things that play on the consumer’s mind right now, things they worry about that they never worried about before,” said Jim Brown, senior vice president of Kastle Mortgage Corp. in Freehold. “And it all has to do with jobs.”

The National Association of Realtors reported that the median price of a home in Monmouth, Ocean, Middlesex and Somerset counties was $343,800 during the third quarter, down from $377,300 the same quarter a year ago. Prices have fallen 17.2 percent since their third-quarter peak in 2006.

From the Record:

Home prices seen stabilizing

hile home prices continued their decline in the third quarter of 2009, several North Jersey real estate agents said Tuesday that they see signs that values are stabilizing.

The National Association of Realtors said Tuesday that home prices in the New York metropolitan area, which includes North Jersey, declined 13.9 percent, to a median of $449,700, from the third quarter of 2008 to the third quarter of 2009. But prices were up from the first half of the year, hinting that home prices may be leveling off.

“Prices have definitely stabilized,” said Tom Steimle, an agent with A.W. Van Winkle in Rutherford. He predicted that mortgage rates around 5 percent and the extension and expansion of the $8,000 federal homebuyers’ tax credit will continue to draw buyers into the market, keeping prices steady into the spring.

“Some towns are not experiencing the decline that others are,” said Gary Silberstein, a Coldwell Banker agent in Ridgewood. “If there’s a strong school system, New York City transportation and a town center, the prices are holding more steadily due to high demand.”

From the Press of Atlantic City:

N.J. homes sales jump 11 percent in quarter, while Atlantic County prices fall 10 percent from year ago

U.S. home sales surged 11 percent in the third quarter - and 18 percent in New Jersey - as first-time home buyers seeking the $8,000 government subsidy rushed into the market.

Prices rose compared to the prior quarter but remained down 11 percent from a year ago for the U.S. and 10 percent lower for Atlantic County, according to the National Association of Realtors survey released Tuesday.

Home sales in New Jersey were 8 percent higher than a year ago, while U.S. sales were up 6 percent from the year before.

The New Jersey Association of Realtors said the increase was caused by the federal government’s $8,000 first-time homebuyer tax credit, which had been set to expire at the end of November but was extended and expanded through April 30.

“The jump in third quarter activity in New Jersey as a whole can largely be attributed to the summer and early-fall rush of first-time home buyers aiming to close in time to obtain the $8,000 tax credit,” Jarrod C. Grasso, association executive vice president, said in a statement.

From the AP:

Median home prices fell nationwide in 3Q

A real estate group says home prices fell in eight out of every 10 U.S. cities in the third quarter of this year as heavily discounted distressed sales made up 30 percent of all deals.

But home sales continued their climb, with quarterly sales outpacing the second quarter and the previous year’s figures, the National Association of Realtors said Tuesday.

The median sales prices of existing homes declined in 123 out of 153 metropolitan areas compared with the same period a year ago. Prices rose in the other 30 cities.

The national median price clocked in at $177,900, or 11 percent below the third quarter last year.

From the WSJ Developments Blog:

It’s (Almost) Official: Home Buyer Tax Credit Extended, Expanded

Congress voted on Thursday to extend the tax credit and President Obama plans on signing it into law Friday morning. The $8,000 credit will apply to all contracts, for homes up to $800,000, entered into before April 30, 2010, and closed by June 30. It creates a new $6,500 credit for property owners who have lived in their home for at least five consecutive years.

Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples, from $75,000 and $150,000, respectively. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.

From the NY Times:

A Bad Way to Spend Money

Congress threw good money after bad this week when it voted to extend and expand a wasteful home buyer’s tax credit set to expire at the end of the month.

The new program, which will continue through the spring, is being portrayed as a rescue plan for the ailing housing market. But this costly giveaway to the real estate and mortgage industry will spend far more in taxpayers’ dollars than it can ever deliver in economic benefit. As happened with the cash-for-clunkers program in the automobile industry, the program will make housing look momentarily betterbut is unlikely to contribute to long-term recovery.
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The bill that passed both houses of Congress this week extends the program through April 2010 and grants the full tax credit to couples who earn up to $225,000. The expanded program introduces a $6,500 tax credit for people who already own homes but want to buy new ones.

From the Philly Inquirer:

Bad home-building loans plague banks

As financial regulators shift their sights to the mounting problems with commercial real estate loans, many Philadelphia-area banks remain bogged down in bad loans for residential construction.

Led by construction loans, the overall percentage of problem loans - those seriously behind in payment - at the 15 largest publicly traded banks here soared to nearly 3 percent Sept. 30 from 0.89 percent a year earlier.

That increase added $1.1 billion to the loans banks will have to collect through restructuring, foreclosure, or other measures - unless the improving economy allows the borrowers to recover enough to pay their debts.
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Bankers, meanwhile, even those with the strongest loan portfolios in the region, see continued problems.

“I think every bank is going to be thinking very carefully about bolstering their reserves because you just don’t know what is out there,” said Kent Lufkin, president of TF Financial Corp., of Newtown, the parent of Third Federal Savings Bank, which had the lowest rate of nonperforming assets among the area banks.

Lufkin said Third Federal stayed out of trouble during the real estate boom because it did not change its conservative lending practices. “That’s helped us today to have a lower percentage of nonperforming assets,” he said.

By contrast, Abington Bancorp Inc., of Jenkintown, followed a suburban builder with which it had previous experience into the Philadelphia condo market during the real estate boom. The move came after the company raised $71 million in a 2004 stock offering and contributed to Abington’s possession of the highest rate of nonperforming assets in the region, 5.03 percent, according to data from Bloomberg News.

“It’s our construction-loan portfolio that’s in bad shape,” said Robert White, the lender’s chief executive officer. Indeed, the delinquency rate on its residential construction loans, including loans at least 30 days past due, was 35.2 percent on Sept. 30, according to a report by Stern, Agee & Leach Inc., a research firm in Portland, Maine.
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The average past-due rate on construction loans at 15 Pennsylvania and New Jersey banks Kelley tracks climbed to 15.5 percent in September from 12.1 percent in June. The figure for commercial real estate climbed to 2.9 percent from 2.6 percent.

With loan defaults still rising two years after the subprime-mortgage crisis began, all business loans - not just for commercial real estate - are getting careful attention.

From Reuters:

U.S. home price gains may not be sustainable: Shiller

The gains in U.S. home prices in recent months may not be sustainable and increases in some areas of the country appear to be in “bubble territory,” an economist known for his property market expertise said on Tuesday.

Robert Shiller, an economics professor at Yale University and co-developer of Standard and Poor’s S&P/Case-Shiller Home Price Indices, told Reuters Television he does not give quantitative forecasts on where home prices are headed but is concerned about the recent pace of increases.

Home prices in certain areas, such as Minneapolis and San Francisco, have risen by double-digits over a mere four months, and if viewed on an annualized basis, they look like they are in “bubble territory,” Shiller said.

“It is a time of great uncertainty,” he said.

U.S. home prices in August rose for the fourth straight month. The Standard & Poor’s/Case-Shiller composite index of home prices in 20 metropolitan areas rose 1.2 percent in August from July, topping the estimate of a 0.7 percent rise according to in a Reuters poll.

“The prominent fact that we are seeing with this data is that home prices are just zipping up,” Shiller said.

“It is entirely possible that even with the bad news we are getting, home prices could start a major increase,” he said.

Prices in the top 10 U.S. metropolitan areas gained 1.3 percent in August after a 1.7 percent rise the previous month, according to the S&P composite index.

From the APP:

Time winding down for home buyers

With its expiration just over a month away, a push is on to extend the first-time home buyers’ tax credit, which boosted the beleaguered housing market in the midst of a recession.
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There are competing ideas out there to extend — and even expand — the tax credit, which gives up to $8,000 to first-time buyers who close on a home by Nov. 30.

In a press conference on Monday at the New Jersey Association of Realtors in Edison, U.S. Rep. Leonard Lance, R-N.J., said his bill would open the tax credit to all people buying a primary residence, regardless of past home ownership or income. He would increase the credit to $15,000 and extend the program through Dec. 1, 2010.

“We do not want the American dream to expire,” Lance said. “We want to make sure as many Americans as possible have home ownership.”

Lawmakers are under pressure from real estate agents and others in the housing industry to extend the credit.

The timing is critical, Lance said.
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In the Senate, Senate leaders are negotiating to extend the credit and gradually reduce it through 2010, Democratic Sen. Bill Nelson of Florida said Monday.

Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus of Montana, both Democrats, may seek to add the home buyers’ extension to legislation extending unemployment benefits that may be debated as early as this week, according to Regan Lachapelle, an aide to Reid.

Another proposal by Sen. Christopher Dodd, D-Conn., Senate banking committee chairman, and Georgia Republican Sen. Johnny Isakson would extend the credit through next June and expand it to couples earning $300,000 or less, up from the current program’s $150,000 maximum income eligibility for married couples.

The current program comes with costs. Congress allocated $13.6 billion for the home buyers’ credit. As of July 17, 2009, more than 1.1 million tax returns claiming more than $8 billion in credits have been processed.

From the NY Times:

Puzzling Over Home Prices

THE housing market in New Jersey has been on a little roll toward recovery — the number of sales has risen and the number of houses on the market has fallen for four straight months — even though activity cooled slightly in August for the country at large.

But what does that mean for home prices? A halt in the decline? Even, possibly, a start in the other direction?

“In some neighborhoods, I have to say yes, prices are starting to go up,” said Karen Eastman Bigos, a partner in the Towne Realty Group, based in Short Hills, one of the highest-priced markets in northern New Jersey.

On the other hand, she and others say, brokers continue to encounter sellers who are “stuck in 2006.” Some people hear news reports about the improvement in conditions nationally, and insist on pricing their homes at precrash levels, Ms. Bigos said.
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Most recently, Jeffrey Otteau, the group’s president, announced his view that it will take until 2016 for prices to recover to their high point in 2006.

Over all, he added, it is “very difficult — and possibly too soon” to say whether prices have even stopped their decline.

For one thing, data on final sales prices are not available until sales close — usually two to six months after a contract is signed — so there is a lag time before conclusions can be drawn. For another, there is no tried-and-true analytical method for determining the direction prices are headed at a time of flux like this.

When pressed to consider what could be discerned from information now at hand, Mr. Otteau came up with this: The seasonal shift downward in prices that occurred from summer to fall was not as sharp as last year’s. This year, the downward shift from the second to third quarters was 7.4 percent; last year, it was 10.4 percent.
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Mr. Otteau said his data suggested that “a ground is beginning to form in terms of prices,” and noted that the trend had occurred as government stimulus programs that were intended to stabilize the residential real estate market were taking effect.

No matter how good the numbers are in a particular community, however, realistic pricing is critical.

From the AP:

Meltdown 101: Housing starts show industry’s woes

Housing construction is crawling out of its very deep hole, but no one expects it to reach the heights hit before the housing bubble burst — at least not for a very long time.

The Commerce Department released its monthly report on housing starts Tuesday, saying they increased in September by a modest 0.5 percent to an annual rate of 590,000 new homes and apartments. Applications for new building permits, however, fell by 1.2 percent to an annual rate of 573,000 units.

Here are some questions and answers about the housing starts report and what it says about the state of housing and the overall economy.
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Q: What has been happening to housing starts?

A: They have been on a wild roller-coaster ride.

They surged into the stratosphere during the housing boom in the middle of the decade as cheap credit propelled sales of both new and existing homes to record levels for five straight years. To meet demand, builders ramped up production, pushing construction starts to 2.07 million units in 2005, close to the all-time high for housing starts of 2.36 million new homes and apartments constructed in 1972.

Q: What happened after 2005?

A: Housing has been in a painful, prolonged slump. Housing starts hit an all-time low this past April of 479,000 units at an annual rate, 79 percent below the peak month during the boom years. Since April, however, housing construction has staged a modest rebound, rising in four of the past five months, including the 0.5 percent gain in September that was reported Tuesday.

Q: So is that good?

A: Well it is certainly better than the plunge in construction that occurred over the past 3 1/2 years. The downturn in housing, accompanied by rising mortgage defaults, helped trigger the worst financial meltdown since the Great Depression and pushed the country into its longest recession in seven decades.

A rebound in housing is needed to help support overall economic growth — both directly, through the money spent to build new homes, and indirectly, through the support increases in home sales provide to related industries such as appliance makers and furniture stores.

Q: What do economists expect will happen in coming months?

A: The September housing starts report gave some mixed signals. Housing starts did rise but the report showed that permits for new construction fell for the second month out of the past three. And analysts closely follow building permits as a good indication of future activity.

Analysts suspect that the September permit decline was a payback from a jump in applications earlier in the summer, as builders rushed to get projects started in time to take advantage of the government’s $8,000 tax credit for first-time homebuyers. That program is scheduled to end Nov. 30.

From the Wall Street Journal:

Foreclosures Grow in Housing Market’s Top Tiers

New data suggest that foreclosures are rising in more expensive housing markets.

About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006.

The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. “The slope of that curve in recent months is much sharper than it was recently,” said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up.
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Foreclosures are rising in more expensive markets as home values in those areas fall, leaving more homeowners with mortgages that exceed the value of their properties. Prime loans accounted for 58% of foreclosure starts in the second quarter, up from 44% last year, according to the Mortgage Bankers Association. Subprime mortgages accounted for one-third of foreclosure starts, down from one-half last year.

The prime category includes so-called exotic mortgages that were increasingly used to buy more expensive homes, including interest-only mortgages that allowed borrowers to defer principal payments during an initial period. Borrowers often aren’t able to refinance out of these products because the drop in home values has left them with little equity in their homes.

From the NY Times:

Overall, International Interest in U.S. Real Estate Has Waned

Despite plummeting prices, international interest in United States property cooled in the last year, according to an annual survey by the National Association of Realtors, a U.S. organization of property agents.

From May 2008 to May 2009 foreign nationals purchased an estimated 154,000 homes in the United States, down from 170,000 in the previous 12 months, the survey found. Twenty-three percent of the agents questioned reported at least one contact with an international client, down from 26 percent in 2008 and 32 percent in 2007.
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And agents in the top four states for international sales — Florida, California, Texas and Arizona — reported their international business actually increased 35 to 45 percent in the period.
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In May 2009, with currency exchange ranges fluctuating, the average U.S. home price was $218,300, compared with $278,100 in Canada and $237,900 in Britain, according to the association’s data.
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International buyers paid a median price of $247,100 for existing homes, compared with a median sales price of $198,100 in 2008, the new study found. Buyers from India paid the highest median price, $322,200.

Most international buyers came from Canada, Britain, Mexico, India and China, in that order, the survey showed. And while the numbers from Canada, Britain and China declined, those from Mexico and India increased.

From Reuters:

The Flood of Foreclosures Shows No Sign of Ebbing

Every 13 seconds in America, there is another foreclosure filing. That’s the rhythm of a crisis that threatens to choke off hopes for a recovery in the U.S. housing market as it destroys hundreds of billions of dollars in property values a year.

There are more than 6,600 home foreclosure filings per day, according to the Center for Responsible Lending, a nonpartisan watchdog group based in Durham, North Carolina. With nearly two million already this year, the flood of foreclosures shows no sign of abating any time soon.

If anything, the country’s worst housing downturn since record-keeping began in the late 19th century may only get worse since foreclosures, which started with subprime borrowers, have now moved on to the much bigger prime loan market on the back of mounting unemployment.

In congressional testimony last month Michael Barr, the Treasury Department’s assistant secretary for financial institutions, said more than 6 million families could face foreclosure over the next three years.
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The Center for Responsible Lending says foreclosures are on track to wipe out $502 billion in property values this year.

That spillover effect from foreclosures is one reason why Celia Chen of Moody’s Economy.com says nationwide home prices won’t regain the peak levels they reached in 2006 until 2020.

In states hardest-hit by the housing bust, like Florida and California, the rebound will take until 2030, Chen predicted.

“The default rates, the delinquency rates, are still rising,” Chen told Reuters. “Rising joblessness combined with a large degree of negative equity are going to cause foreclosures to increase,” she added.

Anyone doubting that the recovery in U.S. real estate prices will be long and hard should take a look at Japan, Chen said.

Prices there are still off about 50 percent from the peak they hit 15 years ago.

From the Wall Street Journal:

Would-Be Hovnanian Condo Buyer Lost Bid, But Saved Cash

David Bartz doesn’t regret the one that got away.

About a year ago, Bartz wanted to buy a $1.4-million unit at 77 Hudson, a 48-story condo project now being finished in Jersey City, N.J., across the river from New York City. But another buyer, he says, snapped it up just days before he was set to sign a contract and plunk down his 10% deposit.

The project is one of many local high-end condo developments - gleaming with granite, concierges and rooftop decks - launched during the housing boom, when easy financing fueled what seemed to be insatiable consumer demand. Bidding wars weren’t uncommon between buyers.
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While he was disappointed someone beat him to the dotted line, that person probably did him a favor. The sizzling real-estate market cooled after last fall’s collapse of Lehman Brothers. With New York transformed into a buyers’ market, buyers are trying to get out of those pricey contracts they inked during the bubble, fearful of closing on a unit already worth less than what they paid. Even committed buyers are having trouble lining up financing, and condos across New York and New Jersey are sitting empty.

Hovnanian, the nation’s sixth-largest builder by annual closings, won’t say how many of its units are sold or under contract.

Bartz, who decided to stay in the townhouse he’s now owned for five years, says his desired condo’s price would be “far away” from $1.4 million today.

“I was taken in by the emotion of the project and the views,” he says. “It would have been a tough financial hit.”

From Reuters via CNBC:

Mortgage Delinquencies Rise Alongside Unemployment

High U.S. unemployment keeps pushing up the rate of mortgage delinquencies, which could in turn drive personal bankruptcies and home foreclosures, monthly data from the Equifax credit bureau showed on Monday.

Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July, according to the data obtained exclusively by Reuters.

August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace. By comparison, 4.89 percent of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44 percent, Equifax data showed.

The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months.

The results, which correlate with consumer bankruptcy filings, suggest U.S. homeowners remain under financial stress despite signs of improving sentiment and fundamentals in the U.S. housing market.

August bankruptcy filings were up 32 percent from a year earlier, compared with a 35 percent year-over-year increase in July.