The New York metropolitan area ranked 15th in the nation for residential foreclosure sales last quarter with 4,300 distressed properties changing hands at an average price of nearly 39 percent less than that of non-distressed homes, according to a report released today by RealtyTrac.
For a region that typically fares better than the national average in the grimmest of foreclosure statistics, the ranking is a rare wake-up call, particularly because the numbers are lower than they might be if not for the state’s stall tactics, said Rick Sharga, senior vice president for RealtyTrac.
“The state has put in some of the longest delaying procedures in foreclosure prevention programs anywhere in the country,” Sharga said, referring both to New York’s extended pre-foreclosure period, which postpones the initiation of foreclosure proceedings by banks, and to its delays in foreclosure processing after an action has been filed.
The deferrals have “probably stalled a lot of foreclosures that might have otherwise taken place,” he added.
For now, though, the region is still holding up better-than-average in terms of proportions: foreclosures — defined as properties that are in default, scheduled for auction or bank-owned — made up just 15 percent of all home sales during the first quarter, RealtyTrac said.
That ratio was even lower — 9.61 percent — in the five boroughs alone.
Nationwide, heavily discounted foreclosure properties continued to draw droves of first-time homebuyers — who also benefited from the government’s $8,000 tax credit — and investors to the bargaining table. Last quarter’s 232,959 residential foreclosure sales accounted for 31 percent of all home sales, according to the report.
That market share — though significant — is down 14 percent from the previous quarter and 33 percent from the first quarter of 2009, when 37 percent of all U.S. residential sales were of properties at some stage of the foreclosure process.
And those properties have gotten even cheaper. U.S. homes in foreclosure changed hands at an average of 27 percent less than the prices non-distressed properties sold for last quarter, according to the report. Discounts on foreclosure properties have been steadily increasing since 2006, when such homes were selling for 21 percent off.
The New York metropolitan area’s higher-than-average 39 percent discount suggests that the foreclosure crisis hasn’t had much of an adverse impact on property values in the region, Sharga explained. Foreclosures tend to drag down the sale prices of their neighboring properties, but in this case, area homeowners who stayed current on their mortgage payments still managed to sell at relatively high prices, he said.
That’s not necessarily true in the foreclosure-ravaged pockets of Queens. The borough’s 369 foreclosure sales last quarter went for an average of 13.2 percent less than the borough’s non-foreclosure properties, likely because “the problem was severe enough there that it did have an effect on overall home prices,” Sharga said.