The Real Deal New York

Foreclosures drop in NYC, NJ amid rising property values

But lenders are still moving ahead with foreclosure auctions
August 03, 2016 06:00PM

A home in Jamaica, Queens awaiting foreclosure (credit: Ron Antonelli/NY Daily News Archive via Getty Images)

A home in Jamaica awaiting foreclosure (credit: Ron Antonelli/New York Daily News Archive via Getty Images)

Speedier courts and rising property values are driving down the number of homes facing foreclosures in New York and New Jersey.

The number of pending foreclosures in New York City dropped by 5.8 percent in the first half of 2016, the biggest decrease seen since 2008, the Wall Street Journal reported. In New Jersey, the number of foreclosures fell by 28 percent.

Until now, New York and New Jersey have lagged behind other parts of the country in recovering from the post-2008 foreclosure crisis. At the beginning of this year, New Jersey and New York respectively had the first- and second-highest percentage of homes facing foreclosure.

Part of the reason for the recent reversal is the increase in property values. Lenders are now moving forward with foreclosure auctions, seeing that there’s a greater profit to be made from properties in traditionally lower-priced neighborhoods, like Jamaica in Queens. The second quarter of this year saw a 10 percent year-over-year increase in average New York City home prices. During the second quarter of 2016, the number of city properties scheduled for auction increased by 33 percent from the second quarter of 2015.

Another reason for the drop in pending foreclosures is that the courts are working through the backlog of cases at a quicker pace. In January, Justice Lawrence Knipel, the administrative judge for civil cases in Supreme Court in Brooklyn, shifted 6,000 foreclosure cases to one judge, from more than 20 who had failed to move the cases forward.

“Who wants to sign foreclosures? Not many people,” he told the newspaper. “Judges were taking their time.” [WSJ] Kathryn Brenzel