I've been reading some very misleading articles lately about the current condition of the Real Estate market in NY. Many articles are misleading readers. I'd like to acknowledge Brandon Moore, CEO of REaltyTrac for his clear understanding of the statistics and giving an honest and clear picture of our current market conditions. Although the number of foreclosure filings was down in 2011 compared to 2010, those figures are misleading. The truth is the average foreclosure in the fourth quarter of 2011 took over 33 months, that's almost 3 years. And that's the problem, because the process has been extended and in some instances, stalled completely, we've seen a short term decrease, but the number of people not paying their mortages is increasing.
“Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year,” said Brandon Moore, chief executive officer of RealtyTrac. “The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages — particularly in states with a judicial foreclosure process.
New York State, which follows a judicial foreclosure process, had the longest average foreclosure process in the nation during the fourth quarter, up 37 percent from the same time in 2010. New York properties foreclosed in the fourth quarter took an average of 1,019 days to complete."
“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets,” said Moore. “We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010.”
As Moore states above, NY has the longest foreclosure process in the nation. Allowing people to stay in houses for almost 3 years without making payments isn't a solution. Until we clear out the existing REO inventory (and shadow inventory coming in the near future), this down market will far exceed previous down markets. This will continue to hurt the economy and keep unemployment at historic high levels. Unfortunately I feel like we're stuck in the old "chicken or the egg" situation. Do we need the real estate market and economy to turn around so we businesses can start hiring, or do we need businesses to start hiring so the real estate market and economy can turn around?
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