The number of new foreclosures in New York City decreased in November 2011 for the sixth consecutive time, according to a report released by PropertyShark.com, a New York-based foreclosure listings and property search website.
In all, there were only 57 new residential foreclosure auctions scheduled in New York, down 5% over October 2011, and down 61% over the same month of last year. For the first time ever Manhattan edged out Queens for the inglorious title of the borough with the highest number of foreclosures, but given the low base number, there’s little room for concern. Both boroughs saw only 16 new foreclosure auctions, a huge improvement, especially for Queens, which had in its peak days as many as 320 new foreclosure auctions scheduled in a month.
At the same time, New York City home prices rose close to an all-time high, with a median sale price of $493,100 in Q3 2011, just 0.4% off the peak level of $495,000 in Q2 2007. Prices in all the five boroughs posted an impressive recovery from the bottom of the market, with gains of as much as 21% in Brooklyn ($473,000), 12% in Staten Island ($365,109), and 9% in Manhattan ($830,000) and Queens ($316,690).
But it’s not all good news for the New York real estate market. While prices have recovered from their recessionary lows, transactions dropped by as much as 10% in the last quarter over Q2 2011, and are still way below their pre-crisis levels. 8,220 homes were bought in New York City in Q3 2011, a far cry from the 14,100 home sales recorded in Q3 2006, when the market reached its peak.
Foreclosures are at their lowest levels in years but experts warn it’s due to regulatory pressure on banks to revise their foreclosure filing processes. This has created a huge backlog of foreclosures, which has been estimated by the NY Times as 62 years – the number of years lenders would take at their current rate to repossess homes which are in severe default or foreclosure.
It’s hard to tell whether the experts’ warnings will be proven valid by worrying rates of foreclosures continuing well into the future. Mortgage delinquency, a good indicator of future foreclosure troubles has not increased, according to Crain’s New York. And New York City has always had a special appeal for home buyers and real estate investors. "New York City real estate has been a solid long-term investment," Matthew Haines, the founder of PropertyShark, told Crain’s New York in an interview a month ago.