Will NJ Ever Recover from the Mortgage Crisis?

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Some recent statistics show that some areas of New Jersey appear to be pulling out of the Mortgage Crisis (sometimes interchangeably called the Great Recession, the Housing Bubble, the Housing Recession and/or the Housing Crisis).

Rentals at many shore towns are on the rise again, overall sales in the state as a whole are on the incline, but foreclosures still have a tight grip on much of New Jersey. As you have probably read in the news, Atlantic City remains at the top of the nation’s list of cities with the most foreclosures. Trenton follows Atlantic City in a close second place – in the entire country.

Some pockets of New Jersey are experiencing an upswing in the number of homes being purchased, which has led to a sense of reassurance among homeowners in those areas. However, even though more properties are being sold in some New Jersey towns, overall home prices are far below where they were before the mortgage crisis, which started in 2007 and lasted until around 2009.

Unfortunately, there are a number of factors at play that are causing New Jersey’s cities and towns to struggle to turn things around like the neighboring cities of Philadelphia, PA and Brooklyn, NY have successfully done.

Primarily, New Jersey is one of the states wherein foreclosures must proceed through the court system, which makes the entire process lengthier, and when the Great Recession hit almost a decade ago, the number of NJ foreclosures severely clogged up the court systems.

The New Jersey foreclosure timeline stretched out to take years from start to finish. Additionally, at the end of the foreclosure process, foreclosed homes in NJ are sold at a Sheriff’s Sale, where many of the properties are purchased by speculators or investors.

Combine the effects of the recession coupled with damage done by Hurricane Sandy in 2012, and what we’re left with is a large percentage of properties in the state of New Jersey that are now owned by corporations. In turn, the corporations typically rent out the properties, which draws a totally different type of dwellers.

Instead of the devoted members of the community, many towns across the state are now undergoing a demographic shift. Many former homeowners, outed because of foreclosure or damage from Sandy that they couldn’t afford to repair up to code, have been replaced with these new renters who simply aren’t as community-minded as the previous residents were.

Along with older New Jersey homeowners leaving the state because they lost their homes to foreclosure or Hurricane Sandy (or a combination of both), younger home buyers want to live close to mass transit for easy access to exciting urban areas.

What does all of this mean for New Jersey? The good news is that the rate of new foreclosures is slowing down, and the low home prices may very well be a result of homes that have finally reached the end of the foreclosure process and have made it to Sheriff’s Sale, where they’re sold cheaply.

While things still don’t look great in the New Jersey real estate market, and some towns may indeed undergo long-lasting demographic changes, the numbers are trending in the right direction. Real, lasting change may be in our state’s real estate market future, but it won’t happen overnight. As things are now, many New Jerseyans are still affected by foreclosure. If you’re one of them, Veitengruber Law can help.

Image credit: Matt_Lodi

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3 Responses to Will NJ Ever Recover from the Mortgage Crisis?

  1. Pingback: Purchasing a NJ Foreclosure Property: The Risks | Veitengruber Law

  2. Pingback: Buying a NJ Foreclosure Property: The Risks | Veitengruber Law

  3. Pingback: Help! I Haven’t Made a Mortgage Payment for 5 Years! | Veitengruber Law

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