Foreclosures are surging in some locales, and some housing experts view that as a good thing for the housing market this spring. Foreclosures tend to be priced lower, and many markets are starved for inventory in the lower end of the market.
Bank repossessions across the U.S. may have plunged to an 11-year low in 2017, but that hasn’t been the case in every market. New Jersey saw the opposite, with bank repossession hitting an 11-year high in 2017.
New Jersey leads the nation in overall foreclosure activity. About 1.61 percent of the state’s homes were in foreclosure last year, according to ATTOM Data Solutions, a real estate data firm.
The surge in foreclosures is drawing investors who are looking to buy homes and convert them to rentals.
Christian Schlueter, president of the New Jersey REALTORS®, told The Wall Street Journal that a recent waterfront, bank-owned home attracted eight offers in three days and was under contract for more than the asking price.
“There’s a lot of experienced investors who are buying [bank-owned homes] and some new people are buying them believing they are going to be investors,” he says.
New Jersey, New York, and other states that follow a “judicial foreclosure” system, in which foreclosures wind their way through the court system, often face lengthier times to process and backlogs of foreclosures. Other states that have a nonjudicial system, like Michigan and Texas, have been able to work through their backlog of foreclosures much quicker.
According to ATTOM Data Solutions, the states with the highest foreclosure rates in 2017 were New Jersey, Delaware, Maryland, Illinois, and Connecticut.
Source: “Why New Jersey’s Soaring Foreclosures Are Good for the Housing Market,” The Wall Street Journal