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Data show many shore foreclosures on second homes
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Southern New Jersey hasn't been spared from the wave of foreclosures in the U.S.
But the character of foreclosures might be a little different here compared with those elsewhere because a significant number of properties are second homes.
Anecdotal evidence suggests second homes make up a significant part of the foreclosures along the shore, where barrier islands are mostly covered with housing that's not occupied year-round.
In a way, a foreclosure on second home is less distressing, since it usually means someone well-off is losing an investment, vacation or retirement property, rather than someone losing their primary residence. But there was no way to put a number on how many foreclosures might be in that non-primary market.
Now RealtyTrac, the leading source of foreclosure market information, is rolling out a service for renters that happens to give us a look into our second-home foreclosures.
The Irvine, Calif.-based company offers a picture of how many foreclosures in an area might be rental properties by sorting out the ones whose owners have a mailing address elsewhere. In most markets, most of those homes would be rentals.
However, along the shore, most of those properties are probably second homes. Year-round rentals are rare at the shore because seasonal rents are so lucrative.
Sure enough, RealtyTrac's figures show an unusually large percentage of owner-absent properties among shore homes with a foreclosure filing.
In Atlantic and Cape May counties, 36 percent of properties in foreclosure last month were owned by people living elsewhere.
Cumberland County, with
31 percent, and Ocean County, with 20 percent, fit the national pattern of about 30 percent of owners of foreclosed homes living elsewhere, RealtyTrac said.
Given the dominance of second homes, and the paucity of year-round rentals, my guess is that one-fifth to one-third of the foreclosures in Atlantic and Cape May counties are second homes.
RealtyTrac began delving into the number of foreclosures of rental properties because renters can be caught off guard and dispossessed by a foreclosure in many states, according to Daren Blomquist, spokesman for RealtyTrac.
"They could get an eviction without much notice. ... They possibly could lose their security deposit," Blomquist said. "They may have no knowledge of the foreclosure until they get a knock on the door."
RealtyTrac came up with a foreclosure-notice service that keeps track of a renter's address and warns them if there's a foreclosure filing on that property.
The company figures about 450,000 rental properties in the U.S. are currently subject to a foreclosure filings.
But in New Jersey, the legal protections for tenants are so strong that renters don't need to know whether their property's owner is in financial distress.
In 1994, the state Supreme Court ruled that the state Anti-Eviction Act protects tenants living in rental units from eviction even if the property where they live has been foreclosed upon.
In March, N.J. Public Advocate Ronald Chen sent letters to real estate companies reminding them of the rights of residential tenants in buildings subject to foreclosure. Those with a property license can be fined $5,000 and/or have their license suspended for violating the provisions of the Anti-Eviction Act.
Tenants who want more information can visit:
www.state.nj.us/publicadvocate/public/pdf/tenantsforeclosurebrochure.pdf
Or they can call the Public Advocate's Office at 609-826-5070.
E-mail Kevin Post:
Posted in Business on Sunday, May 10, 2009 3:10 am
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