Another wave of foreclosure filings hit the region in the third quarter, with Atlantic and Cumberland counties facing some of the highest rates in New Jersey, data released today by RealtyTrac shows.
One in every 312 Atlantic County homes faced an initial foreclosure filing, an auction notice or a bank repossession from July to September, the Irving, Calif.-based tracking service says.
In Cumberland County, one in every 299 homes experienced this. The state average was one in every 424.
Foreclosure activity spiked sharply in New Jersey — up 130 percent from the third quarter of 2011 — and throughout much of the region.
The trend is contrary to that in the U.S., which experienced an average decline, but one that has been anticipated for a couple of years following the halt in foreclosure processing by New Jersey courts.
RealtyTrac spokesman Daren Blomquist expects the increase to weigh somewhat on home prices.
“I don’t think it will be catastrophic by any means, but when foreclosures sell at a discounted price, it has a negative impact on surrounding home values,” he said. “The increase in foreclosures in Atlantic City and New Jersey is not so much a sign of new problems in the housing market. It’s more the market having to deal with problems created several years ago.”
Jean Ball, an agent at Re/Max Atlantic in Northfield who handles distressed properties, said short sales far outnumber foreclosures, but short sales add their own wrinkles.
“It’s bringing the market down faster than anything else,” she said. “And the people who short-sale their houses, a lot of them can’t buy a house for three years. That also brings a group of buyers out of the market.”
In a region with high unemployment and a struggling casino industry, the outlook on this segment of the housing market is difficult to gauge.
“I don’t know if we’re in the middle of the second wave,” Ball said. “It can change by the minute, but I think employment has a lot to do with it.”
Foreclosures are a judicial process in New Jersey. They had been held up since 2010 in response to some improper procedures, such as robo-signing, but have picked up this year.
RealtyTrac data shows third-quarter foreclosure activity in:
n Atlantic County increased 65 percent from the second quarter and 91 percent from third quarter 2011 (to 406 filings).
n Cape May County grew 35 percent from the second quarter, but dropped about 3 percent from third quarter 2011 (to 153).
n Cumberland County rose 39 percent for the quarter and 202 percent year over year (to 187).
n Ocean County increased 69 percent for the quarter and 162 percent year over year (to 706 filings).
Cumberland and Atlantic counties trailed Sussex and Warren counties for the state’s highest rates of foreclosure activity per housing unit. Ocean County ranked 13th; Cape May County 20th.
New Jersey still has the second-longest foreclosure process in the country — taking 931 days on average, Blomquist said.
That is one-and-a-half years longer than the national average.
However, the jolt in foreclosure activity in the past two quarters helped cut about five weeks off the average time in New Jersey, he said.
“In the long term, the market needs to absorb these distressed properties at some point to move forward with the housing market recovery,” he said.
Anthony D’Alicandro, president of the Atlantic City and County Board of Realtors and owner of Coldwell Banker Casa Bella Realtors in Linwood, said the big increase in foreclosures was expected.
“It’s not a surprise. It’s just the realization of what was inevitable,” he said.
He expects it may take two to three years for these properties to work through the market.
D’Alicandro said there is generally high demand for lower-priced, first-time-buyer homes, which keeps inventory at a low level in that market.
“This market is 100 percent about price and is very price-sensitive. When something is priced right, whether it’s a foreclosure or not, it’s going to get attention,” he said.
Contact Brian Ianieri: