Fewer southern New Jersey homes going through foreclosure were sold in 2012 than during the previous two years, a trend expected to reverse this year, a foreclosure tracking firm says.
“What we’re seeing in New Jersey is the calm before the storm, or maybe the eye of the storm is a better way to say it,” said Daren Blomquist, vice president of California-based RealtyTrac.
Foreclosure filings in New Jersey have steadily increased in the past 11 months, and were up about 55 percent last year, Blomquist said.
But since the average time to complete a foreclosure in New Jersey is more than 1,000 days, distressed homes have been slower to reach the market than in much of the U.S.
Even properties in pre-foreclosure that are sold before reverting to banks take 859 days in New Jersey, compared with the 336-day national average, he said.
In Atlantic County, 467 homes in some stage of foreclosure were sold last year, 10 percent fewer than in 2011, RealtyTrac data show. But the fourth quarter picked up, with nearly 27 percent more sales than the third quarter.
Anthony D’Alicandro, president of the Atlantic City and County Board of Realtors, expects a similar trajectory this year.
A New Jersey court-ordered moratorium on foreclosures was lifted in summer 2011. And in February 2012, some major U.S. banks, including JP Morgan Chase, Wells Fargo and Bank of America, reached an $8.5 billion settlement on allegations of wrongful foreclosure.
“It wasn’t until after that they started to ramp up processing,” D’Alicandro said.
“The question will be as we get deeper into 2013, will buyer demand continue to support and quickly absorb if it comes on the market?” said D’Alicandro, who also owns Coldwell Banker Casa Bella Realtors in Linwood. “I think it will.”
According to RealtyTrac data, sales of homes going through foreclosure dropped last year in every New Jersey county but one.
The firm says Cumberland County went from a state-lowest six in 2011 to 171 in 2012. There were 86 in 2010.
Larry DePalma, president of the Cumberland County Board of Realtors, questioned the 2011 figure as especially low and suggested it may be due to how the figures are reported.
Regardless, DePalma said, “shadow inventory” of properties coming onto the market is likely to affect prices for several years.
“People seem to be coming out and purchasing homes, but I don’t see the prices coming up. … I think it’s going to be a while,” he said.
RealtyTrac data show sales of homes going through foreclosure last year represented 11 percent of overall sales in Atlantic County, 4 percent in Cape May County, 10 percent in Cumberland County and 7 percent in Ocean County.
In New Jersey and in local counties, most homes going through the foreclosure process are sold in pre-foreclosure, rather than banks taking ownership of properties and selling them, RealtyTrac data show.
Blomquist said he believes the lengthy process in New Jersey may be influencing lenders to agree on short sales instead.
In a report last week, the National Association of Realtors said foreclosures in January sold for an average 20 percent below market value, and short sales for 12 percent below.
Blomquist said more distressed homes reaching the market may cause weaker home prices in the short term, but it is necessary for these properties to be absorbed and sold to homeowners to live in and maintain.
Albert Falciani, broker of record at AJ Falciani Realty in Vineland, works as a real estate-owned broker for various banks.
“What I see happening this year is the major banks are getting out of the residential real estate mortgage business, they’re selling off to hedge funds and companies like that, and those companies will either continue the foreclosure or getting a deed in lieu to move these properties through the system,” he said.
Contact Brian Ianieri: