Real estate agents in South Jersey are seeing fewer new foreclosure filings on homes, even as banks continue to shed their inventory of distressed properties a few at a time each week through county sheriff sales.
Atlantic, Cape May, Cumberland and Ocean counties saw fewer new foreclosure filings in August than in July. But the number of new cases still remains higher than a year ago.
“The trend is certainly very positive,” said Gregory Schoultz, of Upper Township, a broker with Townsends Inlet Realty Inc., based in Sea Isle City.
Cape May County had 34 new foreclosure filings in August, compared with 45 in July, according to RealtyTrac’s U.S. Foreclosure Market Report.
Atlantic County saw 196 new cases in August, down from 224 in July. This compares with 115 new filings in August 2012.
Schoultz said a survey of the Multiple Listing Service found just 201 distressed properties among the more than 4,000 for sale in Cape May County this week.
Unlike parts of the country such as Las Vegas, where entire neighborhoods of new luxury homes became ghost towns through foreclosure, South Jersey was not as adversely affected by the 2008 housing-market collapse, Schoultz said.
“We never had more than 3 or 4 percent of our listings in distress. In the headlines, we’re seeing 50 percent of recent sales being of distressed properties in places like Phoenix, Las Vegas and Miami,” he said. “People assumed we were affected in the same way, but we never had those issues that much of the rest of the country had.”
Nationwide, the number of new foreclosures is down significantly from a year ago — from 128,560 in August compared with 193,508 in August of 2012, according to RealtyTrac.
But the area still has a backlog of distressed properties.
Foreclosure rates in Cumberland County increased for the month of July over the same period last year, according to CoreLogic. The rate of foreclosures per active mortgage loans was nearly 9 percent in Cumberland and Atlantic counties — or more than three times the national rate.
Likewise, more people in Cumberland County are having trouble keeping up with their mortgages, according to CoreLogic. The mortgage-delinquency rate — the percentage of mortgage loans that were 90 days or more delinquent — increased slightly from 16 to 17 percent in Cumberland County from July 2013 compared to July 2012.
Atlantic County’s mortgage-delinquency rate has not changed from last year at about 16 percent.
Cape May County’s foreclosure rate was 4 percent in July while its mortgage-delinquency rate hovers around 7 percent, about the same as last year.
“New Jersey was one of the last states to feel the effects (of the 2008 mortgage crisis),” said Corinna Haberkern, an Absecon real estate agent and president of the Atlantic City & County Board of Realtors. “By the time it hit us, we already had some tools to use.”
Haberkern said the good news is buyers are moving more quickly to buy instead of waiting on the sidelines for economic conditions to improve as they have in recent years.
“They’re more confident. I’ve been able to persuade people to buy instead of rent. Why pay someone else’s mortgage?” she said.
Haberkern said it might take some time before the housing market sheds all of its distressed properties from the crisis that began five years ago.
“It’s going to be a while before we’re back to normal — until the numbers come back where they’re not underwater,” she said.
Rick Cammarano, of Lower Township, a broker with Century 21 Alliance in Wildwood Crest, said many banks continue to postpone sheriff sales.
“In some cases, they’re giving property owners more time. They’re trying to talk sellers into doing short sales,” he said.
These are sales in which the owner owes more on the mortgage than the home is worth on the market.
“Some of these properties have been listed (as distressed) for two years, but they’re still not hitting the market,” he said.
Banks that wait for better market conditions to list distressed homes run the risk of watching a vacant house lose value through neglect or storm damage, Cammarano said.
“I just put a property for sale in (Middle Township’s) Avalon Manor that’s been vacant for years,” he said. “They finally foreclosed on it. In the meantime, it was damaged by Hurricane Sandy and now has structural damage. You have to sell it as-is.”
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