Bits Bucket for January 25, 2011

Bergen County, NJ

Finally, let’s take a look at the Northeast. Bergen County is made up of fairly affluent communities which are located in northern New Jersey just west of the George Washington Bridge. Although home prices have dropped rather substantially since the peak, it has not been nearly as bad as in California or Florida.

RealtyTrac listed 615 repossessed properties as of July 16. Roughly 120 have been owned by the banks for more than a year without having been placed on the market. Two-thirds have been repossessed since the beginning of 2010.

Similar to the three other counties we have reviewed, many of the foreclosed properties in Bergen County are expensive homes. More than 100 are listed on RealtyTrac for $500,000 and above. More than 350 of these homes are listed for at least $300,000.

Are the banks withholding most foreclosed properties from the market as banks have in the other three counties? Absolutely. On July 16, there were only 31 repossessed homes on the market. A total of four were listed higher than $300,000. That is four out of more than 350 foreclosed homes in Bergen County that are listed on RealtyTrac for more than $300,000.

Bank Withholding of High-End Foreclosures from the Market is Nationwide

The four counties which we have looked at reveal a clear pattern on the part of banks to withhold most repossessed homes from the market and nearly all of those listed on RealtyTrac for more than $300,000. Is this occurring throughout the nation? Take a look at the following table and judge for yourself.

FORECLOSED HOMES ON THE MARKET

as of July 16, 2010

Location
Repossessed Homes
Repossessed Homes on the Market
Repossessed Homes Over $300K on the Market

Cook County, IL
28,829
1,292
29

Miami-Dade County, FL
10,858
983
11

Orange County, CA
6,270
227
85

Bergen County, NJ
615
31
4

Cincinnati, OH
2,914
184
1

Seattle, WA
946
51
8

Nashville, TN
1,350
102
1

Denver, CO
2,782
223
10

St. Louis, MO
2,323
312
2

Phoenix, AZ
10,613
1,144
16

Will this bank strategy keep the market for homes over $300,000 from imploding? Not a chance.

Fannie Mae (FNM) now requires an average down payment of 30% for securitized loans which it purchases or guarantees. According to Fitch Ratings, mortgage delinquencies for prime jumbo mortgages soared to 10.3% in May as underwater owners walked away in droves. That spells serious trouble for the five states which account for 2/3 of all outstanding jumbo loans – California, Florida, New Jersey, Virginia and New York. The problem goes well beyond these states, however. Housing markets throughout the United States for $300,000+ homes are in for rough sailing and prices are extremely likely to be headed for a real plunge.

The source of this article is the Real Estate Channel™ at http://www.realestatechannel.com. It is reprinted with their permission.

View the original article here