THE GADFLY-In Memory of Larry Angel: South Jersey Bank Owned Homes Glut The Market And Reduce The Median Sale Prices

BRIAN IANIERI Staff Writer
Banks are taking ownership of foreclosed homes with increasing regularity in South Jersey, as distressed properties stuck in a years-long pipeline now start to hit the market.

Atlantic, Cape May and Cumberland counties saw 254 bank repossessions in July, four times more than a year ago, according to California-based RealtyTrac.

Ocean County had 221 in July, up nearly fivefold from a year ago.

These were homes where the first written default notices started well before the region’s job struggles tied to Atlantic City casino closings.

The latest local figures reflect a national trend of more repossessions mainly because foreclosures in states such as New Jersey — which requires judicial review and once had a moratorium — can take years, said Daren Blomquist, vice president of RealtyTrac.

But another unsettling trend locally is the rise of properties just entering foreclosure with initial default filings.

All four local counties were up, with Atlantic and Cumberland both nearly doubling in July from a year ago.

In contrast, the nation’s rate is at the lowest it has been in a decade, he said.

“When we see a market like Atlantic County and several other counties in New Jersey, where those foreclosure starts are also increasing, that’s a bad harbinger of things to come because that is just properties falling into foreclosure recently,” he said.

Atlantic County’s default filings — one of the first steps in the foreclosure process — increased from 85 last July to 146 last month, RealtyTrac said.

Anthony D’Alicandro, owner of Coldwell Banker Argus Real Estate in Northfield, said more bank-foreclosed properties have been hitting the market. This is increasing inventory levels and dropping median sale prices, he said.

And the properties are selling to a combination of homeowners who will live in them and investors paying all cash, he said.

The median sale price for a single-family home in Atlantic County dropped by $23,900, or about 11 percent, in July from a year ago, according to New Jersey Association of Realtors data.

D’Alicandro expects to see price declines in the third and fourth quarters because of the bank-owned inventory.

Ultimately, the region’s economy and job creation will be behind a national comeback, and hopefully it can come at a time when more properties hit the market, he said.

“The growth in that turnaround is going to take time till we get to a really substantial increase in job creation and reduction in the unemployment rate. And hopefully if it intersects the same time as we get to the end of this backlog of foreclosures hitting the market. That’s when we’ll see values really start to turn around,” he said.

Nationally, bank repossessions in July reached their highest levels since January 2013, and he expects for them to remain high through the rest of the year.

Locally, some of the sharpest year-over-year increases were in Cape May and Cumberland counties, which each had seven-fold increases.

Cape May County had 41 in July, compared to six a year ago. Cumberland County had 69, up from 10 in July 2014.

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BIanieri@pressofac.com

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