America has only recently recovered from the gut punch that was the Great Recession of 2008-09. After taking a standing-eight count, the autopsy revealed that the main cause for the economic meltdown was the bursting of the housing bubble.
Housing markets all over the country crashed with the influx of bad mortgages, and over the following couple of years, the foreclosure rates spiked virtually everywhere. If New York City is a leading indicator, could we be witnessing a new housing challenge?
There are a lot of positive financial news at the start of 2018. The stock market set many record highs in 2017, bonuses and charitable giving have been expanded with many companies, and many multinational corporations are considering repatriation of overseas money due to lower tax rates, which can further stimulate the economy.
With all of the positive news, that can be a bearish reality that might be under the waterline which may be overlooked. At the start of 2018, New York City is experiencing an increase in a disheartening statistic in the housing industry.
According to a recent report, the numbers from 2017 in real estate showed a disturbing trend in foreclosures within the city. Last year, there were more than 3,300 foreclosures (about nine per day) within the city, which turns out to be the highest level since 2009 and it is the third-highest level in the last 10 years. Overall, the foreclosure rate is nearly 60 percent higher than in 2016, and the number is nearly twice the number of just two years earlier, in 2015.
When breaking things down by borough, Staten Island saw the biggest leap in foreclosures in 2017, as the numbers spiked by more than 130 percent over 2016, while Brooklyn saw a 50-percent jump. Overall, Queens saw the most auctions in 2017, with nearly 1,300 scheduled (about 3.5 per day).
Since the housing crash of a decade ago, foreclosures in New York City, the numbers have gradually climbed since it bottomed out in 2012 with less than 950 foreclosures, which was half the number of the year before.
The foreclosure trend has been up the last several years, but it is difficult to see whether this latest spike is a sign of things to come. New York Gov. Andrew Cuomo warned recently that the new tax law may create more foreclosures in the coming years. It may take another year or two to see if 2017 is an aberration or whether it is the start of a new trend.