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August 22, 2007
Report: Brooklyn Foreclosures Up 51 Percent
The national foreclosure epidemic has definitely made its way to the city, and Brooklyn property owners are among the hardest hit. A study from RealtyTrak.com finds that the number of New York City homes in foreclosure increased 55 percent in July compared to last year, with Brooklyn foreclosures up 51 percent. There were 875 foreclosure filings in Brooklyn during July, compared to 581 in July of last year. (Among the five boroughs, Queens saw the biggest increase, with a 126 percent jump, while the Bronx’s numbers were more or less in line with Brooklyn’s.) Although the pace of New York City foreclosures still lags behind the national rate, which was up 93 percent, the report seems to be a clear indication that the city—and the boroughs in particular—won’t be exempt from the subprime meltdown affecting the rest of the country. Earlier in the week, we linked to an article that tied the fortunes of “sought-after” Brooklyn with Manhattan’s resilient real estate market; this report looks like further evidence that Brooklyn’s market is increasingly a story of haves and have-nots.
Sharp Jump Is Seen in Local Foreclosures [City Room]
NYC Foreclosures Rose 55% in July [Crain's]
N.Y. Foreclosure Frenzy [NY Post]
Manhattan Real Estate In a World of Its Own [Brownstoner]
Brooklyn Foreclosures Up Modestly in Second Quarter [Brownstoner]
Photo by Jimmy Legs
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Comments
Holy cow. 875 in one month versus 581 all of last year? Armageddon in coming.
Posted by: guest at August 22, 2007 10:15 AM
Er... there were 581 in July 2006. While 'stoner's language choice didn't make that perfectly transparent, it wasn't too hard to intuit.
Posted by: EJ at August 22, 2007 10:41 AM
Uh, Daily News implies that it's even worse for the city. A whopping 93% from July '06 to July '07. Article does not break down Brookyn though. Could that be worse too?
http://www.nydailynews.com/money/2007/08/22/2007-08-22_foreclosures_zoom_93-2.html
Posted by: guest at August 22, 2007 10:54 AM
Chucky's with ya 10:15.
"Anyone who thinks New York City is going to escape the subprime crisis is just plain wrong," said Schumer. "The foreclosure storm that's been brewing elsewhere in the country has now made its way to New York." (Daily News)
Posted by: guest at August 22, 2007 10:59 AM
I think Brwonstoner is finally getting it that NYC is in no way immune to the mortgage meltdown. A couple of weeks ago Brownstoner seemed to have been oblivious of the problems in the market preferiing instead to talk about cabanas selling for $350k. I guess now that it is in our backyard, we can't pretend that NYC is immune anymore.
Posted by: guest at August 22, 2007 11:05 AM
Schumer is a political fool, but I digress... Prime and semi-prime brownstone brooklyn hasn't, and isn't about to see massive forelosures.
Posted by: BrooklynCouch at August 22, 2007 11:12 AM
The Daily News article is including the entire country in the 93% figure. It isn't time to panic - yet.
The new financing tricks worry me - I went through the last big downturn and even with 25% down was underwater but people chose to stick it out because we had money invested and it took six years before I could sell for what I paid. I wonder if people who have bought with little or no money down will be more inclined to walk away if things become rough?
Posted by: guest at August 22, 2007 11:13 AM
Cabanas are still selling for 350K, 11:05.
To suggest otherwise makes you sound quite ignorant. These problems are quite isolated. While 875 foreclosures in a month is 875 too many, it certainly doesn't reflect a borough of over 2 million people. Come on now. Most of these foreclosures are in Brooklyn neighborhoods that none of us would even be in after dark, so please try to have some common sense.
Brownstoner COMMENTS on news, he doesn't write it. Are you suggesting by your cabana comment that all threads from here on out should be exclusively about the subprime market woes and about those losing their homes?
you sound like a ball of fun.
Posted by: guest at August 22, 2007 11:14 AM
I just don't understand all this foreclosure nonsense. The 10-year Treasury (upon which most mortgage spreads are based) hasn't been this low, even with the recent increase, since the mid-1960's. (http://www.briefing.com/morningstar/mtgdata/t10.htm)
If a 2% increase on your mortgage/HELOC is going to cause you to go into foreclosure, you had no business:
1) buying the house in the first place, or
2) taking out some crazy HELOC/2nd Mortgage, etc. to spend on a big-screen TV, etc.
I want a story that asks a few hundred people in foreclosure what they did with the PROCEEDS from their refi's. And asks how many were laid off versus how many were irresponsible with their finances, took some "easy" money, spent it and wound up in trouble.
This "crisis" is not at all different from the credit card "crisis" where fools take easy & expensive credit and blow themselves up into bankruptcy.
Were there predatory lending practices? Sure, but where’s that good 'ol American self-reliance, responsibility and self-sufficiency (not to mention basic home economics) when you need it?
I feel badly for those that lost their homes due to job loss BUT we’re not in a recession and NYC hasn't seen major job losses (yet) so I think the major reason for the foreclosures so far is financial irresponsibility.
Again, what did all these long-time owners who took out refi's or HELOC's SPEND the proceeds on?
While I'm at it, why are we one of the only developed nations with a NEGATIVE savings rate?
Ok, ranting over … I'm ready for the inevitable flaming.
Posted by: Mr Joist at August 22, 2007 11:32 AM
"I just don't understand all this foreclosure nonsense. The 10-year Treasury (upon which most mortgage spreads are based) hasn't been this low, even with the recent increase, since the mid-1960's."
It is low but a mortgage isn't a treasury. Hello! So true (non government guaranteed) mortgages above 417k include a WHOLE PILE OF RISK. Their rates are therefore a huge spread to the 30 year. This risk had been unaccountably ignored by the markets for several years and now things are normalized in that arena. This isn't a storm you wait out, it is reality. You SHOULD be paying 8% to borrow a jumbo loan for 80% of the value of your property! what on earth was the banking industry thinking that they could loan at small slice above 30 year rate for an 800k 80% or more LTV loan?
House prices are declining of their bubblicious highs and so they should - average american incomes have been static at 50k per year, for five years!
With declining values it is right and proper that mortgage underwriters demand full docs, refuse 90% loan to value, and ask for a big spread on treasuries to cover risk of default in a market that might go south faster than it already is.
cabanas selling for 350k are nothing to do with the real world, those idiots doing lines of coke on top of a dumbo loft building are competing with each other only. Like the road runner cartoon, they have shot off a cliff and don't realize there is no foundation to their values.
Posted by: guest at August 22, 2007 11:52 AM
Hey 11:14
No need to attack the earlier poster or each other. The market will decide and howevever much we try to deny it, the crash(correction whatever you call it) is now here.
Posted by: guest at August 22, 2007 11:54 AM
For those interested, here's a link to an informative article " Brooklyn's Serious Mortgage Foreclosure Outbreak" from "The Gownanus Lounge" 3/29/2007... the article includes a map of foreclosure patterns in Brooklyn 2006...
Posted by: bren at August 22, 2007 12:01 PM
oops! here's the link:
http://gowanuslounge.blogspot.com/2007/03/brooklyns-serious-mortgage-foreclosure.html
Posted by: bren at August 22, 2007 12:03 PM
"...what did all these long-time owners who took out refi's or HELOC's SPEND the proceeds on?" - 11:32
http://preview.tinyurl.com/jh86f
AND
http://tinyurl.com/yo3bvg
In words, consumer spending to ensure that, as you say, "we’re not in a recession and NYC hasn't seen major job losses" from the dotcom bust.
Posted by: guest at August 22, 2007 12:04 PM
"...what on earth was the banking industry thinking that they could loan at small slice above 30 year rate for an 800k 80% or more LTV loan?"
They were thinking fees and "relay race" as they passed the baton, uh...I mean bad loan, down through the greedy hands of the securitization wonder machine (marked to model).
Posted by: guest at August 22, 2007 12:13 PM
It needs to be made clear that this is no longer a "subprime mortgage crisis" but a global credit crisis. And that most certainly does affect this city in profound and monumental ways.
Wall Street bonuses down.
Jumbo rates up.
Foreign investment out.
Job losses across finance and mortgage industries.
Just saying...
Posted by: guest at August 22, 2007 12:15 PM
Wow! The consensus of this bloggership done changed! Majority doom and gloom. As recently as a year ago, you were labeled a 'troll' if you even implied the concept of a housing bust in Brooklyn.
Posted by: guest at August 22, 2007 12:22 PM
Remember, you buy once there is doom and gloom (although not necessarily at time zero + 1 second thereof).
Posted by: BrooklynCouch at August 22, 2007 12:26 PM
I'd hate to see an update of that chart at 12:03 for 2007. But not really.
Posted by: guest at August 22, 2007 12:27 PM
People believe what they need to believe and do not let facts confuse them.
I know one thing, which is that there is as much money to be made in a bust as in a boom provided you are not the one who goes bust.
Posted by: guest at August 22, 2007 12:34 PM
11:32 is on point.
Posted by: guest at August 22, 2007 12:53 PM
The inventory in brownstone Brooklyn is so miniscule, I really don't think this is going to have much of an impact in prices other than perhaps holding steady for a while to see where things go.
Two broker friends said they've seen perhaps a 10% drop in business over the past month, but that may have more to do with it being August than it does anything else. They said prices are holding and things are still going fast in the prime areas of Brooklyn.
One told me about an open house in Park Slope this past weekend with almost 60 people coming through.
So people are still shopping, it would seem.
Posted by: guest at August 22, 2007 12:55 PM
"cabanas selling for 350k are nothing to do with the real world, those idiots doing lines of coke on top of a dumbo loft building are competing with each other only. Like the road runner cartoon, they have shot off a cliff and don't realize there is no foundation to their values."
This IS the real world in New York. Lots and lots of people have insane amounts of money here. I understand that you and I might not, but I am fully aware of the wealth that is floating around this city, and to deny that fact is silly. Cabanas don't have anything to do with values any moreso than people spending that amount of money to restore 100 year old woodwork. People have different priorities in life.
Posted by: guest at August 22, 2007 12:59 PM
Brownstone and brick rowhouses were mass produced over the course of fifty years. There are thousands upon thousands of these aging buildings lining the endless streets of brooklyn. I do not believe the supply is miniscule. There are probably more old rowhouses in Brooklyn than split levels in NJ and LI combined.
Posted by: guest at August 22, 2007 6:44 PM
your baiting tricks are too transparent, 6:44.
i mean, really...
Posted by: guest at August 22, 2007 9:23 PM
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