Brooklyn Nabes Near Top of Foreclosure List
Bedford Stuyvesant and Bushwick have the highest foreclosure rates in Brooklyn, according to a recent study by the New York University Furman Center for Real Estate and urban Policy. Averaging 51 foreclosures per 1,000 single family homes, the two Brooklyn nabes trail only Washington Heights in Manhattan and Fordam in the Bronx in the citywide…
Bedford Stuyvesant and Bushwick have the highest foreclosure rates in Brooklyn, according to a recent study by the New York University Furman Center for Real Estate and urban Policy. Averaging 51 foreclosures per 1,000 single family homes, the two Brooklyn nabes trail only Washington Heights in Manhattan and Fordam in the Bronx in the citywide rankings. More than a third of Bed Stuy and Bushwick homeowners spend at least 60% of their gross income on housing. At this level, these folks are only a missed paycheck or two away from being unable to make their mortgage payments. Not surprisingly, gentrification is the posited cause of high foreclosure rates, as longer-term residents unable to afford rising rents stretch to purchase a home. Seems to us that the banks that are making these loans have some level of responsibility as well.
Feeling the Pain of Foreclosures [NY Daily News]
I’ve managed to save up roughly $30878 in my bank account, but I’m not sure if I should buy a house or not. Do you think the market is stable or do you think that home prices will decrease by a lot?
Gentrification is not the cause of these peoples problems. From what i gathered in the article most of these people have been in their homes for years and purchased their homes at very low prices relative to today. The couple in the article bought their home 8 years ago for 150K. A 145K 30 year mortgage @ 8% runs about $1050/month. For someone making $2500/month, this represents ~42% of income(within bank lending guidelines).
Inflation not gentrification is killing these homeowners. The variable costs for homeowners have steadily increased. Homeowners insurance is UP. Property Taxes are UP. Heating expenses are UP. Utilities are UP. From personal experience, my variable cost have more than doubled in the past 8 years. The rise in the variable costs(read inflation)is putting the screws to these middle and lower income homeowners who do not have the necessary reserves. The scary thing about all of this is many people think the foreclosure phenomenon will only confined to middle and lower income homeowners. Wrong. Wrong. Wrong.