LI's 4Q foreclosures down from year ago
Fewer sales of foreclosed homes on Long Island suggest a state bottleneck over “robosigning” fallout and may mean distressed properties will take longer to sell. Above, a foreclosed home in Islip. (Feb. 9, 2012) Credit: Getty Images
Foreclosed homes constituted 8.2 percent of home sales on Long Island in the fourth quarter -- a decline from 11.2 percent a year earlier, and far less than the 24 percent of sales in the United States as a whole.
The data, from RealtyTrac, a foreclosure listing firm, illustrate the long time it takes for banks to foreclose on homes in New York -- in part due to fallout from the "robosigning" foreclosure documentation scandal -- and suggest the Long Island housing market is a long way from recovering.
"There is a bigger bottleneck in New York than in many other states," said Daren Blomquist, vice president of RealtyTrac, "because of the judicial process there," meaning that foreclosures must get court approval. He also cited "aggressive actions on the part of courts and statements by the Attorney General there making lenders much more cautious to proceed with foreclosures."
He said the bottleneck, in the short term, is "probably keeping home prices more stable. But the downside is that it will probably take the New York market longer to stage a true recovery, until these distressed properties are absorbed."
RealtyTrac estimated New York had 35 months' supply of foreclosed homes that will eventually need to be sold. Foreclosure sales were 5.7 percent of all sales in the state in the fourth quarter.
Foreclosure sales were 7.5 percent of Nassau County home sales and 8.75 percent of Suffolk County sales, RealtyTrac said.
In Nevada, 56 percent of all home sales were foreclosures. In California, such homes were 43 percent of total sales, and in Georgia, 39 percent.
Foreclosure sales on Long Island may be accelerating this year. A broker who specializes in foreclosures, David Guzzetta, owner of American Way Real Estate in Port Jefferson, said sales of foreclosed homes have sharply increased in 2012 as a percentage of total sales.
"Banks were shut down, they were frozen from moving forward with foreclosures. Now their systems are up and running," he said.
Based on his recent experience he predicted that the sales percentage rate for foreclosures will double in the first few months of 2012 and will double again by midyear.
