//After-effects of recession: Foreclosures increase 35% on Staten Island

After-effects of recession: Foreclosures increase 35% on Staten Island

In what some real estate professionals are referring to as part of the “after-effects” of the recession, is a spike in the sale of foreclosures across Staten Island.

In fact, there has been a 35% increase in the sale of bank-owned properties from 2017 to 2018. And the year prior, from 2016 to 2017, there was a 30% increase in the sale of foreclosures, according to the Staten Island Board of Realtors.

This may be due to banks recognizing the strong sellers’ market over the last few years and using it as an opportunity to sell foreclosures to capture a historically higher price for them.

Staten Island becoming unaffordable

Adobe Stock

“We are still seeing the after-effects of the Great Recession; some people who had modified their home loans with low down payments have now seen their payments reset, and still cannot afford their homes,” said Frank J. Rizzo, president and broker of Cornerstone Realty in Annadale.

“We have started to see an uptick in the number of foreclosures on the Island after a multiyear decline in foreclosure filings. Lenders have started to get more aggressive, and the courts have started to become more efficient in moving the cases along,” he added.

According to SIBOR, the total number of bank-owned properties for sale through the Staten Island Multiple Listing Service was: 2016 — 83 total — North Shore, 52, Mid-Island, 17, South Shore, 14; 2017 — 109 total — North Shore, 52, Mid-Island, 27, South Shore, 30; and 2018 — 147 total — North Shore, 76, Mid-Island, 35, South Shore, 36.

Another reason for the rise in foreclosures is the increase in interest rates.

“In 2016, the average fixed rate sat at approximately 3.65%, in 2017 3.99% and in 2018 4.54%,” said James Prendamano, vice president and CEO of Casandra Properties, which has two Island-based offices.

“As the cost of money increased, payments went with it. Many people are still stuck in these adjustable rate mortgages and unfortunately, although these rates are low in a historical context, those are very significant increases to be absorbed over a two-year period,” he added.

This, combined with the jump in property taxes, is hurting Staten Island homeowners.

“When you couple these significant increases in mortgage payments with the overall increase in our real estate taxes, insurance costs, food costs, etc., it is becoming more and more difficult to make ends meet,” said Prendamano.

“The unfortunate reality is it becomes more expensive to live in the New York area every year, and many of the pay increases are not commensurate with the cost of living increases. At the end of the day, the result sadly is more foreclosures,” he added.

Tribune Content Agency

Original Source