May 16th, 2022 by MG
We’re seeing this more and more – the benefits of owning a house are no longer outweighing the benefits of renting instead. With high profile folks like Jose Canseco electing to be foreclosed on rather than make uncomfortable payments or the folks who are losing their homes in The Hamptons due to the North Eastern financial crisis, more folks are finding a hard time convincing themselves it’s better to stay in bad loan.
Now, you have to ask “bad for whom?” and then it becomes a personal issue. Some folks will toss ethics in there and say that walking away is unethical and to a point I agree. But the “just business” nature of contracts also means that if you don’t make payments, the bank never feels unethical by taking your house back either.
So there’s definitely two sides to the coin.
Nassau’s foreclosure-related filings last month jumped 113 percent from a year ago, higher than the national average increase of 65 percent, according to RealtyTrac, a California-based online market for foreclosures.
The county’s 14 percent increase in filings from March to April this year also exceeded the national, month-to-month average increase of 4 percent, the report said. Nassau last month had 502 filings, which include default and auction notices — 442 in March and 236 in April 2007, according to RealtyTrac.
Broker David Farrell, who on Saturday took house hunters on his first Long Island Foreclosure Tours in Nassau, said the higher figures reflect the bigger price increases in Nassau home sales during the boom years. Suffolk’s rise in prices had been tempered by new-home construction, but Nassau has less buildable land left, he said.
People who bought high during the hot market of three and four years ago now see their property values falling and are walking away from houses with mortgages worth more than their homes, Farrell said.
“We don’t have massive job losses, nothing along the lines that would trigger this,” he said. “We have a fact where people now say ‘I have a house. I paid $600,000 for it, and my next-door neighbor is paying $429,000. What am I doing here?’
“Last year at this time, people would ask you about foreclosures and you’d say ‘Yeah, there are dozens of foreclosures, but there’s no use to them because they’re basically priced the same as the house next door.’ Now, all of a sudden, it’s insane. We went to a house in East Meadow, where the house next door was the identical split at $549,000 and we had the foreclosure to the right of it and it was $429,000.”
Suffolk’s 734 filings in April was a 43 percent jump from the 513 a year ago and 6 percent jump from the 695 in March, RealtyTrac reported. In Queens, the filings grew 22 percent in a year — from 761 to 926 — and 11 percent from March’s 836 filings.
Remember folks, the housing bubble is more than median prices and how many days on market a house sits for. Issues and behaviors will also continue to shape the decline and influence the pace of any upcoming recovery.