In the last few weeks, two interesting pieces of news appeared for those interested in America’s housing debt situation. Taken together the articles might affect people who are considering filing New York bankruptcy.
One, the Census Bureau’s Housing Vacancy Survey published its fourth quarter 2013 numbers (PDF) as well as its annual estimate of households that year (Table 8a). Apparently, the rate of new household formation last year fell by half to what it was in the 2009-2011 period, and the homeownership rate has fallen to its 1996 level. Fewer new households implies fewer new homebuyers. Worse, over the last few years, the Census Bureau’s measurement of homeownership for people under 35 has fallen by four percentage points since 2000; for the 35 to 44 crowd, it’s dropped eight percent.
Two, according to one real estate analyst, a huge number of homes in the New York City metro area have been served pre-foreclosure notices over the last four years but have not been repossessed. The delinquency rate for homeowners with non-government-guaranteed mortgages in the New York City, northern New Jersey, and Long Island area rivals that of Miami, Orlando, and Tampa-St. Petersburg. The analyst’s numbers appear credible, and it helps his case that the New York State Department of Financial Services has inconveniently chosen not to update its analysis of pre-foreclosure filings.
The fear is that if there’s no one creditworthy enough to buy the existing housing stock, and if the institutional investors who bought houses with an eye toward renting them begin selling off their assets, home prices would drop precipitously. New York City homeowners would be thrown deeper into negative equity, and banks would begin repossessing homes of delinquent borrowers, triggering a crisis.
It should be emphasized that the first piece of news, the Census Bureau data, gives tells a more credible story of what’s going on in the housing market than the analysis of state-government data that the state apparently doesn’t provide. If the hypothesis is true, and you happen to be a New Yorker who’s underwater on his or her mortgage, then now is the time to discuss the situation with a New York bankruptcy lawyer. A delay would mean a reduced price at a short-sale or a more difficult foreclosure.
For answers to more questions about underwater homes, bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney Brooklyn NY Bruce Weiner for a free initial consultation.
