Real estate, the residential sector in particular, made bleak headlines around the globe in 2008. Plunkett Research has been warning of a potential crash since 2006 in what was obviously an overheated market. (Plunkett Research) The residential construction industry has experienced one of the worst downturns in history. Rising interest rates, overbuilding, and the subprime mortgage meltdown of 2007 have contributed to this crisis without a clear resolution in sight. (www.premium.hoovers.com)
The number of houses entering foreclosure has increased dramatically over the past few years in communities across the country as a result of the boom in risky subprime lending and sharp drops in home prices in most metropolitan housing markets (New York University Furman Center for Real Estate and Urban Policy: Transforming Foreclosed Properties into Community Assets). By early 2008, housing market problems had spread to the rest of the economy. The sharp drop in home building, the turmoil in the credit and stock markets, and the impact of falling home prices on borrowing and consumer spending all contributed to the slowdown. Mounting job losses in the first quarter of 2008 added to the misery, raising the risks of even sharper price declines and higher delinquencies ahead (Joint Center for Housing Studies of Harvard University: The State of the Nation’s Housing 2008).
Data released for the first quarter of 2008 shows a larger foreclosure problem is facing New York City. According to Realty Trac, an online property tracking site, New York City has seen an overall 34% increase in the number of foreclosure filings compared to the same period last year.All of the boroughs are facing net increases in the number of foreclosure
There were 918 first time foreclosures scheduled in New York City for the first quarter of 2008, a 51.4% increase in new foreclosures over the fourth quarter of 2007, and an increase of 65.7% over the first quarter of last year. “These are the highest quarterly levels of foreclosures we have seen in the New York City metro area since we began tracking them; there is substantial activity in Queens,” according to Ashleigh Rose Clark, data ac-quisitions manager at PropertyShark.com (PropertyShark.com Foreclosures Report First Quarter 2008).