New York Bound for Economic Recovery Despite Foreclosure Backlog

New York may be dealing with a heavy foreclosure burden, but the state is still bound for a strong economic recovery, according to a ""report"":http://portal.hud.gov/hudportal/documents/huddoc?id=HUDNYregspotlight.pdf released by ""HUD"":http://portal.hud.gov/hudportal/HUD and ""Treasury"":http://www.treasury.gov/Pages/default.aspx Friday.

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While foreclosures are improving across the country, New York has remained a concern due to its long foreclosure timeline and ""backlog"":http://dsnews.comarticles/lps-judicial-states-continue-to-hold-aged-foreclosure-inventory-2013-03-07 of distressed inventory.

""RealtyTrac, ranked"":http://www.realtytrac.com/Content/foreclosure-market-report/march-and-first-quarter-2013-foreclosure-market-report-7683 New York as the No. 1 state for its foreclosure timeline, which averaged 1,049 days in Q1 2013.

Despite the obstacle, a report from the Obama administration highlighted factors that show how the market has proven itself in other ways. For one, the New York metropolitan area is the largest job market in the nation, and the area has shown economic resilience through the Great Recession.

For example, New York experienced an average annual decline in jobs at a rate of 2.5 percent from Q2 2008 through Q4 2009 compared with the national average of 3.5 percent, according to the report.

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Post recession, jobs increased at an average annual rate of 1.5 percent from the Q1 2010 through the Q1 2013, compared with a rate of 1.3 percent for the nation.

Concerning housing, existing and new home sales have stabilized following a dramatic decline in 2006. Using data from CoreLogic, the report also noted home prices increased 20 percent faster than the national average between 2000 and 2006, but home prices fell by only 17 percent from the 2006 peak to the 2009 low. Meanwhile, the national peak-to-low decline sits at 31 percent.

The New York rental market is also among the tightest in the nation, with the vacancy rate at 3.4 percent in Q4 2012, up from 3.1 percent a year ago, but still well below the national rate, which went from 6.3 percent to 5.7 percent during the same time period, the report noted.

The state has also received a high share of mortgage assistance. According to the report, in April 2009 through the end of February 2013, nearly 231,600 homeowners received mortgage assistance in the New York metropolitan area.
The figure is more than eight times the number of completed foreclosures (27,200) during the same time period, according to the report.

""This relatively high ratio of mortgage assistance to foreclosures in the New York MSA since April 2009 (8.5 to 1 compared to 2 to 1 for the nation) is likely related to a relatively stronger local economy and lower unemployment rates over this time, making it easier to effect mortgage assistance,"" the report stated.

The report also noted New York City has been awarded millions in Neighborhood Stabilization Program funds, including $24.3 million to purchase and redevelop foreclosed and abandoned properties.