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Albany Real Estate: Foreclosure Crisis & Gov’t Response

This is a fascinating chart from the Wall Street Journal. We’ve known for awhile the Albany NY real estate market has been relatively insulated from the home foreclosure crisis. New York’s foreclosure rate is roughly 10% of the current homes for sale. By comparison, one of the worst states is Nevada – 50% of all homes for sale are in foreclosure.

As part of the WSJ report, the paper looked at the top foreclosure markets and the number of FHA, Fannie Mae, and Freddie Mac foreclosures for sale by state. According to the chart, less than 800 homes backed by FHA, Freddie, and Fannie that are in foreclosure are for sale in New York. As compared to over 4,500 homes in Atlanta, GA, 8,943 in California, and 5,767 Florida foreclosed homes that are for sale. 

New York’s numbers are lower than the actual number of foreclosures, in part because the New York courts instituted a new rule, which dramatically reduced foreclosure proceedings. I supported this policy decision by the Chief Judge of the New York Court of Appeals.

This leads us to two national stories from last week. As reported the President proposed a new Homeowner Loan Modification Program, allowing responsible home owners to refinance. This expensive proposition has a big hurdle to clear in the Congress. Second, the New York Attorney General has filed a lawsuit against the banks for methods and procedures relating to bundling mortgage backed securities.

You don’t need an economics degree to know fraud and malfeasance undermine the free markets. Many suggest, and I agree, these illegal actions were contributing factors to the housing crisis. So if mortgage brokers, banks, attorneys, or real estate brokers commit fraud, they should be prosecuted to the fullest extent of the law and all current market actors should take note.

Buying and selling Albany real estate is complicated for all of the details and individualized steps in the sale. Beyond the technical steps, the Albany NY real estate market, the Saratoga NY real estate market, and the surrounding Capital Region real estate market are all impacted by micro and macro market forces pushing and pulling on our regional economy.

At Monticello, we’ll sort through the national stories and trends, so you don’t have to. We will analyze the impacts on the Albany real estate market and surrounding Capital Region, while paying careful attention to the process and details. As always, if you have questions don’t hesitate to contact us.