ForeclosureS.com: Bubble Trouble May Be Brewing in the Big Apple

Business Wire,  Oct 24, 2005  

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SACRAMENTO, Calif. -- ForeclosureS.com (www.foreclosures.com), a northern California investment advisory firm specializing in distressed property reported today that certain micro-markets in the New York City metro area are at high risk of price declines that could lead to resurgence in mortgage defaults.

"The Nassau-Suffolk county region on Long Island is ranked by several economists as being second only to Boston as being at risk for price declines as the housing price boom cools down," said ForeclosureS.com (www.foreclosures.com) president, Alexis McGee. She went on to say that median home prices in Nassau County had reached more than $450,000 and in the five boroughs of New York City, median prices had climbed to more than $428,000. She added that when the down payment is factored in, 49% of incomes on Long Island were going to housing expense, while in New York City, the number was 74%. According to building industry and real estate consultant John Burns of Irvine CA.

"With prices and incomes so far out of whack," said Ms. McGee, "prices are much more likely to come down before incomes can catch up. That can lead to a rise in mortgage defaults, especially among homeowners that are over-leveraged with consumer debt on top of big mortgages." She pointed out that, while there was no national housing bubble, there were "bubblettes" in markets where price declines were probable in the near and intermediate future. She added, "Price adjustments have already begun in overheated coastal markets, but we're not seeing a housing crash. Instead, we're seeing a gradual return to realistic price levels. That's a good thing."

ForeclosureS.com (www.foreclosures.com) has been analyzing housing market trends and tracking foreclosure activity to assist investors since 1992. The company now serves six major markets across the U.S. and will begin providing lists of distressed property nationwide in November 2005.

"Our mission," said Ms. McGee, "has always been to help troubled homeowners by having our investor clients offer free advice on how to work out problems with their lenders, and, if necessary, help them, sell their way out of foreclosure. Either way, we help them avoid losing everything, including their credit, in a sheriff's auction."

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