The number of New York City home foreclosures jumped 8.55 percent from the second quarter of 2007 through the third quarter, which ended Sunday, according to a new report from PropertyShark.com. The third-quarter number was also up 64.24 percent from the same time last year, suggesting that the chickens of credit problems have come home to snugly roost in formerly invincible Gotham.
The outer-boroughs led the foreclosure surge. Staten Island foreclosures rose 64.81 percent from the second through the third quarter; and Queens and Brooklyn together comprised the biggest number of foreclosures among the five boroughs.
Manhattan foreclosures, a release about the report stated, remained rare. This isn’t surprising, given Manhattan’s much higher housing costs as compared to the four other boroughs; also, the co-op is Manhattan’s dominant form of for-sale housing, and most co-ops require a substantial downpayment (as much as 50 percent or higher of the apartment’s sales price). Thus cheap home financing, such as subprime mortgages, are difficult to come by in Manhattan and are, to begin with, rare.
In the outer-boroughs, on the other hand, predatory lending–and just plain irresponsible borrowing–have contributed to the spikes in foreclosures, much like in the rest of the country.