New York City Housing Crisis Not Over Yet

New York City Housing Crisis Not Over Yet

07/29/2013 BY: KRISTA FRANKS BROCK

New York City followed the nation’s overall boom-bust cycle during the housing crisis and now appears to be on the mend—like much of the nation. However, some parts of the metro area are not yet experiencing the housing recovery that is making headlines in other parts of the nation, according to a report from New York University’s Furman Center for Real Estate & Urban Policy.

New York home prices fell 15.7 percent since 2007, according to the report. Certain sections of the Big Apple fared worse than others. The northern Bronx, southeast Queens, and northeastern Brooklyn took the worst hits, while Manhattan homes held their ground somewhat better.

Currently, “prices remain well below their peak and close to 2004 levels in all boroughs but Manhattan,” the report reads. “By contrast, Manhattan experienced a relatively modest and short-lived downturn, and prices have returned to their peak levels.”

The price slump in much of the city is not the only indicator that the major metro is not in full recovery mode. “Pre-foreclosure notices and underwater loans indicate that the crisis is not over,” the researchers state in their report.

While foreclosure notices declined 2 percent between 2011 and 2012, they are still elevated in most of New York’s boroughs, according to the report.

With more than 30,000 foreclosure notices in 2012, Queens holds more than 10 percent of the state’s foreclosure notices. Queens had 4 percent more foreclosure notices in 2011.

The Bronx was the only neighborhood where foreclosure notices increased from 2011 to 2012, and they increased by only 1 percent.

Additionally, 15.4 percent of borrowers with outstanding mortgages in New York City were underwater in 2012. As with price depreciation and foreclosure notices, Manhattan residents fared better. Twelve percent of Manhattan mortgagees were underwater in 2012, while in the Bronx 26 percent of mortgagees were underwater.

The crisis did not leave renters any better off, according to NYU’s report. While home prices fell, rents rose 8.5 percent from 2007 to 2011.

“Indeed, New York City renters continued to face severe affordability challenges in 2012, with stagnant incomes and rising rents,” according to the report.

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