New Jersey now has the second-highest rate of home foreclosures in the US, at around 8% (1 in 12) mortgages -- worse than Nevada (where Las Vegas was hit so hard by the credit crisis) or any other state except Florida, writes Moody's analyst Vito Galluccio, citing data from the Mortgage Bankers' Association. (By contrast, about 4% of Pennsylvania homes are in foreclosure, or about 1 in 25.)
And it's getting worse: The percentage of "seriously delinquent" mortgages in New Jersey rose again in the second quarter, "despite declining nationally" and in other hard-hit states (such as Florida and Nevada).
NJ foreclosure rates will stay high -- not just because of teacher layoffs due to taxpayer refusal to pay higher property taxes, or casino layoffs from Atlantic City's uncompetitive betting halls -- but because New Jersey is one of the states that forces foreclosure actions through the courts, "a slow and cumbersome process" that results in "steep discounts" which "threaten to keep real estate prices down for years."
As prices stay low, more homeowners appeal their tax assessments, further pressuring municipal budgets and tax rates.