Brooklyn foreclosed homes for sale under $300,000 are expected to swamp the New York housing market. Results of a recent market study showed that the foreclosure crisis has severely affected multi-family buildings located in low income neighborhoods in Brooklyn.
The study showed that 80 percent of repossessions filed in Brooklyn since last year was for mortgage loans below $1 million. Additionally, 51 percent of non-home mortgage loans were for residential buildings. The report also noted that majority of foreclosed units were located in low-income neighborhoods like East New York and Bedford-Stuyvesant.
Industry experts said that potential investors and homebuyers could expect a lot of bargain-priced brownstones in the coming months. Many of these three-unit or four-unit Brooklyn foreclosed homes for sale are priced below $300,000.
However, investors and homebuyers who are interested for good deals in prime communities and neighborhoods, like Park Slope or Carroll Gardens, may have to wait for a bit longer. A market report showed that 51 percent of mortgage loans (non-residential) that started foreclosure proceedings last year were for residential buildings. Meanwhile, 80 percent of mortgages were for properties below $1 million.
Industry experts said that low-priced neighborhoods are seeing a flood of foreclosures that sell way below the market price. For example, an eight-unit building located in Crown Heights could be had for as low as $400,000, which is half its original market price.
Furthermore, market data showed that 21 percent of walk-up apartments received foreclosure filings while 14 percent of filings were posted on mixed-use units and not more than 5 percent were filed on elevator apartment buildings, vacant land, retail and office buildings.
According to industry experts, more than 1,000 commercial properties are in some stage of foreclosure process in Brooklyn from September last year to September this year. For September 2009 alone, foreclosure proceedings on commercial properties totaled 70, a whopping increase from 25 foreclosures posted for the same month last year.
Experts said that based on lis pendens data, distressed sales may occur in Brooklyn in the next 20 months. They said that the flood of foreclosed small residential buildings in Brooklyn is a result of a great number of landlords buying into the housing market during the period of easy financing.
They said that because financing could be obtained easily, many of these small-time landlords bought any property they could lay their hands on.
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