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Sheriff Auctions and Foreclosures Hit Commercial Real Estate in NJ

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By : John Cutts    99 or more times read
The number of commercial properties falling under foreclosure and sheriff auctions remained high in New Jersey last year. Although foreclosure-related filings were down for the sector, analysts stated that it will take some time for the market to stabilize as more foreclosures are expected this year.

Figures for commercial Newark repossessed properties and foreclosed commercial real estate in other areas of the region are expected to rise this year as more borrowers fall into default. As of January 2011, delinquent commercial loans that were bundled into securities have reached 9.34%. This is a huge jump from the 0.38% recorded just three years ago. Realtors reported that a steady flow of foreclosures in the commercial property market is happening and it seems that the trend will continue for the rest of 2011.

New Jersey repossessed homes posted higher numbers last year compared with previous periods, while commercial foreclosures posted a slight decrease. In 2010, a total of 1,446 foreclosure-related filings were issued to commercial properties in the state, down from the 1,471 total recorded in 2009. However, the figure is still high compared with 2006, when only 173 filings were issued to commercial structure owners.

The number of commercial properties that will be foreclosed on or offered at sheriff auctions this year is expected to be even higher, judging from the sector's delinquency rate during the first month of the year. Realtors stated that selling distressed commercial properties has become more difficult this time around as the processing of foreclosures hit legal snags last year.

Despite the expected increase in repossession homes and foreclosed commercial properties, analysts stated that the state's economy is doing well. They also expect the commercial and residential market to improve slowly during the year as more lease agreements are made and sales improve in the latter part of 2011. They added that recovery will be slow and that it will take some time for buyers to gain confidence in the commercial market.

Nationwide, analysts believe that the commercial property industry is showing signs of stabilizing and they expect fewer properties to end in foreclosure or at sheriff auctions this year. In New Jersey, however, analysts stated that distressed commercial properties need to work through the system first before a speedier recovery can get going.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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