As if to add insult to injury, Hurricane Sandy has further devastated the New Jersey housing market. Homeowners that were struggling with housing debt before the hurricane may be suffering even more than they were before. Many families no longer have a habitable home, if any at all, to return to after the storm.
Prior to Hurricane Sandy, New Jersey had the second highest number of homes facing foreclosure in the United States. Nationally, about 3.3 percent of home mortgages are seriously delinquent or up for foreclosure. In New Jersey, that percentage is approximately 7.8 percent. The state requirement of judicial review in a foreclosure proceeding may be driving that percentage.
In addition, the unemployment rate in New Jersey remains one of the highest in the nation. The devastation of the New Jersey Shore may only increase the amount of people unemployed, if even temporarily. Further, the state’s reliance on the casinos of Atlantic City for tourist income is no secret. Until any damage to the casinos can be assessed, and the casinos reopened, that significant source of revenue is nonexistent.
It may not be surprising to see that many people and businesses may have to seek bankruptcy protection in the wake of Hurricane Sandy. Those who were struggling with debt before the storm may find refuge in seeking the protection of the court. Being able to obtain the breathing room needed to deal with mortgage and other debt may give people a sense of peace as they struggle to rebuild their lives. Getting a fresh start may be just what some homeowners need as they struggle to regain some sense of financial stability.
Source: Bloomberg Business Week News, “Sandy Batters New Jersey’s Struggling Housing Market,” John Gittelsohn, Nov. 1, 2012