Eliza Theiss Key Takeaways:
- NYC first-time foreclosures surge 146%, fueled by Queens case increase
- Citywide lis pendens ticked up 7% quarter-over-quarter)
- Zip code 11434 in Queens claims highest concentration of foreclosures with 13 cases
- Queens foreclosures surge 300% quarter-over-quarter, reaching 124
- Manhattan foreclosures drop to a total of just eight first-time filings
- The Bronx logs no foreclosures in Q2 2022
- Brooklyn claims highest number of pre-foreclosures with 508 lis pendens
- Staten Island records 50 new foreclosure cases after two years of non-existent activity
Less than six months since the January 15 expiration of the COVID-19 Emergency Eviction and Foreclosure Act of 2020, foreclosures in New York City (NYC) have been slowly climbing but remain far from pre-pandemic levels. For comparison, in Q1 2020 — the last full quarter of foreclosure activity in NYC before the moratorium was passed — there were 688 first-time foreclosure filings, whereas there were only 199 new foreclosures during Q2 2022.
To get a better understanding of how the foreclosure market has evolved since the moratorium was lifted, we compared foreclosure activity in the second quarter of this year to that of the first quarter. Additionally, because Q2 2020 and Q2 2021 were affected by the moratorium, we compared Q2 figures from the current year to Q2 2019 — the most recent second quarter in which the pressure of the pandemic played no role.
Overall, this analysis showed a clear trend of increasing activity in the post-moratorium NYC foreclosure market, with the second quarter of this year 146% more active than Q1. However, when compared to Q2 2019, it’s clear that the foreclosure segment of the industry will not return to pre-COVID levels of activity, with Q2 2022 recording 77% fewer first-time filings than the same period in 2019.
Queens Fuels NYC Q-o-Q Foreclosure Increase with Help from Staten Island
After Q1 2022 proved to be the slowest quarter for the foreclosure sector — aside from the timeframe when the moratorium was active — Q2 was bound to close with higher figures. As such, Q2 recorded 199 first-time foreclosures compared to Q1’s 81, resulting in a 146% Q-o-Q increase across the five boroughs. Notably, that increase was fueled primarily by Queens — where foreclosures quadrupled quarter-over-quarter(Q-o-Q) — as well as Staten Island, where the number of foreclosures went from zero in Q1 to 50 in Q2.
Meanwhile, lis pendens were also on the rise in NYC: Quarter-over-quarter figures ticked up 7% to hit 1,040 pre-foreclosures across the five boroughs, with nearly half (508) recorded in Brooklyn. Pre-foreclosure activity was also closer to pre-pandemic figures than actual foreclosures. Specifically, pre-foreclosure activity in Q2 2022 was down 66% compared to Q2 2019, whereas foreclosures were down 77%.
Manhattan Foreclosures Drop Q-o-Q, but Lis Pendens More Than Double
The end of the foreclosure moratorium resulted in 12 first-time foreclosures in Q1 2022, but that figure slid to just eight during the second quarter of this year, placing Manhattan last in foreclosure activity among the five boroughs, with the exception of the Bronx which had no foreclosure activity at all throughout Q2.
In contrast to eight foreclosures that were recorded between April and June of the current year, there were 26 foreclosures in the borough in Q2 2019, meaning activity was down 69% in Manhattan this past quarter.
And, while that certainly represents a significant difference, it’s far from the most dramatic comparison between pre- and post-pandemic figures. For instance, Brooklyn foreclosures were down 93% in Q2 compared to the same period in 2019.
Notably, of the borough’s eight first-time foreclosures, just two were logged in the same zip code — 10005 — which covers some areas around Wall Street and the Financial District.
Conversely, Manhattan pre-foreclosures rose fast during the second quarter, totaling 63 lis pendens for a 110% Q-o-Q increase. At the same time, Manhattan’s pre-foreclosures during Q2 2022 were only 48% below Q2 2019, bringing Manhattan closest to pre-pandemic levels of the five boroughs.
Queens Foreclosures Surge 300%, Drive Citywide Case Increase
Foreclosures rose fastest in Queens during Q2, surging 300% Q-o-Q to a total of 124 first-time cases. Not only was that the highest number of foreclosure filings in a single borough, but it also represented a 62% drop in cases compared to Q2 2019 — the lowest rate of contraction in the city. Additionally, that surge in Queens was also the main driver of the city’s overall increase in foreclosures compared to the start of the year.
Queens also claimed the highest concentration of foreclosures in one zip code. Specifically, zip code 11434 in the Jamaica, St. Albans and Rochdale area was the setting for 13 unique, first-time foreclosures.
However, lis pendens filings moved forward much more slowly: Quarter-over-quarter, Queens pre-foreclosures ticked up just 2%, going from 226 in Q1 to 230 in Q2. And, compared to the same period in 2019, there were 78% fewer foreclosures in Queens in Q2 2022 than there were in Q2 2019.
Brooklyn Totals 93% Fewer Foreclosures in Q2 2022 Than in Q2 2019
Quarter-over-quarter, foreclosures slowed in Brooklyn, as well, coming in 43% below Q1 figures with 17 first-time filings. Of those, three were logged in East New York and some parts of Bushwick, concentrating in the 11207 zip code.
And, although Brooklyn recorded 17 first-time foreclosures during Q2 compared to Manhattan’s eight, it was actually Brooklyn that recorded the highest drop in foreclosure activity compared to Q2 2019, coming in 93% below its 242 cases from three years ago.
Yet, Brooklyn lis pendens were closer to the pre-pandemic levels in Q2 2022 than its foreclosure rate was. In fact, Brooklyn had the highest number of unique cases among the five boroughs in the second quarter. Specifically, the borough totaled 508 lis pendens between April and June 2022 — a near-negligible 1% more than during the first three months of the year and 51% fewer than in Q2 2019.
In the Bronx, 2nd Quarter Passes with 0 First-Time Foreclosures
Despite the Bronx’s eight first-time foreclosures filed in the first three months of 2022, no first-time cases were filed in the second quarter. For comparison, there were 96 cases in the borough in Q2 2019.
And, as far as pre-foreclosure activity, the Bronx logged 70 cases between April and June — 82% fewer than the 392 lis pendens filed in Q2 2019. As a result, the Bronx was the furthest of all five boroughs from its pre-pandemic pre-foreclosure rate.
Staten Island Logs 50 First-Time Foreclosures in Q2 After Just 1 Case in 2 Years
In the two years (or eight quarters) since the pandemic hit NYC and foreclosures were suspended, Staten Island recorded only one case — back in Q3 2021 — while the other four boroughs saw a handful of foreclosures during the same period. In fact, even after the moratorium was lifted earlier this year, Staten Island recorded zero first-time foreclosures in the first quarter of the year.
The second quarter, however, totaled 50 new foreclosure cases, representing close to one-third of the 159 logged during Q2 2019. In particular, of those 50 first-time cases, eight were concentrated in the neighborhood of Mid-Island, making zip code 10314 the epicenter of foreclosure activity in the borough.
Staten Island also saw 17% more pre-foreclosures in Q2 than in Q1, the second-highest quarter-over-quarter increase, albeit far from the 110% surge posted by Manhattan. And, compared to Q2 2019, Staten Island totaled 64% fewer lis pendens between April and June, placing the borough right in the middle between Manhattan and Brooklyn at the upper end and Queens and the Bronx at the lower end.
Methodology
Having tracked foreclosure listings for more than a decade, PropertyShark is the only service in New York that guarantees 100% coverage of the local foreclosure market. Because auctions are frequently postponed and/or rescheduled, the statistics referenced in this report include only first-time foreclosures to avoid over-reporting the number of distressed properties in the city.
Separately, we also report on lis pendens (pre-foreclosure) filings — legal notices that mark the beginning of the foreclosure process.
This report focuses exclusively on residential properties (single and two-family homes; condos; and co-op units) that were scheduled for auction for the first time in Q2 2022.
Pre-foreclosure data refers to unique properties that had at least one lis pendens filing in Q2 2022, which may be a first-time filing or a refiling. The same building class restrictions apply, excluding co-ops. If more than three units were referenced on the same lis pendens filing, they were excluded in order to avoid accounting for entire buildings.
