Key Takeaways:

  • NYC first-time foreclosures surge 49% over Q2, remain 59% below Q3 2019
  • Citywide lis pendens increase 18%, with only the Bronx coming in below Q2 figures
  • Manhattan logs 15 first-time cases — less than one-third of its pre-pandemic volume
  • Queens leads again in foreclosures, reaching 55% of Q3 2019 figures
  • Brooklyn continues as the setting for the highest number of pre-foreclosures with 612 filings
  • The Bronx closes Q3 as the only borough where lis pendens trended down
  • Staten Island trails Queens for second-highest foreclosure volume
  • Zip code 11412 in Queens claims highest concentration of foreclosures with 17 cases

NYC Foreclosures Up by Nearly 100 Cases for 49% Q-o-Q Increase

As New York City home sales slowed over the summer under the pressure of rising interest rates and fears of a recession, the foreclosure sector continued its gradual climb back to pre-COVID levels. And, as expected, foreclosures in NYC trended up. Specifically, NYC totaled 297 foreclosure cases in Q3 — 59% below Q3 2019 levels, but up 49% compared to Q2 of this year.

Similarly to the previous quarter, Queens was the largest contributor of foreclosures among the five boroughs. In fact, Queens’ 150 foreclosures represented a little more than half of the city’s foreclosure activity in Q3. Conversely, Manhattan had the lowest number of cases once again, with only 15 foreclosures recorded in the entire borough.

Considering the activity in Queens’ foreclosure sector, it’s no surprise that the borough again claimed the highest concentration of foreclosures in one zip code: 11412 had 17 unique cases, while the Bronx had only one zip code where more than one case was filed and judged (zip 10471 with two cases). In fact, NYC’s top three zip codes by number of foreclosures were all located in Queens in Q2.  Zip 11412 was followed by 11434 with 12 cases and 11413 with 10 cases, with the three zip codes forming the city’s most concentrated foreclosure cluster.

At the same time, NYC lis pendens were also on the rise. More precisely, 1,222 filings were recorded citywide during Q3 2022. That’s about half the number of instances recorded during the same period in 2019 and 18% more than Q2 2022. And, while Queens led in terms of foreclosures, the largest volume of lis pendens filings took place in Brooklyn with a total of 612. At the same time, the Bronx had the lowest pre-foreclosure activity, with a mere 53 filings in Q3 — down by nearly one-quarter compared to Q2.

Manhattan Lis Pendens Closest to Pre-Pandemic Levels Among 5 Boroughs

At the borough level, Manhattan continued to maintain the lowest foreclosure activity, with its 15 cases representing 31% of the total recorded in Q3 2019. That said, this was also the borough’s most active quarter for foreclosures since Q1 2020, when there were 38 cases.

In line with its slow pace of foreclosures (at least for now), Manhattan didn’t have any foreclosure superclusters. Here, zip 10025 — which includes parts of Morningside Heights, Manhattan Valley and the Upper West Side — had the largest concentration with three cases.

While Manhattan foreclosures were down 69% compared to Q3 2019, lis pendens in Manhattan were just 14% lower compared to the same period. Specifically, the borough totaled 102 lis pendens in Q3 of this year and 118 in Q3 2019. Compared to Q2, lis pendens were up 62%, increasing from 63 to 102 filings.

Queens Claims More Than Half of City’s Foreclosures as Cases Continue to Rise

In Q3, Queens continued to be the borough with the most active foreclosure sector, claiming more than half of the city’s case volume. Not only that, but the borough’s 150 cases amounted to 55% of its foreclosure volume in Q3 2019 — making Queens the borough where foreclosures have come closest to pre-pandemic levels.

With such an active foreclosure sector, it was expected that Queens would also claim the highest concentration of cases in one zip code. In fact, the borough claimed the city’s top three zip codes by number of foreclosures with zips 11412, 11434 and 11413 , which among them had 39 cases in total.

Even so, Queens lis pendens remained significantly lower than pre-pandemic levels: Q3’s 248 filings represented a 66% decrease compared to Q3 2019. And, while lis pendens did increase quarter-over-quarter, it was only by 8% — the lowest quarter-over-quarter increase in lis pendens activity among the five boroughs. (Although lis pendens filings actually decreased in the Bronx during the same timeframe.)

Brooklyn Records Highest Pre-Foreclosure Incidence in City for 3rd Consecutive Quarter

Meanwhile, Brooklyn foreclosures more than tripled quarter-over-quarter. Plus, despite the fact that its Q3 total was higher than Q1 and Q2 combined, the borough still closed Q3 with just 59 unique cases — 70% fewer than in Q3 2019.

In terms of foreclosure clusters, Brooklyn’s hottest area was in zip 11203 in East Flatbush, which had a cluster of eight cases (the same as Staten Island’s 10308).

Although Brooklyn had the third-highest foreclosure volume in the city, it had the top incidence of lis pendens with 612 filings in Q3. That represented a 20% increase quarter-over-quarter. Yet, compared to Q3 2019, Brooklyn pre-foreclosure cases were 29% lower.

Bronx Foreclosure Sector Remains Sluggish with Only 19 Cases Year-to-Date

After recording zero cases in Q2, the Bronx had 11 foreclosures in Q3 — the lowest number among the five boroughs and an 84% contraction compared to Q3 2019 figures. In fact, of the five boroughs, foreclosures in the Bronx were consistently the lowest in the first three quarters of the year, recording a mere 19 cases year-to-date.

The borough’s tempered foreclosure sector was also evidenced by the lack of foreclosure clusters, with only one zip code seeing more than one: Zip 10471 — which includes parts of Riverdale, Fieldston and North Fieldston — was the setting for two cases in Q2.

Notably, lis pendens filings in the Bronx were also the lowest in NYC, with 53 cases in Q3 — 85% below Q3 2019 levels. Moreover, the Bronx was the only borough where pre-foreclosures dropped quarter-over-quarter, thereby bucking citywide trends of increasing pre-foreclosure filings.

Staten Island Again Records 2nd-Highest Foreclosure Case Numbers

Following a near-complete absence of foreclosures for seven consecutive quarters between Q3 2020 and Q1 2022, Staten Island foreclosures returned in Q2 of this year at the second-highest level in NYC, outpaced by only Queens. That trend continued into Q3, as well: Staten Island was the setting for 62 first-time foreclosures — second only to Queens’ 150 cases. Consequently, the borough’s foreclosures rose to nearly half of its pre-pandemic figures.

Finally, with Brooklyn totaling 59 cases this past quarter, it remains to be seen whether Staten Island will continue to have the second-highest number of foreclosures in Q4, as well, or if it will be overtaken by Brooklyn in an echo of pre-pandemic rankings. In terms of foreclosure clusters, Staten Island’s 10308 zip code in Great Kills was the setting for eight cases, equaling Brooklyn’s 11203 in East Flatbush.

Likewise, lis pendens filings in Staten Island were even closer to pre-pandemic levels, with Q3’s 207 filings 41% lower than Q3 2019 figures. By comparison, the previous quarter’s lis pendens total was 64% lower than Q2 2019.

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 in order 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 Q3 2022.

Pre-foreclosure data refers to unique properties that had at least one lis pendens filing in Q3 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.

Eliza Theiss

Eliza Theiss

Eliza Theiss is a senior writer reporting real estate trends in the US. Her work has been cited by CBS News, Curbed, The Los Angeles Times, and Forbes among others. With an academic background in journalism, Eliza has been covering real estate since 2012. Before joining PropertyShark, Eliza was an associate editor at Multi-Housing News and Commercial Property Executive. Eliza writes for both PropertyShark and CommercialEdge. Reach her at [email protected]