Newark’s city property auction can be an important indicator in determining whether or not there is a recovery in the housing sector and can foretell the bottom of the foreclosure crisis in the city. In the past, recovery metrics have been mixed. The previous auction in November, 2010, in the midst of the great recession, showed a slow recovery and was detrimental to Newark’s redevelopment and revitalization. It was revealing. Large prime commercial properties had remained unsold that time, but not this time.
The outlook seemed to be different this time, with last week’s auction. The mood was different, the crowds were larger, and in our discussion with bidders, a new sense of excitement and anticipation of opportunities and deals was in the air. This optimistic attitude is supported by loan performance data for the city of Newark. There has been a decline in 90-day delinquency rates, which suggests that foreclosure rates have hit bottom and are not projected to continue to decline. Although it’s too early to celebrate and predict resurgence in the market, these are positive signs to watch.
The auction did provide some noteworthy deals. There were truly good deals there. One such example was a $20,000 condo in a prominent Art Deco building across from Weequahic Park, near a bus route to NYC or downtown Newark. The property also included an interesting floor plan, with hardwood floors and a sunken living room.
There were single and multi-family homes in nice neighborhoods for under $50,000, also. Wells Fargo was present with applications for 203K loans, FHA loans that provide purchase funding and property rehabilitation funds. Additionally worth mentioning were several large commercial parcel apartment buildings, from $300,000 to $500,000, the last remaining apartments in the most desirable areas: Forest Hills, Clinton Hill, and near University Heights.
Auctions have many players that make the game interesting. Participants include the first time homebuyer and the homestead program, designed to have the individual purchaser rehabilitate the property and then live in it for at least 5 years. Existing property owners are there to protect and invest in buildings or land next to them. Contractors, developers, and investors are there for several reasons, as specialists in specific neighborhoods, large developers, boutique buyers, property flippers, commercial apartments pickers, large developers picking up missing parcels for big projects, and industrial developers and professional auctioneers.
Glocally Newark tries to the see the artistry in the topics we cover and this is no exception. What an exciting dance to watch as bids are placed and properties are sold. This week, you will hear our reporters first-hand accounts, experiences, and observations of the art and dynamics of the auction.