Rural Regions Not Immune To Foreclosures

February 11th, 2008 · No Comments

The rural areas around New York from Lakewood to Frewsburg to Gasport and LeRoy are also feeling the pain from foreclosures. The rates are fast increasing in Wyoming and Allegany Counties. Nevertheless the numbers were better than the national average.

Foreclosures are telling on the Buffalo-Niagara area although less intense than elsewhere. The national average is 9.7% while the eight counties of Western New York averaged 5.6%.

It all points to a relatively healthy real estate market. That is important for the general economy as foreclosures usually have negative impact on the real estate scenario. Perhaps because there was no bubble – nothing has burst.

Foreclosures were the highest in Chautauqua County where one of 5 sub-prime loans had been foreclosed. The foreclosure rates were 15% in Gasport (Niagara County) and Delevan and Frewsburg (Cattaraugus County). Wyoming and Allegany Counties recorded 8% foreclosures.

In Buffalo the rate was 5.5%. Here two zip codes that had seen a good amount of sub-prime activity were now seeing equivalent rise in foreclosures. In all there were 454 foreclosures in the region fenced by East Ferry Street, Harlem Road and Winspear Avenue. The rate in this specific area was 5.9% - slightly higher than the Buffalo average.

The second highest number of foreclosures is the regions that runs through Thruway, Cheektowaga and Buffalo between Harlem and Transit roads. There were 21 foreclosures here. It had seen the fourth highest number of sub-prime mortgages at 281. The overall average foreclosure rate in Lockport and North Tonawanda was 5% with 16 and 15 sub-prime loans respectively.

In these thinly populated areas there had not been much sub-prime activity and thus the slightest variation caused a significant change in the overall foreclosure ratings. It is analyzed that since 1999 there wages in automobile industry are being sliced and this has largely contributed to foreclosures in Lockport and North Tonawanda.

Locating the density of foreclosures should help the government to analyze and tackle the problem in a better way. In the Buffalo Niagara region the value of a house is less than half the national average price. Thus many could opt for conventional mortgage and not over reach themselves to get roped into the sub-prime mess. The Buffalo Niagara area is also less susceptible to another type or risky mortgage – Alt-A loans. These are advanced to prime borrowers who couldn’t prove their income. Risk means foreclosures!