Are your vendor networks and back-office ready to handle the upcoming turmoil?
Foreclosure starts increased by/to 4% from last month, while completed foreclosures increase by/to 38%
IRVINE, Calif. – June 8, 2023 – ATTOM, a leading curator of land, property, and real estate data, today released its May 2023 US Foreclosure Market Report, which shows there were a total of 35,196 US properties with foreclosure filings – default notices, scheduled auctions, or bank repossessions – up 7% from a month ago, and up 14% from a year ago.
“The recent increase in foreclosure filings nationwide indicates a trend that has been observed throughout the year, and what we have expected to occur,” said Rob Barber, CEO – ATTOM. “This upward trajectory suggests the possibility of continued heightened activity, and with foreclosure completions seeing the largest monthly increase this year, we will continue to monitor the potential impacts this may have on the housing market.”
The Next Crisis Will Start With Empty Office Buildings
Foreclosure starts increased by/to 4% from last month, while completed foreclosures increase by/to 38%
Most office leases were signed before the pandemic, and have yet to come up for renewal. Actual office use points to a further decrease in demand. Attendance in 10 largest business districts is still below 50% of its pre-COVID level, as white-collar employees spend an estimated 28% of their workdays at home.
Will Landlords Give The Keys Back To The Bank?
With such grim prospects, some landlords are threatening to “give the keys back to the bank.” Over the past few months, the property giants RXR, Columbia Property Trust, Brookfield Asset Management, and others have collectively defaulted on billions in commercial property loans. Such defaults are partly an indication of real struggles, and somewhat, a form of calculated strategy. Most commercial loans were issued before the pandemic when offices were full, and interest rates were low.
Why Do Banks And Municipal Corporations Need To Worry?
Silicon Valley Bank, First Republic, and Signature collapsed in recent months – regional institutions like these account for nearly 70% of all commercial property bank loans. Pushing down the valuation of office buildings or taking possession of foreclosed properties would further weaken their balance sheets.
Municipal governments have even more to worry about. Property taxes underpin city budgets. In New York City, such taxes generate approximately 40% of revenue. Commercial property – mostly offices – contributes about 40% of these taxes, or 16% of the city’s total tax revenue. In San Francisco, property taxes contribute a lower share, but offices and retail appear to be in an even worse state. Empty offices also contribute to lower retail sales and public-transport usage. In New York City, weekday subway trips are 65% of their 2019 level – though they’re trending up – and public-transport revenue has declined by $2.4 billion.
Are The Days Of Office Buildings Gone?
Is There A Solution At Hand?
