The Florida housing market is slowly and steadily recovering after a surge of foreclosures left the state with dwindling home values. However, a new rush of foreclosures looks as if it will saturate the area once again.
The rising unemployment level, now at 11 percent, is a prime contributor to the foreclosures. As a result of this home prices will continue to decline, despite some previously reported bright moments that implied a gradual recovery.
Amy Baker, coordinator of the Legislature's Office of Economic and Demographic Research, said, "We think there's a lot of foreclosures that are just starting to make their way into the pipeline here. They really haven't hit yet."
As we reported earlier, Florida had the highest rate of foreclosures in the country. A new study by LPS Mortgage Monitor shows that as much as 10 percent of mortgages in Florida were in foreclosure in August, three times the national average.
But the new wave of delinquencies will come from a growing number of defaulted loans that have not yet hit foreclosure status, meaning that many more distressed properties will become available over the next several months.
LPS referred to these types of loans as "shadow foreclosure inventory" and reported that there are twice as many of these than actual foreclosure starts. Tim Becker of the University of Florida's Bergstrom Center for Real Estate Studies said, "Housing sales are rising. But foreclosures just put more homes back into the inventory of unsold homes. You're not going to get Florida's economy going again until you cut down this inventory."
You can also read a related story we posted earlier Florida Ranks Number One for Mortgage Defaults
How do you benefit? Get a great deal on Central Florida housing by visiting our Foreclosure page or our Hot Properties Page and find the best deals available on the market updated every hour.
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