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Foreclosures Triple - AGAIN!?!

Another article in the Palm Beach Post this morning says that foreclosures here have tripled from the same period last year.

It also says that the important "ratio" of home price to household income is double what is considered affordable and normal.

In Palm Beach County foreclosure rate is a STAGGERING 1 in 45 homes!!!!! Yes that is staggering! The number on a national scale is 1 in 617.

The article is titled PALM BEACH COUNTY FORECLOSURES TRIPLE, and is by Post reporter Linda Rawls.

I last wrote a blog on foreclosures tripling on December 20 and there said that the Post reported a tripling of forelcosures. In that December 13 article (see post Foreclosures Triple - What's Next?). I have a call into the reporter to reconcile whether today's article is old news rehashed or new news. The statistics of 1:45 were not in the previoius article, where it said that it was 1 filing for every 371 homes in Palm Beach County. The difference may be the new article calls it a "rate" as opposed to the actual raw number.

However the article is postured, the reality is that here in South Florida there are plenty of opportunities for investors and plenty of heartache for those with homes they cannot afford.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@FLORIDA-COUNSEL.COM - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales

Posted by Richard Zaretsky, Florida Real Estate Attorney on 01/03/2008 07:25 AM

Comments (4)

foreclosures, foreclosure attorney, short sale, foreclosure lawyer, loan work out, mortgage foreclosure palm beach, negotiate with lender

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4 Comments on Foreclosures Triple - AGAIN!?!

JAN

2008

Wow!! I knew that things were rough in FL but not this rough! 8=)

Richard,

I understand my earlier reply did not go through so I will try a gain.

My story in today's Post is not a rehash. The yearly foreclosure numbers did not come out until yesterday (Monday). We asked the clerk's office to compile them for us last week. I wrote the story yesterday for today's paper. New stats, new story!

I think the confusion comes from the fact that both my previous story on foreclosures and this story had rates that tripled. But they're two different stories, using two different sets of foreclosure statistics, as a reading of them will quickly show.

As for the one in 45 figure, it's a bit inflammatory BUT it's true! It doesn't mean that one in every 45 homes are in foreclosure, however. It means that there is one foreclosure for every 45 homes. That's a very fine distinction but its one the editors wanted made.

I used the one in 45 figure to show the extent of the foreclosure problem. Rather than just say there were 13,962 forecosures in 2007, I put the one in 45 figure in there to show it's a BIG problem. If we had 1 million househodls, 13,962 foreclosures might not be considered such a big deal.

Do you see my point?

The one in 45 figure comes from dividing the number of households in Palm Beach County (from the latest Census Bureau report) by the number of foreclosures, which comes to 45.

It just so happens that the number of foreclosures for 2007 is triple the number of foreclosures in 2006. The number of foreclosures for November 2007 is also triple the number of foreclosures from 2006.

Any time you throw a lot of numbers at readers, it gets confusing. Most of my stories are number stories so I try to make them clear.

That's why, for instance, I thought to find out the foreclosure rate (the 1 in 42) and also the ratio of income to home price -- again, I divided median home price by median household income, and got 6, for a ratio of 6-1. For 2000 I got 3., for a ratio of 3-1.

The important thing to take away from all these numbers is that analysts tell me the housing market is not going to "turn around," as people say, until the affordability issue is addressed and that ratio of median home price to median household income gets back down to 3-1.

One blogger on the Post's Web site, The Real Deal (plug, plug) even suggested the ratio should be 2.5-1 for us because our taxes and insurance are so high.I hope this help. Thanks for the posting.

Linda Rawls, staff writer

The Palm Beach Post

JAN

2008

Linda -

Thank you for your detailed response and explanation of the data you utilized in your article in the Palm Beach Post yesterday.

I agree that the ratio of income to home price is a critical number. When that number went outside the traditional box of acceptable tolerance, we should have known we were already in deep trouble with housing prices being sustainable.

My practice advises homeowners on short sale and other alternatives to foreclosure, so we see a lot of different problems with a lot of properties, and as a result we have been gaining some reality market insight. Published articles have been talking about what the deflation in home prices is at any one point in time. For the past year I have been projecting 30% off of the high price in 2005. But with some overabundance of mortgage foreclosure activity in many projects, and defaulted contracts (at a projected rate of 20% or higher) on condominium product now in the delivery stage, some neighborhoods will see even steeper declines over the short (2 year) term.

Thank you for your detailed explanation. If your editors will let you give some explanation to your number comparisons in future articles - it will certainly help us understand the underlying meaning of those numbers as they affect the market and our livelihoods.

JAN

2008

These statistics are really scary. There have been a lot more foreclosures in southeatern CT but nothing close to what the reporter and you are describing. This has to be having a negative impact on your market.

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