A dubious distinction - Florida #2 nationally in foreclosures!

By
Managing Real Estate Broker with Quail Ridge Country Club Realty, Inc.

Florida foreclosures up by 71 percent over the same time last year! 

St. Lucie County foreclosures nearly quadrupled in April as compared to a year ago!  Palm Beach County remained at approximately the same level, according to RealtyTrac

Lucky Martin County had an almost 50 percent decline from the same time last year.

Nationwide, foreclosures fellbelow a two-year high set the previous month, but rose 62 percent from April 2006 in the wake of falling home prices and the subprime mortgage mess, analysts said.

Florida had the second-highest number of filings in the nation with a total of 14,318 households entering some stage of foreclosure last month, as reported by RealtyTrac. California is No. 1 with 30,505 filings.

Although I am not usually a pessimist, I believe we are only seeing the tip of the iceburg and expect to see a continuing rise the Florida foreclosres. 

The formula of record inventory levels, declining prices & all the "creative" financing people jumped into will continue to squeeze homeowners trying to get out from under. 

The National Association of Realtors recently predicted that home prices would fall in 2007, the first such drop since the Great Depression.

Florida ranked second in the nation with a sales drop of more than 25 percent in the first quarter of this year, NAR said. Nevada ranked No. 1 at 27 percent.

In Palm Beach County, the median price of an existing home fell 4 percent in the first quarter compared with the first quarter of 2006, the Florida Association of Realtors said Tuesday. That put the median price at $378,200, compared with $392,900 in the first quarter of 2006, FAR said.

Palm Beach County home sales dropped 20 percent, a troubling double-digit decline.

In the Treasure Coast, the median price of an existing single-family home fell 8 percent in the first quarter, FAR said, to $240,000 from $260,200. Treasure Coast sales dropped a staggering 36 percent compared with the first quarter of 2006.

Of course, all this wonderful news upset the stock market and leaves investors feeling unsettled.

So, will sales continue to fall?  Will Florida actually provide property tax relief?  Will the Fed lower rates?  Oh, and what about those insurance rates & that pesky hurricane season looming around the corner?

I guess we'll have to stay tuned!

 

Ann Jara

Coastal Commercial Group, LLC

561-436-3335

www.AnnJara.com

Comments (5)

Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

The big picture looks bad. I am probably as big of fan of statistics as the next Realtor. However, the biggest statistic is the number of contracts closing, the number of listings (priced correctly), the number of REAL prospects I am working with... Front page story here this morning - EXISTING HOME SALES PRICES RISE 10%. I see that as positive, even if the prices are lower than a year ago. Thanks for the post.

May 16, 2007 01:13 AM
David A. Podgursky PA
THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL
THE PODGURSKY GROUP - Make the Right Move!

I don't know how I feel about this scenario.

I do not like blaming any one individual... and there was a lot of "creative financing" blamed when the blame could be put in a lot of places...

  1. loan officers that never called back to address adjusting rates ... I mean, that's repeat business!!
  2. online/discount mortgage companies that have NO sense of responsibility for local markets 
  3. but the primary concern... the biggest blame HAS to be put on the borrower... THEY are the ones that did not pay the bills, not the brokers/loan officers/realtors/appraisers/lenders/title attorneys... they were the ADULTS that were supposed to be responsible and were not

That being said... I believe some of the Florida issues are specific to Florida demographics.

  1. There are a lot of people balancing multiple properties - makes foreclosing on one easier. 
  2. Lots of middle class can't keep up with their NEED to move to a larger property for growing families while taxes keep rising. 
  3. The tax situation in and of itself. 
  4. The Insurance issues...
  5. Foreign investors/2nd home owners that just stop paying their bills...
  6. and snowbirds who have let houses go because they didn't want to come back after hurricanes.
  7. We must also realize that Homeowners Associations are foreclosing over unpaid dues that have been racking up due to homeowners not being in their homes and storm assessments unpaid as well.

Mott is right about FLIPs that are killing Martin and St Lucie Counties... which is why I think the Luxury Tax put on flippers is not a bad idea.   In Miami-Dade one issue that is concerning is that there are still "investors" getting high appraisals and walking with cash on these pre-foreclosure properties -there is still enough collusion to let it happen!

Mott also mentions preconstruction... with all the mania to get new construction, we need to remember that a lot of these people that rushed to "affordable" community lotteries like Greystone in Boynton were putting down a MINIMUM of $40,000 of their money, often from HELOCs to buy a house that would not be delivered until the earliest Q1 2008!!  Where are these Affordable Home buyers with that much cash when we hear about foreclosures?  Why is that money not used on existing inventory??

There are a lot of bad currents but I do believe they are correcting in the micro-markets...the macro-market is suffering from some of the woes of the worst micro-markets.

Sorry for the Novella :)

May 16, 2007 03:03 AM
Joe Harris
Morgan Financial - Melbourne, FL
Every one is always quick to blame the Lender and the Loan officer.  While I know there are plenty of brokers out there that have sold many loan products, and not fully explained to the customer what was going to happen to their payment, that borrower was given every disclosure in the world to explain what happens with their loan.  If people would read wha they sign, they might not have been in the situation that they are in.  Also, buyers wanted to buy that new house so bad that they were willing to take these higher risk loans, and overstate their income.  What about the Realtor?  They were forcing loan officers to get the deal done.  However, I still believe the main blame should be put on the borrower.  They should have done more research, read the note, and not lied about their credentials!
May 16, 2007 03:11 AM
Ann Jara
Quail Ridge Country Club Realty, Inc. - Boynton Beach, FL
CRS, e-PRO, TRC, RSPS

Thanks for the great comments.  I would like to point out that I am not blaming lenders for offering creative deals (at least not most of them :) ) 

Unfortunately, I think a lot of people got caught up in the idea of owning a home that perhaps was beyond their means, not realzing the true implications of loan they initially had,  or anticipating "flipping" before or upon closing on new construction.  For the most part, these buyers are a casualty of buying at the market peak & dare I say a little greed that blinded them to risks they were taking.

May 16, 2007 03:43 AM
Jessica Diaz
Florida Sun & Surf Realty Group - Port St Lucie, FL
P.A., Broker Associate

I agree with Joe Harris, last year and the year before Port SAint Lucie Florida had a flood of south floridians who were willing to do just about anything to get into the market. Homes that were really worth $150K people were buying for $200K, but that's what the market was calling for and we sold them. But the borrower is the person who many times did not want to know the truth about the note that they were going to carry. They wanted to hear the nice payment amount even though it would drastically adjust in 6months. I dealt with a lot of Mortgage Brokers who were willing to say the truth (like my husband) about the interest rates and the reality of ARM loans, and many did not want to hear it. They went with another Mortgage co who told them what they wanted to hear. A year later they are at the foot of the court house fighting foreclosure. No one puts a gun to your head.  People need to educate themselves before they get into a mortgage that is not realistic to their current financial means. Internet is a huge tool for people to educate themselves on interest rates and Mortgage fraud. We are living in an age of information, use it!

May 16, 2007 05:01 AM