Although the number of homes in foreclosure decreased in October from the same time last year, the overall number of foreclosures are still high and some experts think it will rise. According to RealtyTrac, there were 7, 741 foreclosures in Miami Dade as of October. Most of the first round of foreclosures were sub-prime and adjustable-rate mortgages that became unaffordable once interest rates reset. The potential for another round of foreclosures is due to the large amount of negative equity many people currently have in their homes and the high unemployment rate, 11.3%, in Miami-Dade County.
This new round of foreclosures will keep real estate prices low, and may push them lower, unless the current sales trend continues and a balance is reached where inventories are stable at a 6 – 9 month supply. The recently extended and expanded First Time Homebuyers Tax Credit, continued low interest rates and real estate prices that have retrenched, should help keep sales moving and inventories decreasing. The graph below is for single-family homes and condo sales for Miami-Dade County. Some areas within the county are already at a 6-9 month supply level.