Buying Selling

Foreclosures in South Florida Are Here For A While

According to RealtyTrac, foreclosure activity in South Florida will continue at high levels through 2010 and there will be a glut of inventory through 2013.

In the current market, 60% of active buyers interested in distressed propertys and 40-50% of sales involve a foreclosure or shortsale.

Buying Foreclosures Selling

Foreclosure Freeze Already Having an Effect on South Florida

The Miami Realtors Association is already seeing the effects of the current decision by several banks to put a moratorium on foreclosures.  In the past two weeks, 1,154 REOs have been cancelled, withdrawn, terminated or temporary taken off the market according to Southeast Florida Shared MLS Database.  In the two-week period immediately preceeding the announcement, only 225 were removed.
A nationwide foreclosure moratorium (possibly being considered by Congress) would devastate the recovery of the home market, which is vital to our economic recovery. Realtors believe that all homeowners should have due process and are proposing that banks do the following while REO’s are under review:

  • Allow pending foreclosures to be considered for expedited short sales.

  • Streamline the short sale process by pre-approving the seller in advance and determining a list price and minimum net proceeds amount before accepting any offers on the property.
  • Establishing a process to review all offers within a specified time period with heavy consideration given to the highest and best offer, no the current model of one offer at a time.
  • Ask homeowners to consider a deed-in-lieu of foreclosure and negotiate the deficiency amount.

What are your thoughts or suggestions?

Buying Foreclosures Investment Real Estate Selling

Foreclosure Freeze: Good For Distressed Owners, Bad for South Florida Real Estate Market

The recent decision by some banks to freeze their foreclosure process while they investigate their procedures for handling foreclosures has a mixed effect on South Florida’s real estate market.  While it may be a good thing for distressed owners who really want to keep their homes, it is probably not a great thing for current buyers and the overall real estate market.  The reality of too many homeowners who bought at the height of the market, owners who are currently underwater, unemployed, or simply bought way more house than they could afford when banks were in a lending frenzy, means the majority of homes in foreclosure now probably will still be there at the end of the investigation.  Yes, there are stories of homes foreclosed improperly, including that of an owner who had paid cash on the house, and many of the banks and their foreclosure attorneys have become mills that may have filed paperwork incorrectly or downright fraudulently (this is the fraud capital of the United States, unfortunately).   These procedures should be investigated, stopped and punished.  In the meantime, buyers who are currently under contract are in limbo and the real estate market, which has been slogging through high inventories, may slow since approximately 40% of the home sales in South Florida are made up of bank-owned properties.

Foreclosures Mortgage information

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Buying Foreclosures Selling

Home Foreclosures Expected to Continue in 2010

The good news is that sales on existing homes, both single family and condos, continue to increase and inventories are decreasing in Miami-Dade county.

The bad news is in the foreclosure numbers for 2009.  The numbers include all properties that are in some stage of the foreclosure process.

  • Palm Beach County – 30,870
  • Broward County – 69,633
  • Miami-Dade County – 72,391
  • Monroe County – 1,275

Since the unemployment rate is so high in Florida, foreclosures are expected to continue to add to inventories on the market in 2010.  Miami-Dade’s new on-line foreclosure program and the government’s Home Affordable Refinance Program should help keep the foreclosure rate lower than 2009’s.

Buying Foreclosures Selling

Miami Foreclosures – Down For October But Probably Will Increase

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.

Single-Family Homes and Condos in Miami-Dade County
Single-Family Homes and Condos in Miami-Dade County