Florida Foreclosures Increase, Worst State in the US
The state of Florida Real Estate Market is awarded the title of “#1 for highest foreclosure activity” in the US again in November, the 3rd month in a row. This is not bad news for everyone, but I’ll get to that in a minute. 7 of the 10 worst foreclosure metro areas are in the state of Florida. New foreclosure starts, bank repossessions and the number of home foreclosures scheduled for auction have all increased from a year earlier. By contrast, new foreclosures for the US as a whole, are at the lowest rate in over 5 years.
Who Are the Winners and Losers in Today’s Florida Real Estate Market?
Winners – Prospective new residents. A high rate of foreclosure activity is keeping prices low in the worst hit areas of the state, and preventing an even faster rise in prices in the stronger markets like Cape Coral in southwest Florida. The absolute steals are nearly impossible to find anymore, but most Florida homes are still a bargain at today’s prices. Expect good pricing to last most of 2013.
Losers – Existing homeowners who purchased prior to 2008. You have seen the value of your home drop 60% from it’s peak (worst in the US) and the latest data show recovery will take even longer. If you live near foreclosures, they may become an eyesore and make your home harder to sell. Many of you are still upside down on your mortgage and can’t sell. If you must leave the state or can’t pay your mortgage, in most cases your only option is to give your home to your lender.
Winners – Investors. Many foreclosures are in poor condition or can’t be financed with programs that many regular home buyers need. This means fewer buyers to compete with on price. Investors will continue to find bargains (that they only compete on price with other investors on) they can buy, fix and flip (now using those popular home buyer finance programs) or rent out for income and the future appreciation.
Losers – Florida home builders. The still high foreclosure activity means any real return to a normal market, in most markets, will take even longer.
Winners – Florida Real estate agents. With home prices and sales improving in the markets of other states where people typically sell and move from, you have noticed an increase in traffic and sales. The old formula that worked so well to fuel Florida real estate market booms in the past is coming into play, sell high in the northeast and buy “the same level home” for less in Florida. As prices rise in Florida, less people will be underwater and will be able to sell and move back to where they came from. Look for the perpetual treadmill of people moving into, and then back out of Florida, to continue to pick up. Overall, the next few years will be a good time to be a Realtor in Florida.