The South Florida property market is in a State of Limbo. At the end of last year foreclosures fell to their lowest in three years, but not because less people lost the ability to pay their mortgage, but because the banks are under intense scrutiny over their foreclosure procedures, as a robo-signing scandal lead to more dodgy practices and irregularities being uncovered.
The consensus says that foreclosure filings in Florida fell about 60% in the final months of the year. The foreclosure freeze following the scandal “brought foreclosure filings to a standstill,” said Peter Zalewski, principal at Bal Harbour-based Condo Vultures.”Looking at data from the clerk of courts, we saw over a 60 percent drop on average, just in the fourth quarter.”
While many reports indicated the foreclosure freeze in October was short-lived, many reports indicate the reduction in filings may even have intensified to close out the year.
According to Realty Trac foreclosure filings in Miami-Dade one of the worst-hit districts fell 58.8% in December compared to the previous year and 22% compared to an already-slow November. As most lenders scaled back their foreclosures upon inspection of their paperwork the total for December fell to just over 3000.
In Broward, another one of the financial crisis’ great foreclosure hotspots the drop was 69.4% year on year in December, and in Monroe County, the monthly total for December of just 80 filings represented a drop of 69.1%.
This drastic slowdown, said Realty Trac, brought foreclosures in Florida down to the lowest level in 3 years.
This would normally be a good thing, but how good it is will be determined by time and likely by the actions taken at state and probably government level to deal with the situation.
Foreclosures slowed drastically in 2009 because the process of repossessing was slowed by intervention and by toxic-asset-juggling at the banks. This led to acceleration in foreclosures in the first part of last year, which ironically is probably part of the reason why banks have found it hard to cope with the numbers following the process to the letter.
What’s more many believe that the housing market cannot recover until the foreclosure problem is brought back to normality. OK sales are strong and many agents in America and around the world are making a good living selling on the repossessions, but at the same time millions of homeowners are seeing the value of their homes continually be dragged down.
In this sense the glut of foreclosures is not only hampering any recovery in the housing market, but also the wider economy as well because unhappy homeowners means low consumer confidence, low consumer spending and sluggish growth in domestic consumption, which in America is a big problem.