South Florida Foreclosures On The Rise

While the Real Estate Industrial Complex or (REIC as it is known in the blog community) continues to spend millions on adverstisements spouting it is "time to buy", the endless stream of data continues to come out showing how the bubble has burst. Whether you are a seller or prospective buyer, it is apparent you cannot simply continue to blindly follow the NAR and ignore the facts. People are losing their houses at an alarming rate.

As reported here MSN Real Estate, "Foreclosures nationwide were up 43% from a year ago in the third quarter of 2006. Foreclosures are rising in many parts of the country, fueled by a slowdown in home sales, slumping real-estate prices and rising payments on adjustable-rate mortgages. Homeowners who have lost a job or faced another economic crisis are finding it hard to refinance or take out home-equity lines of credit to bail themselves out, analysts say."


But wait folks, it gets worse. "The Detroit, Fort Lauderdale, Fla., and Denver areas posted the nation's three highest foreclosure rates for the third quarter of 2006, replacing Indianapolis, Atlanta and Dallas, which had been the top three markets for the two previous quarters."

"Among the top 20 metro areas on the list, two pricey Florida markets posted the biggest jumps for the quarter: Fort Lauderdale and Miami saw 87% and 97% jumps, respectively, in the number of foreclosures as investors failed to cash in on speculative buys."

Ft. Lauderdale has the distinction of ranking #2 in the nation with foreclosures, just behind Detroit, Michigan, with 8,431 foreclosures reported in the third quarter of 2006. That equals 1 out of every 88 households, or over FOUR times the national average. This is a mind numbing 86.53 % increase over the second quarter of 2006. We are talking only three months.

For those of you living in Dade County (Miami), you are fortunate enough to be #4 in the USA, with 9,380 foreclosures in Q3 2006,or 1 out of 91 households. This was just shy of 4 times the national average, but an even higher 97.18 % increase over Q2 of 2006. Yes, a double in one quarter.

Palm Beach County joined the party at lucky #13. Congratulations! With 3.643 foreclosures in Q3 2006, it equates to 1 in 153, or only 2.53 times the national average. If you want to put some positive spin on the numbers, this is a mere 37.89 % increase in one quarter over Q2 2006.

The time for being an ostrich is over. If you are a seller, I suggest you adopt an aggressive campaign to sell your property,including major price reductions to sell it fast. If you are a buyer, use one the many available buy vs. rent calculators. The numbers remain so far nutty to buy, I cannot endorse buying. In my opinion, 2007 is going to be far worse than 2006. Like a boulder rolling downhill, this decline is building momentum and is far from reaching the bottom. By every statistical and historical date I have seen, prices remain tremendously overvalued.

As always, nothing on this blog is intended as legal or financial advice. Do you own due diligence and consult professionals such as your attorney, accountant or financial advisor regarding your personal situation and needs. That being said, in my opinion it won't be until 2008- 2009 before we see the bottom of this decline, which will be much further downward in prices. Remember, asking a Realtor if it is time to buy is like asking a barber if you need a haircut.

Happy New Year and may 2007 be a good one for everyone.