Saturday, December 30, 2006

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.


At 7:59 PM, Anonymous Anonymous said...

Stillwater Capital Partners just purchased a 30 story condo tower on the
water in West Palm Beach Florida for a good price ($36,500,000) and we plan
to invest about $300,000,000 in West Palm Beach over the next 3 years.

Not all Florida real estate is alike and we believe there are great
opportunities available to the patient investor.

The Stillwater Asset Backed Fund was the vehicle through which we
found the properties (we were approached for loans) and now our real estate
division is very excited and optimistic on the prospects in West Palm Beach.

In 2 or 3 years we expect to sell Waterfront condos at more than $900 a
square foot.

We are building 4000 square foot Ultra-luxury apartments with incredible

Jack Doueck
Stillwater Asset Backed

At 12:18 PM, Blogger Bonita Springs Agent said...

On the west coast of Florida we haven't seen the massive forclosure issues that others are experiencing. I don't doubt them for a minute, though. Lenders were giving away money with little regard for the future.

On this coast of Florida the press has been a real killer to the industry. They seem to write negative articles for sport at this point. Periodically, we get something marginally positive. I invite anyone to read a recap of a story in the News Press (Fort Myers) yesterday. A link to the front page article is included.

At 12:38 PM, Anonymous Anonymous said...

47000 mls lisings in boca dade miami

WSJ says a large luxery developer is in trouble; with
8000 new units coming on stream 2007
12000 new units coming on stream 2008
5500 new units coming on stream 2009

all investors, and buyers now have
to have 20-30% down with full documented income verfication loans,
owner occupied....I think the market
will collapse 30-50% price wise ....

the bubble is blown thanks to the
subprice mortgage collapse, there are
no more NO Doc loans...and no ez mortgages...

At 11:29 AM, Anonymous Anonymous said...

1st and 2end response posters are clearly a realtor trying to spare the false propaganda real-estate is still a good investment. Be aware that the realtor industry is attempting to sugar coat the real estate problem to save their commissions and ass’s. don’t belive the hype realtors are not to be trusted

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