Foreclosure Freezes Florida Real Estate Market | Silent Majority Vote

Home foreclosures have hit every state hard, including Florida. Seven out of the ten housing markets that are expected to take the biggest drop during the first quarter of 2011 are in Florida. These markets are expected to have the largest declines in single family home prices during the next year according to some predictions.

The good news is that steeper declines that were predicted do not look like they will happen now in the Florida markets, but Florida homes are still among the hardest hit areas in the United States in terms of foreclosures.

The recent foreclosure freezes have also made things tough in Florida, with South Florida hit especially hard. The foreclosure freeze means homes are taken off the market for the time being, meaning nobody is profiting. The freezes were put into effect by some of the nation?s top lenders.

Roughly 2.9 percent of bank owned properties have been removed from the market. Recently there have been paperwork issues relating to foreclosures and they will now remain off the market until an investigation is completed.

Florida?s attorney general Bill McCollum has teamed with attorney generals of the other 49 states as part of a joint investigation regarding the foreclosure issues.

A Florida real estate consultancy says that there are currently about 4,000 bank owned homes in Miami-Dade, Palm Beach and Broward counties that are available for resale. There are now approximately 3,800 bank owned single family homes, condominiums and town houses in the South Florida market. This is about a thousand less than before all of the foreclosure issues came to light, prompting the foreclosure freezes.

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With new home sales remaining flat, bank owned properties are another part of the market that traditionally helps to pick up the slack. However, the recent foreclosure freezes have pretty much put a halt to that market, especially in South Florida.

Lenders are concerned that their paperwork may not have been processed or handled correctly. Many of lenders are choosing to be cautions, rather than risk fines or other actions later should their paperwork have similar problems to the types of errors that prompted the investigation in the first place.

Many lenders are simply choosing to pull bank owned properties off of the resale market. This is occurring at the rate of approximately 300 properties per week in the South Florida market alone.

Right now it is unclear if a process known as short sales, where the lender accepts less than the total amount that is owed by the borrower, will be effected by the current foreclosure freeze.

In what could be seen as a ray of hope for the Florida foreclosures market, a Charlotte, NC based Bank of America announced plans to resume pending foreclosure sales of more than 100,000 actions within the next week or so.

The additional problems created by the foreclosure issues come on top of some predictions that the Florida real estate market will be the worst in the United States over the next year.

Other issues facing the Florida real estate market include an aging population that is facing another year without an increase in Social Security benefits, meaning less money to spend on real estate. The state of the economy and the sustained high unemployment mean that in Florida, as in many states, people are simply not buying new homes at the same rate.

Buyers are also more cautious. The news of problems with foreclosure related documents could also make some people hesitant to purchase a home from a foreclosure re-sale.

Right now the best hope for the Florida real estate market is that the foreclosure issues will be resolved quickly and that lenders will resume their foreclosures. This will allow properties to re-enter the market sooner. It will also minimize the impact the foreclosure news has had on people?s perceptions of the foreclosure industry right now.

Confidence is a big part of success in the real estate market. In general if people see some positive signs that things will get better they tend to invest in real estate.

If foreclosure proceedings start up again successfully in other states, it?s only a matter of time before Florida resumes with foreclosure proceedings.

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Source: http://silentmajorityvote.com/2011/10/10/foreclosure-freezes-florida-real-estate-market/

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