Tag Archives: South Florida

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Although the whole of America has encountered mortgage difficulties due to the economic crisis, it seems that now – especially for those in the South Florida region – there could be room for optimism.  Figures are indicating that, in recent times, fewer homeowners are facing the dreaded prospect of foreclosure, thanks in large part to the recovering economy, but also due to government-backed and other programs offering assistance.

For example, the Bank of America has been extending its financial supportive hand, and the results have been very positive.  Indeed, the numbers speak for themselves: in June 2011 there were 30,000 of “seriously delinquent mortgages” in South Florida and now – in August 2012 – this figure has dropped to 12,000 – a staggering 60 percent decrease.  BankUnited and Chase can also support the occurrence of a similar reduction in such numbers, most notably since 2009.

Since banks in the region have been particularly helpful, this has made a huge difference. Indeed, just a few months back, the majority of states in the nation made a $25bn settlement between Ally Financial Inc., Bank of America, Citigroup Inc., JPMorgan and Wells Fargo & Co.  As part of this, Bank of America wrote letters to 200,000+ mortgage holders (primarily in California and Florida), offering assistance. Other programs include the Home Affordable Modification program (offered by the federal government) that could lead to a reduction in monthly payments for some mortgage holders, as well as 46,032 trail/permanent modifications in Florida counties from various lenders.  Lenders thus seem to be making major efforts to help tackle the area’s “housing debacle,” rather than continue with its prior attitude of jumping to foreclosures. There has been a clear increase in banking flexibility, with some evening forgiving principal.  In addition, according to RealtyTrac, in the Miami-Fort Lauderdale-Pompano Beach region, foreclosure filings dropped 15 percent in July 2012 from their substantially higher figure in July 2011

Getting the Whole Picture

So while this all sounds extremely positive, why is it that homeowners in the South Florida region still seem to be struggling?  Is this the whole picture?  There are those in the industry who are not convinced Bank of America has made such a significant drop with over a third of homeowners no longer at least 60 days delinquent in four months.  Indeed, some have even suggested that the picture isn’t positive at all and that all the Bank of America is doing is merely unloading problematic mortgages to other servicers.  Although, having said that, the Bank has received around 10,000 requests from homeowners at their offices over the last two years, to which it has responded.  And for those who still feel they have not received the help they need, there will be a Bank of America free event next week to further extend a helping hand to struggling homeowners.

Further, there is still a large amount of Florida homeowners facing foreclosures.  Indeed, the figures show that one out of every 352 Florida homes is currently at some stage of foreclosure, according to figures from RealtyTrac.  This could be – at least in part – due to a revival in banking activity that, during litigation from state attorneys to protect consumers, had been delayed.  Now that these have been settled, banks are picking up again on long-overdue mortgages.  As well, even RealtyTrac – despite the positive trends it has witnessed – predicts an increase in foreclosure activity in the next few months.

Perhaps these facts shouldn’t come as such as a great surprise though, given that, according to a recent survey undertaken by Bankrate, Florida comes in at Number 4, for the country’s highest mortgage costs.  Given that the average cost for origination, title and closing in America is $3,747, Florida’s average of $4,395 is substantially higher, thus having the potential to cripple way more homeowners as they struggle to pay off their mortgages in troubling economic times.

So while there are definite improvements in America’s overall situation for homeowners – and indeed perhaps even more so for those residing in the South Florida region – there is still an undeniable amount of uncertainty putting pressure on these mortgage holders, that needs to be addressed.

 

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Finally, after months of poor performance in America’s housing industry, it seems like 2012 is going to be the year of recovery, albeit gradual. In South Florida for example, home sales are increasing which is good because prices were really hitting a low.  However, the mortgages people took out during the boom are still negatively impacting the market and this has been extremely challenging for many homeowners.

So, for those encountering difficulties in the housing market – be they homeowners, those looking to buy or potential sellers – there are some ways of improving the situation. First, since things have started to look up, for those looking to sell it is worth trying to do so earlier rather than later before foreclosures appear.  No matter how desperate you are to sell though, do not try to provide cash/cars/other incentives to get them to buy.  It is a bad idea.

In general, it looks like it is going to be a good year for sales; there are fewer declines in pricing as well as fewer properties on the market than in say 2009, 2010 and 2011.  In addition, it is anticipated that there will be another wave of bank-owned homes which will result in lower values and additional competition for those looking to buy properties.

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It seems like recently in the state of Florida, the news has only been bad vis-à-vis real estate and homeowners trying to make a buck or two.  Now, thankfully, the news is changing.  And there have been some great indicators for those in South Florida looking to sell their homes.  Indeed, because there are much less foreclosed properties on the market, homeowners can name their price.  Well, not quite, but things are definitely looking up.

It’s not the case with all areas, but right now, if you want to sell, South Florida seems to be the area to be in.  According to an agent from Balistreri Realty, some homes are actually even increasing in price.  True, there are many properties still in distress, but that is just not the full picture anymore.

Fewer Foreclosures

Yes, one cannot deny the fact that there are still foreclosures in Florida, but one also has to recognize that these numbers are declining, not increasing.  For example, according to the Miami Association of Realtors, in October of last year, distressed sales were 54 percent of all sales, but this year in the same month, that figure had dropped to 48 percent.  Not great, but definitely something and for sure the figures are going in the right direction.  Likewise there was a 4 percent drop for the same time zone in Palm Beach County.

Although foreclosures and so-called short sales still account for a large part of the region's housing market, the numbers are declining.  And it seems like it is the South Florida region we can thank for that due to its increase in home sales.   As well, the housing market in Weston is doing well too, having only 10 homes that are owned by banks.  As well, in this city, between February 2009 to August 2011, there was more than a 15 percent increase in the median value of a home. 

So for the Florida housing market right now, things are not as bad as they once were.  Of course there is room for improvement, but it seems like that is exactly what is happening in the South Florida region.

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It may be true that condos in South Florida are going down the pan, but it’s certainly not the case for the area’s apartments.  Indeed, plans are in motion to erect over 4,000 rental apartments: two high rises in downtown Fort Lauderdale; around 400 apartments on Young Circle and a complex with about the same amount of units in Boca Raton, at the old Levitz shopping center.

What happened was, in response to when real estate was doing great in the area, many apartment buildings and complexes were made into condos.  But given that it seems like there is now a greater supply for tenants, apartment buildings are being constructed once again.  Today, lots of young professionals who are somewhat skeptical about entering the property purchasing market, are looking to rent apartments or are unable to afford the mortgages on the original homes they bought so need an alternative.

It seems that these days instead of buying big homes with tough mortgages, the trend is moving towards smaller places, that do not require a down payment, with less monthly payments and someone to take care of any problems in the property.  It is much less of a hassle than having to deal with it on your own and way cheaper.  And it’s certainly been a huge plus for the South Florida community vis-à-vis people looking for affordable housing.