Southwest Florida Foreclosures Drop to 8-Year Low

Blog #2

Foreclosure activity sank to an eight-year low in Southwest Florida in 2015, as escalating values and an improved economy helped more owners hold on to their homes. Filings in Southwest Florida including on Cape Coral property have plunged more than 70 percent from their recession-era highs, although they remain above historic norms.

The area recorded 5,271 foreclosure filings last year, with one in every 76 homes — or 1.31 percent — in some form of distress, real estate researcher RealtyTrac Inc. recently report.   But that is down from the peak of 20,507 filings in 2009, and the lowest level since 2,072 were recorded prior to the financial crisis in 2007.  Still, many homeowners remain in trouble.

The region ranked 26th among the 214 largest U.S. metro areas for foreclosure filings, and Florida posted the second-highest foreclosure rate last year including foreclosed investment land for sale.  Although foreclosure activity in the market dropped 18 percent in 2015 from the previous year, similar to the national trends, the foreclosure rate in the region is still in what we consider the danger zone, with more than 1 percent of housing units with a foreclosure filing during the year.

Most likely in 2016 we will continue to see foreclosure activity decrease, and we would expect by the end of the year to see the foreclosure rate in Southwest Florida below that 1 percent threshold. The only concern we have is a pending Florida Supreme Court case involving statute of limitations when it comes to foreclosures. If the court rules in favor of banks, it could lead to another surge in foreclosure activity across the state in 2016, but we consider that a less likely scenario.

Florida totaled 159,773 properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — last year. That was down by 22.5 percent over the year and by 67 percent from the 2010 peak. Despite that improvement, the state ranked second in the U.S., with 1.77 percent of its homes — 1 in every 56 — subject to foreclosure. New Jersey topped the list at 1.91 percent.

Nationwide, one in every 122 housing units — or 0.82 percent — had at least one foreclosure filing in 2015, the second consecutive year where the foreclosure rate was under 1 percent. A total of 1.08 million filings were reported in the U.S. in 2015, down 3 percent from 2014 and by 62 percent from the 2.87 million high in 2010.

In 2015, we saw a return to normal, healthy foreclosure activity in many markets, even as banks continued to clean up some of the last vestiges of distress left over from the last housing crisis. The increase in bank repossessions that we saw for the year was evidence of this cleanup phase, which largely involves completing foreclosure on highly distressed, low-value properties.

To learn more about purchase foreclosure land or properties in SWFL visit us at 9 Core Realty on the web!


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