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!

Home and Land Prices Rise in November; Four Cities Hit All-Time Highs

Blog #1

U.S. home prices increased at a faster clip in November, the gains fueled by solid hiring growth, historically low mortgage rates and a shortage of houses on the market.  The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.8 percent from a year ago, up from a 5.5 percent pace in October, according to a recent report.

Home values nationwide have nearly returned to their July 2006 peak, as the real estate market has slowly recovered from the housing bust that triggered the Great Recession. But several metro areas have fully rebounded from the downturn.

Four metro areas — Dallas, Denver, San Francisco and Portland Oregon — have either matched or eclipsed their all-time highs, while Charlotte, North Carolina, is less than 1 percent below its previous high.  No Southwest Florida city is included in the Case-Shiller index, but Tampa and Miami are, showing gains of 6 percent and 8.1 percent year over year, respectively.

By another yardstick, home prices in this region also continue to climb. Data from the trade group Florida Realtors showed that buyers paid a median $253,650 for a single-family home in Sarasota-Manatee in December, a 16.4 percent increase over the year.  This increase was also seen in the ride of Florida land sales. In Charlotte County, homes traded for a median $180,000, up 21.6 percent.

Buyers crowded back into the housing market last year. Sales of existing homes rose 6.5 percent over the year to 5.26 million, according to the National Association of Realtors. More Americans have been able to purchase homes as employers have added 2.7 million jobs and borrowing costs have remained low. But the number of available listings has fallen 3.8 percent from a year ago, causing tight inventories that have fueled escalating prices.

The rising home values, limited selection and need for investment real estate could ultimately deter sales growth in 2016.

The dearth of inventory has really taken its toll on the market. Homebuyers this year are motivated but not desperate, and they refuse to overpay. Without more listings, what we’ll see are higher prices and lower sales volumes, a lousy way to start a new year for homebuyers.

The rising prices have created some affordability pressures — down payments have fallen as a share of the purchase price even as they have increased in absolute terms.

For a conventional 30-year mortgage, the average down payment was 17.46 percent of the purchase price in the October-December quarter. That is down from 17.63 percent in the prior quarter, according to a recent report by LendingTree, the online loan marketplace.

But buyers had to come up with $51,721 for their average down payment at the end of 2015, a 5.72 percent increase from the third quarter.

The challenges caused by rising home values have been offset somewhat by falling mortgage rates in recent weeks.

Mortgage buyer Freddie Mac says the average rate on a 30-year fixed-rate mortgage declined to 3.81 percent last week from 3.92 percent a week earlier. Rates have historically averaged 6 percent, meaning that interest expenses are relatively low for homebuyers.

Learn more about current SWFL real estate market trends by visiting 9 Core Realty!