Despite High Risk, Florida Foreclosure Rate Remains Well Below National Average
Plenty of Florida homeowners are feeling overextended on their house payments these days, due to rising Florida home loan rates. But they aren’t stretched as thin as most owners across the country, according to the Lakeland Ledger.
RealtyTrac, a California company that charts foreclosures, reports that national foreclosure rates surged 68 percent between February 2005 and February 2006, rising from 69,940 to 117,259. Despite historically high Florida foreclosure risk, the Sunshine State defied the bad news as its foreclosure rate declined during that time — from 11,211 to 10,019.
Tampa Bay area counties offered a mixed message. Polk, Pinellas, Pasco and Hernando counties listed fewer foreclosures, while Hillsborough and Citrus counties boasted more. Polk County had only 58 foreclosed homes last month, according to The Ledger, a figure that represents a nearly 71 percent drop from the 197 foreclosed homes registered in February 2005.
“Florida’s actually been trending downward over the last few months. A lot of time when you see foreclosure dropping, there’s still some strength in the housing market. People can sell before they foreclose,” said Tristam Wallace, spokesman for tracking firm Foreclosure.com.
RealtyTrac defines foreclosures as properties in danger of repossession by the bank or lender, due to delinquency of house payments over several months. Many analysts are predicting a rise in foreclosures due to people buying bigger homes with riskier, adjustable-rate mortgages over the past several years. Stratospheric housing appreciation has propped up such buyers since 2000, as rising values of 20-30 percent a year offer people the chance to refinance their way out of a jam. Soon, tighter credit restrictions and slowing appreciation will force more people into default.
RealtyTrac’s numbers were higher than those provided by Foreclosure.com, which showed a 9 percent upswing in foreclosures in the past 12 months. The companies measure slightly differentl, with RealtyTrac including what it calls “pre-foreclosures,” or properties under notice of default that haven’t been seized or auctioned off. Foreclosure.com does not.
While states like Michigan and Ohio showed ominous month-to-month trends, Georgia came out the worst in the recent survey, having reported 9,421 foreclosures in February. That’s more than twice the number recorded a year earlier, and translates to one out of every 329 households, more than double Florida’s one per 729 homes.
“This is the third straight month the U.S. rate has moved higher, and it’s the second straight month new foreclosures have topped 100,000. Several states, including California, Florida, Texas and New York, reported a dip in foreclosures in February. We’ll see if the rest of the country follows that trend in March.” James Saccacio, CEO of RealtyTrac, said.
When you consider the state of many overvalued markets, foreclosures aren’t that unusual to see at this point. Hopefully they simply mark a return to normal as the South Florida housing market cools. Let this be a lesson to those of you considering interest-only or adjustable-rate Florida home loan options. If you aren’t careful, you could extend yourself beyond control.
