Florida Foreclosures Slow in June, But Sunshine State Far From Out of the Woods

The number of Florida homes falling into foreclosure has slowed from last month, dropping by 12.7 percent from May to June, according to the Palm Beach Post.

Here in Palm Beach County alone, roughly $47 million in Florida home loans entered the foreclosure stage last month, according to data by RealeSTAT.com, a firm that tracks area real estate transactions.

By contrast, an analysis of the same firm’s data recorded about $68 million in Florida mortgage defaults filed in the first fiscal quarter (or three months) of 2005.

“That probably suggests the market is holding its own,” said Rick Sharga, marketing director for RealtyTrac.

Even though larger numbers of adjustable-rate mortgages are beginning to adjust upward to keep pace with climbing Florida home loan rates, the rate of homes entering default stage dropping considerably shows that a major market meltdown may be averted. On top of the decline from May to June, statewide foreclosures also are down compared to June 2005.
It could be the season.

“If the summer months deliver their typically high number of home buyers, the demand for housing created by these buyers should help keep foreclosure rates from rising too rapidly,” said James J. Saccacio, RealtyTrac’s CEO.

Florida is far from out of the woods, however.

In June, the state registered the third-highest number of foreclosure filings in the U.S., trailing only Texas and California. In fact, almost one out of every 10 U.S. foreclosure actions in the month of June took place in the once-torrid, now-floundering Florida housing market.

It will be interesting to monitor how the next 6-12 months play out, as well. Anywhere from $1 trillion to $3 trillion in those adjustable-rate mortgages will begin resetting to market rates beginning in the last half of this year, creating significantly higher Florida home loan payments.