Foreclosures Fall in Palm Beach, Martin Counties

Despite a sluggish housing market and erratic Florida mortgage loan rates, Palm Beach County foreclosures in July showed significant improvement over the same month a year ago, and contradict a trend of rising defaults in the U.S. as a whole.

A study by RealtyTrac shows that a total of 529 properties — 1 per every 1,052 homes in PBC — were in some stage of foreclosure in July. That’s a substantial 67 percent drop from a year ago, when 1,597 Palm Beach County homes were in foreclosure, RealtyTrac data states.

“Last July, Palm Beach foreclosures were four times the national average. A lot of last year’s foreclosures are due to speculative buying gone wrong. That part of the real estate market has slowed significantly, and Palm Beach County is coming back to more normal levels now,” said Rick Sharga, V.P. of RealtyTrac.

Martin County also saw foreclosure rates decline in July compared with a year ago, though the numbers are smaller. Only 37 properties were in some stage of foreclosure last month, a 35 percent drop from July 2005.

St. Lucie County showed a marked increase in foreclosures, however, with a 48 percent gain year-over-year and 92 homes currently in foreclosure, as opposed to just 62 in July 2005.

“Although St. Lucie had a big increase percentage-wise, it’s actually a very small number compared with last year,” Sharga said.

St. Lucie’s rate of foreclosure — 1 per every 992 households — is better than Florida’s rate of 1 for every 679 households, so some analysts point to this as good news about all three counties. RealtyTrac maintains a U.S. database that includes all three stages of foreclosure:

• Pre-foreclosure: notice of default and lis pendens.
• Foreclosure: notice of trustee sale and notice of foreclosure sale.
• Real-estate-owned transactions: properties that have been foreclosed on and repurchased by a lender.

Different companies measure different segments of that information or use different time periods to evaluate foreclosure filings. For instance, last week RealeSTAT.com reported that Palm Beach County foreclosures rose by 34 percent in June compared with last year.

RealtyTrac numbers show Florida foreclosure rates fell 14 percent statewide compared with July 2005, to 10,757 actions from 12,471.

Florida was among six states that account for more than 50 percent of all U.S. defaults in July, RealtyTrac said. The others were Texas, California, Ohio, Michigan and Illinois. After Texas, Florida had the most homes among these states in some stage of foreclosure — 10,757 — as well as the highest foreclosure rate.

“While foreclosure activity continues to remain slightly below historical averages, the number of properties in some stage of foreclosure from January through July has increased by 39 percent compared to the same period in 2005,” said RealtyTrac CEO James Saccacio.

Foreclosure rates aren’t expected to stay below normal much longer, analysts and RealtyTrac executives say.

“The growth in the investor share of the housing market in Florida over the last two years was about as fast as any other state,” said Thomas Lawler, a former Fannie Mae analyst. “With sales down sharply and overall inventory of unsold homes ballooning, it’s much harder for a financially strapped person (or a cash-flow-strapped flipper) to sell his or her home.”

Experts point to the $500 billion in adjustable-rate mortgages that are scheduled to reset at higher rates this year, at payments 20-50 percent higher than owners are paying now.

Analysts say that despite a recent decline in Florida mortgage rates, which have fallen now for four consecutive weeks, there could be a greater market slowdown an increase in foreclosure down the line. Stay tuned.