PBC Foreclosure Rates Remain High

The number of homes in some stage of foreclosure in Palm Beach County and the Treasure Coast soared last month compared with a year ago, according to research firm RealtyTrac.

The new report gives fresh evidence that local homeowners are struggling with budget-busting energy prices, adjustable-rate mortgages resetting at higher rates and sluggish home sales.

In Palm Beach County, 873 homes entered some stage of foreclosure in September, or one in every 637 households. That’s a 46 percent increase from the 596 reported in September 2005.

“While lender activity is up, it’s not all lender-related,” said Jim Sahnger, V.P. of Palm Beach Financial Network in Sewall’s Point. “A lot of the foreclosure activity in our area is related to HOAs (homeowners associations) and contractors not getting paid.”

Since June, the Palm Beach County foreclosure rate has moved up and down: July foreclosures fell from June, August soared over July, and now September has dropped significantly from August’s 2,241 homes in some stage of foreclosure.

“I think the simple answer is to look at the underlying trend and not a particular month,” said Mark Wiser, principal of Wiser Marketing Group, a Miami real estate consulting firm. “What I am seeing is an increase in selling motivation in Broward and Palm Beach counties People are not sitting and hoping for a sale. They are dropping the asking price, doing open houses midweek, whatever it takes to get out before foreclosure.”

In Martin County, 55 homes entered some stage of foreclosure in September, or one in every 1,190 households, RealtyTrac said.

With Florida mortgage problems mounting for owners with adjustable-rate loans, Martin’s September foreclosures were up 189 percent from the same month a year ago, when 19 homes entered foreclosure.

However, the relatively small, affluent county’s numbers are so small that the percentages are misleading. In fast-growing St. Lucie County, 190 homes entered some stage of foreclosure last month, or one out of every 480 homes. That compares with one in 1,030 across the U.S.

Further, the September numbers for St. Lucie were up strongly from the same month a year ago, when 106 homes were in some stage of foreclosure. That’s a 79 percent hike, illustrating succinctly how many people are experiencing some problem making the Florida mortgage loan payment on time.

Throughout Florida as a whole, 12,946 properties entered some stage of foreclosure last month, the second-highest number of new filings in the nation and up 41 percent from September 2005. California was No. 1 in new filings, with 14,806.

RealtyTrac collects data that includes all three stages: pre-foreclosure, or notice of default and pending suit; foreclosure, notice of trustee sale and notice of foreclosure sale; and real estate-owned transactions, or properties that have been foreclosed on and repurchased by a lender.

The Florida foreclosure rate of one filing for every 564 households was the fourth-highest in the nation, RealtyTrac said.

That’s better than August, when Florida ranked No. 3. Michigan soared ahead of Florida last month to take that dubious honor. Colorado ranked No. 1 and Nevada was No. 2. In terms of total volume of homes in some stage of foreclosure, the Sunshine State tops the list.

Recent government reports indicate that Florida and Palm Beach County have high percentages of option adjustable-rate mortgages. These exotic loans, as they are known, allowed local buyers to afford homes in the South Florida housing market, universally considered one of the hottest real estate markets in the whole country.

• But that’s come at a high price. Local home values nearly tripled in five years, pricing even professionals such as teachers and nurses out of the market.
• The price gains are astounding. The median price of an existing home in the Treasure Coast soared from just $93,100 in 2000 to $254,000 in 2005.
• In Palm Beach County, median prices rose from $138,600 in 2000 to $390,100 five years later, the Florida Association of Realtors say.

Given these astronomical price gains, many new buyers considered option adjustable-rate mortgages their only route to homeownership.

However, those Florida home loans are beginning to reset, and the monthly payments are suddenly out of reach for many, making foreclosure a real and unwelcome choice in a market where homes aren’t selling. At the same time, home values are stagnant or even dropping.