Foreclosure Data Tells the Sad State of the South Florida Housing Market

The South Florida Sun-Sentinel reports another company has released down-in-the-dumps Florida foreclosure figures, just in time for the holidays.

Florida leads the Southeast in filings and is second only to California in total foreclosures nationwide, according to Foreclosures.com.

More than 107,500 Florida property owners have filed for foreclosure so far in 2006. That’s already an increase of 13 percent from the 95,269 who filed for all of last year. The company cited defaults in both Broward County and Miami-Dade County as contributing to the rise.

Nationwide, nearly 877,000 homeowners were in foreclosure so far this year, up 37 percent from the 640,454 who filed last year. Escalating home values from 2000-2005 caused buyers to overextend themselves. Many took out short-term, adjustable-rate mortgages for homes they otherwise couldn’t afford and saw monthly payments balloon as mortgage rates rose.

While there’s no denying that more homeowners in the South Florida housing market will likely struggle with foreclosure in the coming months, it’s difficult to put the problem in perspective because real estate analysts differ in how they report foreclosure data.

Another firm, Boca Raton-based Foreclosure.com, counts only properties that are in foreclosure, meaning Florida mortgage lenders are in the process of trying to take back the homes. The Mortgage Bankers Association also separates home loan delinquencies from actual foreclosures.

In a quarterly snapshot of the market released last week, the Mortgage Bankers Association reported that the percentage of home loan payments that were 30 or more days past due for all Florida mortgage loans tracked jumped to 4.67 percent in the July-to-September third quarter.

That marked a sharp rise from the second quarter delinquency rate of 4.39 percent and was the worst showing since the fourth quarter of 2005. But Florida’s foreclosure rate was below the national average.

Generally, lenders consider homeowners in foreclosure when they are 120 days late making payments.

“Unfortunately, there is no uniform standard for when somebody is in foreclosure. The industry needs to come up with some kind of a standard so everyone can know what these numbers mean because right now they’re misleading,” said Louis Spagnuolo, a senior mortgage banker for Home 123 in Boca Raton.

The Florida condo market might be shaky, but H&H Development is going ahead with a 10-story project in West Palm Beach near CityPlace.

The Coral Gables-based real estate developer is building 288 condos priced from $300,000-600,000. H&H says it has about 80 percent of the units under contract. Construction has started and the condos are due to be complete in late 2007.

The development, called City Palms, is on the site of the old Hibiscus Inn on Hibiscus Street. H&H bought the land and other holdings from Richard Limehouse last year for about $7 million. It was one of a handful of deals in Palm Beach County in which longtime property owners sold to deep-pocketed condo developers.

A slow market has caused developers to shelve projects in Palm Beach and Broward counties, but Harvey Hernandez, CEO of H&H, said he’s not worried. He said he’s pleased with the sales pace so far and expects to sell any remaining condos next year.