Florida Foreclosure Problems a Sign of Lasting Market Imbalance

Robert Trigaux, Business Editor of the St. Petersburg Times, writes that we are a nation of 50 states, but that eroding real estate markets mean some states bear more of the brunt than others.

Figures out last week show that in February Florida happened to be home to about one in every seven of the country’s 130,786 homes in foreclosure.

In sheer volume,  the 19,144 Florida foreclosures - more than any other state, and hinting of a higher 2007 rate than the 124,721 total foreclosures in 2006.

Blame Florida’s popularity with real estate speculators for part of the foreclosure pace. Add to that the growth of bad credit Florida mortgage lending - “subprime” loans made to people with weak credit who can’t make their payments.

Not to mention this year’s rate bump in adjustable rate Florida mortgage payments, and the state’s slowing job creation, which also may be a factor.

Look at it another way:

• One of every 382 households in Florida last month faced some aspect of foreclosure, ranging from default notices for late payments to real estate auctions and repossessions.
• Florida ranked third in foreclosure rate behind the less populated states of Nevada and Colorado.
• That compares with foreclosure rates of one in 751 households in California, one in 650 in Texas, one in 455 households in job-shedding Michigan, and one in 424 next door in Georgia.
• Overall, one of every 884 U.S. households struggled with foreclosure last month. That’s less than half Florida’s rate.
• While national foreclosure filings declined 4 percent in February from January, Florida’s increased 63.5 percent.
• Nationally, foreclosures were up 12 percent from February 2006.
• In Florida they were up nearly double in the past year.

This is not meant to be just another numbers dump about the Florida housing market slump. Consider it a reminder that the state’s vast run-up in home prices and the enormous backlog of housing for sale will now need time - we’re talking years - to rebalance.

Whether the Sunshine State’s foreclosure pace will continue to worsen - or if the widespread problems with Florida mortgage loans will subside - is hard to say.

Follow the link to continue reading in the St. Petersburg Times …