After taking a few months off over the summer, the pace of new foreclosure filings is picking up in South Florida.  In Broward County alone, there were 2,387 new foreclosure actions filed in September.  That is double the August number.  Let’s look at a few charts:

During the month of September, 1,794 houses and 593 condo/townhouse properties received foreclosure notices in Broward County, Florida.  That is twice as many new filings as the month of August and we saw this coming during the summer slowdown as we figured that the banks and courts would come back to work rested and ready to repo.  Next, we will look at the total number of filings, combining both the single-family homes and condo/townhouse properties.

During 2012, the monthly average of new foreclosure filings was 1,332 and so far in 2013 the monthly average is 1,995 per month.  Does that upswing in September look like a leading indicator of a housing recovery?  How about a 50% increase over last year in the average monthly foreclosure filings data?  Simply put,the answer is no.  The worst part of all this is that it looks like this will be yet another month of net additions to the shadow inventory.  Just to put the shadow inventory into perspective, take a look at the drastic difference in properties listed for sale and properties in foreclosure throughout Broward County. The next chart below sheds some light on the inventory shortage in the area. This week a research report on “Vampire Foreclosures” was released by Realtytrac stating that on a national level, 47% of bank-owned properties are still occupied by the previous owner that was foreclosed on.  They are basically squatting in the property, living mortgage-free.  The report also showed that 64% of bank-owned properties are still occupied by the previous owner (turned squatter) in Miami-Dade, Broward and Palm Beach County.  Leave it to South Florida to set a record for the most people squatting in foreclosed properties and living mortgage-free!  These “Vampire Foreclosures” should not be confused with the “Zombie Foreclosures” that make up another 20% of foreclosure properties where the previous owner has abandoned the property and it sits vacant on your street for years, usually without maintenance.  And don’t worry, there are plenty of squatters living in the zombie foreclosures also.  A good percentage of these properties entered the foreclosure process as far back as 2008 when the owner in default received the initial lis pendens.  We are in the 4th quarter of 2013, so I don’t think it is an outlandish request to get these foreclosures completed, squatters evicted and properties listed on the market for sale.

The houses (over 50,000) and condo/townhouses (over 16,00) in foreclosure figures are August figures and we are now sure that they will increase in September.  If you haven’t seen the chart of where all the foreclosures are located in Broward County, Florida, take a look at this next chart:

The fact of the matter is that this problem has been swept under the rug and the “housing recovery” being touted lately is a total fabrication.  Broward County currently has nearly 70,000 residential properties in foreclosure when you combine the houses and condo/townhouse properties and the shadow inventory has been growing every month.  To compare Broward County to Miami-Dade and Palm Beach County, Florida, take a look at this next chart of the South Florida shadow inventory:

Finally, to show that the problem is growing month over month, we compare our foreclosure data search in August (roughly 136,740) existing foreclosures in South Florida to September (roughly 155,735) existing foreclosures in South Florida and that represents a 14% increase in the shadow inventory.

Yes, we anticipate another increase when we run the October foreclosure data search in a few weeks.  The pace of distressed sales has been very slow and it will take years to sell all of these properties.  Until the pace of distressed sales shows a steady increase and starts to deplete the shadow inventory, this bubble will continue to grow and eventually POP……AGAIN!