After dragging and dropping the recent foreclosure data from Miami-Dade County into charts, we have some visual aids that will surely evoke some “ooohs” and “aaahhhhs” from the crowd.  First-up, let’s check out the overall trend in new foreclosure filings in Miami.

Call me crazy, but this data doesn’t look like it goes hand in hand with all of the recent “housing recovery” discussion.  There were 4,849 new foreclosure filings in Miami-Dade County in May.  Holy cow, that’s nearly 5,000 new filings in a single month!  Even more disturbing is that the average number of monthly filings has more than doubled in 2013 to 3,791, up from a monthly average of 1,807 in 2012.  There have already been 18,955 new residential foreclosure filings in 2013 so far, when there was a total of 21,686 filed throughout all of 2012.  At this pace, residential foreclosures in Miami-Dade County will easily double in monthly filings for the year.  Next, let’s look at the breakdown of single-family filings and condo/townhouse filings.

Now that shows a steady upswing in new filings throughout 2013.  When we talked about the moratorium on foreclosures that lasted over two years (2010-2012), people thought we were crazy.  It was just a matter of time before lenders started getting aggressive on their delinquent loan portfolios and filing new foreclosure actions.

So where are all of the delinquent borrowers?  Here is a city-by-city snapshot of Miami-Dade County.  This chart totals over 55,000, but the actual total is much greater than that.  Our search is maxed-out at 5,000 units and the City of Miami had over 5,000 single family and over 5,000 condo/townhouses in foreclosure on it’s own.

Here are a few of the areas of interest  and the existing foreclosure data:

• Hialeah – over 5,000 houses and over 5,000 condo/townhouses in foreclosure
• Homestead – over 5,000 houses and 2,763 condo/townhouses in foreclosure
• Miami Gardens – over 5,000 houses and 1,098 condo/townhouses in foreclosure
• Miami Beach – 1,715 houses and 3,316 condo/townhouses in foreclosure
• Doral – 600 houses and 1,986 condo/townhouses in foreclosure
• Downtown/Brickell (33131,33132 & 33137 only) 132 houses and 2,067 condos in foreclosure

We always say that one month of data doesn’t make a trend, but we certainly are pointing out a disturbing pattern in Miami.  To put everything into perspective, let’s compare Miami-Dade to Broward and Palm Beach County:

As always, we will continue to monitor the foreclosure data to illustrate various patterns and trends in the South Florida real estate market, but one final headwind to the “housing recovery” comes in the form of increased borrowing rates.  It is always important to monitor the correlation of the 10-year bond to the 30-year mortgage rate.  As distressed properties start to hit the market again and borrowing rates increase, they will serve as a 1-2 punch to housing prices in South Florida.  Enjoy the fireworks and here is a quick summary:

1. Residential foreclosure filings in South Florida will remain elevated for the remainder of 2013 and into 2014.
2. The shadow inventory of foreclosures will continue to grow, as the average foreclosure takes nearly 900 days to complete in Florida and banks are just now restarting the process after the robo-signing litigation & settlement.
3. Distressed property sales (REO and short sales) will put a cap on price increases and will gradually decrease South Florida residential real estate prices.
4. Rising interest rates (as noted in chart below), will restrict the pool of qualified buyers and suppress prices.