The major banks really picked-up the pace of foreclosure filings to end 2013. There were 3,362 new Broward County residential foreclosure filings in December and that was a level we haven’t seen in years.
Here are a few details worth mentioning:
- 2,602 single-family homes in Broward received a foreclosure notice in December
- 760 condo/townhouse properties received a foreclosure notice in December
- 26,183 new foreclosure filings in 2013, with a monthly average of 2,182
- There were 15,983 new foreclosure filings in 2012, averaging 1,332 per month
- There was a 64% year over year increase in the monthly average from 2012 to 2013
What is more disturbing is the massive shadow inventory of foreclosures that continues to grow.
The chart above displays where roughly 70,000 foreclosures are located throughout Broward County, Florida. Feel free to click on the chart to see where your city stands, but here are some of the chart leaders as of 1/22/14:
- Fort Lauderdale has over 5,000 houses and 1,197 condo/townhouses in foreclosure
- Miramar has over 5,000 houses and 964 condo/townhouses in foreclosure
- Pembroke Pines has over 5,000 houses and 933 condo/townhouses in foreclosure
- Coral Springs has 3,194 houses and 1,279 condo/townhouses in foreclosure
- Hollywood has 4,527 houses and 1,191 condo/townhouses in foreclosure
Most people think that foreclosures are no longer a problem in South Florida and that couldn’t be further from the truth. The pace of new foreclosures increased in 2013 and doesn’t appear to be slowing as we begin 2014. The next major issue is that the shadow inventory of foreclosures hasn’t made it’s way through the court system to be sold on the market. Since Florida is a judicial state, the average foreclosure takes 933 days to process and everyone has heard stories of their neighbors living mortgage-free since 2008.
Take a look at this chart comparing single-family new foreclosure filings to the distressed sales (short sale or REO).
Even without glasses you should be able to spot the divergence in trends. In December alone, there were 2,602 new foreclosure filings and only 382 distressed sales. This means that new filings outweighed distressed sales by over 6-1, closer to 7-1!
Now for the condo/townhouse market.
Although the trend is still in the wrong direction, the spread isn’t as bad. In December, there were 760 new foreclosure filings in the condo/townhouse market and 340 distressed sales. That is just over twice as many new filings as distressed sales.
The only reason distressed sales increased at the end of 2013 is because the Mortgage Debt Forgiveness Act finally expired on December 31, 2013. That legislation allowed underwater borrowers to short sell their property if it was their primary residence without being taxed on the amount forgiven. The law was originally passed in 2007 and was extended twice, but has finally expired. Basically, anyone who was allowed to short sale their property under this law has completed it by now.
In the next few weeks, we will update the distressed market in Miami-Dade and Palm Beach County, with a look back at the past few years and where the market is heading in 2014.