Thursday, March 5, 2009

Flordia now leads!

Yes! Florida has the dubious distinction of having the highest foreclosure rates in the country.

In an article from the South Florida Business Journal, the following stats were displayed:

"The survey found that 20.1 percent of mortgages on Florida homes were delinquent or held in foreclosure. Nationwide, more than 11 percent of American homeowners are either delinquent or in foreclosure.
The survey covered 85 percent of the country’s 1-4 family residential mortgages.
In the fourth quarter, 11.1 percent of Florida residential mortgages were past due by at least 30 days – with 4.4 percent past due more than 90 days.
Nationwide, the number of borrowers at least one month behind in their payments – but not in foreclosure – rose to nearly 8 percent during the fourth quarter. That is the highest rate of delinquency ever recorded by the survey, which began in 1972. It reflects a record 13 percent jump compared to the third quarter.
Nearly 9 percent of Florida residential mortgages were held as foreclosure inventory at the end of 2008 – the highest rate in the nation. An additional 2.4 percent of Florida residential mortgages started foreclosure during the fourth quarter.

What does this mean?

Well...think how long the inventories of "dead properties" (properties that are not producing revenue or value for consumers) will stay out of the marketplace. The average foreclosure, sale and sale to the public is well over two years...and that is if the bank can find the notes.

This property value issue is going to drag along as properties will continue to flood the market, exceeding demand (and credit availability) for years to come.

Anyone who is remotely connected to housing and construction is effectively out of work.

The ripple effect will intensify.

Bankrutpcy would allow for a quick adjustment of the valuation of the real estate...just like a stock market correction...but the banks oppose any mention of allowing the bankrutpcy courts to write down equity values...prolonging the death throws.


Anonymous said...

Oh my goodness! More than 20% of homes are not making their payments. This doesn't even count the disaster that is the building load fiasco about to happen. The skylines continue to go up with more than 5 years of inventory already online. What are the chances that these properties won't just make the entire problem worse.

Keep telling us what's up Scott -- the truth is that the existing subprime mess is simply the proverbial "tip of the iceberg"!

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