The Sunshine State is falling out of step with the housing recovery taking place in several regional markets across the country. Although real estate sales and speculative actions are brisk in metro areas such as Miami and Tampa, a sudden spike in foreclosure evictions and repossessions are threatening the housing recovery.
According to recent data released by foreclosure analytics firm RealtyTrac, Florida beat all other states in terms of home repossessions in 2012, and one out of every 32 residential properties in the Sunshine State were undergoing foreclosure proceedings last year. Nearly 84,500 repossessions took place in 2012.
Paying the Piper
Florida is the most likely state to see a glut of foreclosures suddenly come into the market and disrupt the home price recovery. Foreclosure is a judicial proceeding in Florida, and the court dockets move at a glacial pace. Even though Florida is home to a few foreclosure mills, it takes a lot to speed up foreclosures in the Sunshine State. Foreclosure defense is widely practiced in Florida, which explains why some cases have been languishing since 2007.
The backlog of foreclosures is finally catching up to the Florida real estate market. In 2012, more than 16,000 foreclosures were finalized, and the pace is expected to pick up in 2013. Florida seems to be paying the piper now due to its protracted foreclosure proceedings that average more than 850 days, but things are not as bad as they are in New York and New Jersey. Foreclosures take even longer to move forward in those two states.
A Lot of Homes
Once the foreclosure pipelines and court dockets clear up, Florida may experience another housing bonanza. Home builders are getting busy in Southwest Florida, and real estate investment firms are snapping up foreclosures in Miami, Orlando and Tampa. Miami is the best performing metropolitan area in terms of housing, with prices in the Magic City rising by 9,5 percent in 2012, followed by Tampa with 8.2 percent.
Inventories are looking good in Florida, at least for home shoppers and investors. More than 83,000 homes are distributed among the Real Estate Owned (REO) portfolios of banks across the state, an increase of 6.8 percent over the last 12 months. With more than 305,750 homes with upside-down mortgages or in danger of foreclosure, Florida could see its shadow inventory considerably grow in 2013.