November foreclosure statistics return Florida to the country’s number one position, although year-on-year activity has dropped markedly. Mortgage default figures also point to a decrease in a market where obtaining a mortgage for property in Florida remains a challenge.
After a brief drop to second position in national rankings, Florida foreclosure activity returned to the top in November. The figures released by RealtyTrac in their US Foreclosure Market Report show that one in every 462 properties in Florida was subject to a foreclosure filing last month.
However, the report also highlighted that Florida’s high rate of foreclosures is gradually declining. Monthly foreclosure activity in the Sunshine State in November was down by 4 per cent with year-on-year figures showing an impressive drop of 15 per cent indicating that Florida’s foreclosure problems are lessening.
In terms of metropolitan areas, Atlantic City in New Jersey occupies the number one position, previously occupied by Miami, now in second place. One in every 394 properties in Miami is a foreclosure filing, although like the state as a whole, this figure represents a significant year-on-year decrease, 22 per cent in this case. In third position is Jacksonville where foreclosure rates run at one in 395. Only slightly lower are Orlando properties (one in 403) and Tampa (one in 432).
Nationally, the level of foreclosures dropped by just 1 per cent in a year to reach one in every 1,170 US properties. However, November saw a 6 per cent year-on-year increase in the number of homes entering the process after 27 consecutive months of decreases.
In terms of mortgage default, Florida is also improving. Figures issued by TransUnion show a drop in mortgage default. Florida’s default rate is forecast to be 5.4 per cent by the end of this year (the predicted national average is 3.12 per cent). There are now one million fewer mortgages in Florida than before the recession and it’s the state with the highest mortgage decline having lost 25 per cent of the total mortgages.
TransUnion point to two main reasons behind this: firstly, the high number of foreclosures in Florida and secondly, the increase in the number of cash payments for homes. An increasing number of properties in Florida are cash purchase, eliminating the need for a home loan.
Steve Chaozuki, the head of financial services at TransUnion, also believes that stringent lending conditions are a key factor in mortgage decline. “Regulatory requirements and scrutiny, recent home appreciation and consumers’ prioritization of payments have all changed the landscape of consumer mortgage lending,” he said, adding that despite the mortgage crisis occurring several years ago, “mortgage lending remains relatively tight”.
Sources: Florida Realtors