Posted by Brian at 8:51 PM
Here it comes
The vast foreclosure wave, that is.
The number of foreclosures is ballooning as strapped homeowners can no longer make their mortgage payments or quickly unload properties in a cooling housing market.
Among those most at risk: owners who used creative financing to stretch their budgets in the 2000-2005 housing boom. Buyers who took out a five-year adjustable-rate mortgage in 2000 are seeing their house payments rise for the first time.
The new payments usually are much higher, and homeowners looking for a way out typically can no longer sell in a few days or weeks, as they could during the height of the market. Today, a large inventory, high prices and rising interest and insurance rates make selling difficult. Those who can't hang on often have their homes taken over by their lender.
"I'm seeing foreclosures in many areas where they just weren't prevalent before,'' said Rhonda Light, who operates Foreclosure Reporting Service, a Hollywood firm that annually tracks thousands of foreclosures in Broward and Palm Beach counties. "The foreclosures we're seeing now are all over the board and in all different price ranges.''
Nationally, foreclosures were up 72 percent in the first quarter of this year compared with the same period last year, according to RealtyTrac, a California firm that monitors the market.
The pace of foreclosures in South Florida seems to be accelerating. Almost a third of Florida's 29,636 foreclosures were in South Florida in the first quarter of 2006.
In Broward, foreclosures were up in the first quarter over the end of last year by 57 percent. In Palm Beach, they jumped 69 percent, and in Miami-Dade, they were up 17 percent.
Overall, South Florida had about 3,000 more foreclosures than at the end of 2005 -- a jump of 40 percent.
I wrote briefly about this last month, but the example in that post was from New York. This article deals with the local market, and man is it a mess. For months now, the Sun-Sentinel has been warning that the boom was over, only to have realtors complain that they were being nay-sayers. Well, the foreclosures don't lie, and neither do the houses, condos and townhomes sitting on the market longer and longer every month.
We still don't expect to be able to afford a house any time soon--for us to get into the market, it would have to collapse completely, we'd have to get significant raises, and we'd have to find a motivated seller. But the first part of that equation, which seemed so impossible two years ago, is looking more and more likely every month.