South Florida foreclosures fall 58 percent, but signs suggest free-fall could end soon

Miami /
Aug.August 11, 2011 02:02 PM

The number of foreclosures in South Florida fell again in July, but there are signs that banks are beginning to move homes more quickly through the process, according to a report from RealtyTrac.

Foreclosures in the tri-county area dropped 58 percent compared to July 2010, a continuing trend due largely to the foreclosure freeze that began last autumn.

“I think we’re continuing to see in this last couple of months, but definitely in July, that some of the logjam is starting to break up in South Florida,” said Daren Blomquist, a spokesperson for RealtyTrac.

While the numbers are still down from a year ago, he said foreclosure are beginning to come off of what was an artificial low due to the document crisis.

There were a total of 7,302 South Florida properties with foreclosure filings in July. Miami-Dade County led the way with 2,814 such properties.

Blomquist said month-over-month data signals that an end to the freefalling number of foreclosures could be in sight. Miami-Dade saw an 84 percent increase in REO activity, or real estate owned by the bank, compared to June, and Broward County saw a 34 percent increase.

“That indicates that lenders are starting to kind of flush through these delayed foreclosures and complete the foreclosures on them with that REO status, which means they’re actually taking back the properties,” he said. “I think it’s actually a good sign that some of this uncertainty and delays in the market are being cleared up, which is really where we need to be with this.”

While much of the slowdown in foreclosure activity has come from the so-called robo-signing scandal that began at the end of 2010, banks could also have an incentive to slow down the process, Blomquist said.

“I think there is incentive,” he said. “[Banks] are, in a sense, competing with themselves. If they flood the market with too much inventory, they won’t be able to sell the inventory that may cause another dip in home prices, and they won’t be able to sell their inventory as quickly as they might have otherwise.”

In 2008, he said, there was also a change in the mark-to-market accounting rules that meant banks didn’t need to write-down the loss of real estate on their books until they actually sold it.

“That could create an incentive, as well, for them to not just dump their properties all at once, because that would put a hit to their books,” he said.


Related Articles

arrow_forward_ios
Lexington Realty Trust's Wilson Eglin and 5600 Broken Sound Boulevard, Boca Raton (Google Maps)

HSBC to take over Boca Raton office building following foreclosure auction

HSBC to take over Boca Raton office building following foreclosure auction
Victor Ballestas and 6060 Indian Creek Drive, Miami Beach (Credit: Google Maps)

Embattled Sixty Sixty condo-hotel’s units in Miami Beach sell for $15M

Embattled Sixty Sixty condo-hotel’s units in Miami Beach sell for $15M
Lord Balfour Hotel

Mezz lender forecloses on Ocean Drive hotel in South Beach

Mezz lender forecloses on Ocean Drive hotel in South Beach
Josh Zegen of Madison Realty Capital and 777 North Ocean Drive, Hollywood (Google Maps)

Madison Realty closes on Costa Hollywood Beach condos for $43M

Madison Realty closes on Costa Hollywood Beach condos for $43M
3601 North Miami Avenue with Francisco Arocha

Midtown Miami development site in foreclosure hits the market

Midtown Miami development site in foreclosure hits the market
Florida Gov. Ron DeSantis (Credit: Joe Raedle/Getty Images)

Florida allows eviction moratorium to expire

Florida allows eviction moratorium to expire
Kelly Beam, Ricky Trinidad , and 3265 Bird Avenue (Credit: Google Maps)

Miami developer Metronomic files for bankruptcy

Miami developer Metronomic files for bankruptcy
Susan Gale and Variety Miami Beach

Miami Beach hotel facing foreclosure hits market for $37M

Miami Beach hotel facing foreclosure hits market for $37M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...