(To read more on the multifamily market, click here.)

MIAMI-The pace of residential foreclosures in all three Southeast Florida counties is accelerating monthly by double digits, according to Default Research, a company based in Mt. Pleasant, PA that tracks lender filings of lis pendens at county courthouses. In comparing the number in February with the previous month, the number of filings climbed by more than 25% in Broward, 15% in Miami-Dade and 17% in Palm Beach counties.

“The real estate market is cooling down and now foreclosures are heating up,” Serdar Bankaci, president and CEO of the research firm, tells GlobeSt.com. As housing prices rose, he says, “many people paid more than they could afford.”

Not surprisingly, when Bankaci singles out condo foreclosures, Miami-Dade County leads with a 19% increase in February versus January. Condo foreclosures in Broward were up 14% for the month, while in Palm Beach County they rose 8.5%. Although Default Research doesn’t distinguish between newly constructed condos and rental units that were converted to condominiums, Bankaci says, “condo conversion is certainly a factor.” Given the squeeze on rental properties due to condo conversion, many renters had little alternative but to buy, “often at prices beyond their means.

“Home prices in the area began approaching a maximum during first-quarter 2005,” he says. “There’s generally a few months’ lag before you see foreclosures rise, and now we’re seeing a steady upturn.” He attributes the reason for the increases to a combination of accelerated home values over the past few years, “which allowed owners to refinance, often more than once, against their homes’ rising value,” and a more recent increase in interest rates. “Now, the homes are appreciating at a slower rate as mortgage payments increase,” he explains. In short, “people got caught.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.