(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.”

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